TOWN and parish councils are set to receive a cash windfall to help cover a major funding gap in their budgets for 2013-14.
Changes made by the government to the way council tax benefit is paid had left Northumberland County Council plus their town and parish colleagues facing a major headache as they try to set their budgets.
The national move will mean residents in receipt of council tax benefits will not be required to pay their council tax, resulting in less income for town councils.
However, the county council has received a £600,000 grant from the government to cover the lost income in the 2013-14 budgets.
And at their meeting on Monday, the county’s executive members agreed to share out the grant – although an estimated 46 town and parish councils will still miss out.
Officers at the county council have been working on a solution to the problem, highlighting which town and parish councils will have the biggest shortfall in tax income due to their high number of residents receiving council tax benefits.
Steven Mason, corporate director of finance at the county, told the meeting: “This is a key issue for town and parish councils in the sense their precepts remain the same but the tax base went down.
“People who are paying it would see it as an increase in their tax bill.
“The government position is rather than guarantee protection, the billing authority can grant money to town and parish councils so they could adjust their precept so council taxpayers look to be in the same position.
“Many town and parish councils have approached the council, it is an urgent issue and we need to get the precept information back to them by the end of the month.
“We have no option other than pay the grant for 2013-14 but for one year only.”
From the £600,000, the county council has earmarked £78,039 for Ashington Town Council; £125,481 for Blyth Town Council; and £43,024 for Cramlington Town Council.
All local authorities are currently in the process of setting their budgets for the coming financial year, with each one facing either massive rises in precepts or a cut in services to cover the shortfall.
Ashington Town Council was facing one of the worst pressures, with an anticipated 21 per cent reduction in its council tax base due to the loss of income from council tax benefits.
Mike Slaughter, clerk to the town council, said they were facing a 25 per cent – of £11.81 a year – increase in precept for a resident in a Band D home.
Members of Cramlington Town Council raised concerns of the proposed funding loss at their full council meeting last Thursday.
Cramlington councillors are keen to maintain their precepts at their current levels, but were facing a 14.9 per cent increase without the funding boost from the county council.
They had been angry at the proposals, which would have led to a cut in vital services if they had been unable to fund them.
Council clerk Bob Baker said: “What this means for Cramlington residents is that the Band D equivalent tax base will reduce from 8,895 to 7,741 properties.
“We are very much dependent on the county council following the wish of the Department for Communities and Local Government passing the money to town and parish councils.”
Coun Ian Ayres added that had the money not been forward on, then it would have created a political storm.
Blyth Town Council is expected to be finalising the details of the 2013-14 precept requirements at its council meeting scheduled for Thursday, January 17.
The grants are:-
• Ashington Town Council – £78,039;
• Blyth Town Council – £125,451;
• Choppington Parish Council – £22,793;
• Cramlington Town Council – £43,024;
• East Bedlington Parish Council – £17,806;
• Ellington & Linton Parish Council – £2,541;
• Lynemouth Parish Council – £6,357;
• Morpeth Town Council – £41,387;
• Newbiggin by the Sea Town Council – £28,742;
• Seaton Valley Community Council – £43,737;
• West Bedlington Town Council – £14,812.