Below-inflation tax rises likely for Arun residents

Senior councillors decided this week to agree in principle to raise their share of the overall bill by three per cent annually until 2014.

This is good news for residents whose budgets are being squeezed by rising fuel and food costs, mortgages and an official inflation rate of 4.6 per cent.

The decision by Arun's cabinet members also comes at a time when the council's finances are being affected by the credit crunch. The council has not sold a single council house in the past six months.

This compares with eight sales a year earlier.

Arun received 300,824 from the sales in 2007 after 477,176 was paid to the government under the financial rules in operation for that year after the discounts received by the tenants.

The lack of income from the sales is expected to continue as tenants shun the right to buy because of the general financial situation.

Added to this is the fact some of the council's costs are rising faster than inflation to put an added burden on its finances. Government grants are not expected to make up the shortfall.

Councillors were given three options to bolster their income from residents in the years until 2014/15.

One was to keep their pledge for annual council tax rises of three per cent and find savings of about 2.6m within six years, another was to increase the charge by five per cent for the next two years followed by three per cent and the third linked rises to increases in the consumer price index inflation monitor.

Cllr Gill Brown, the council's leader, said the three per cent increases had to be the preferred choice.

"It's difficult for people to find council tax increases," she stated. But she warned: "It's certainly going to be a difficult period whatever we decide. Nobody can predict how long this credit crunch will go on."

She stated that linking council tax rises to the CPI would build inflation into peoples' thinking and lead to wage demands similar to those of the 1970s and 80s.

Deputy leader Cllr Roger Elkins agreed. He said: "Arun has a good record of financial management and making savings. We have always gone to the electorate and kept our word on percentage increases."