Plymouth council tax will rise by 4.99%

Cuts to services thwarted but concern over debt level continues

Plymouth City Council will not be cutting any of its 300 services after an increase of government funding of nearly £60 million over the next three years.

But it will be several years before its debt – predicted to rise to over £900 million in 2028 – will start to reduce, council tax and the social care precept will increase to the maximum of 4.99 per cent from April and the public could see car parking charges increase.

The authority agreed a balanced budget at its meeting on Monday which will protect  services and includes an extra £25 million for adult and children’s social care, home to school transport for children with special educational needs and disabilities (SEND) and homelessness provision – the main pressures facing the council which make up three quarters of its total revenue budget of £326 million.

The government has agreed to pay off 90 per cent of the shortfall in SEND funding which equates to £47 million but costs of children’s placements have sky rocketed by £50 million in the last ten years, some of the most specialist independent placements costing the council £25,000 a week.

A fairer funding review carried out by the government  means that the core spending power of the city council – the amount of money it has to spend on services – has increased by 6.2 per cent for the next three years which equates to nearly £60 million.

But in order to maintain services, the budget includes a 2.99 per cent increase in council tax and a two per cent adult social care precept specifically to meet increase cost and demand for adult care. This means an increase of £1.24 a week for households in Band A properties and £1.85 a week for households in Band D.

And the council has identified an extra £10.5 million of savings with a review of parking fees and charges predicted to save £1.4 million.

Council leader Tudor Evans (Lab, Ham) said an ambitious £319.7 million capital programme, up to 76 per cent of which is expected to be funded through external grants over the next five years, would bring more investment and skills and create more highly paid jobs.

He hit out at critics on social media – who he calls naysayers – for their comments over the council’s level of borrowing.

He said being ambitious was the only way Plymouth would benefit from what lies ahead with such things as its £4.5 billion defence deal and city centre partnership with Homes England to build 10,000 new homes.

Up to 25,000 new jobs are expected to be created in the city over the next decade.

“Plymouth is at a tipping point, national announcements over the last 12 months have created a platform for the strongest period of economic growth in our city in 50 years,” he said.

“The council borrowing for investment is no different than a household mortgage. You borrow more than your annual income and fix the interest at the most affordable rate.

“We borrow when it improves lives, when it reduces long term service demands, when it brings jobs, skills, and environmental benefits.

“These figures are big because we are a big city and big cities are those that think big. Our borrowing allows us to unlock millions in grant funding.”

The council heard that in 12 months some £21 million had been brought in from the council’s property portfolio, the economic development team had secured grants of £225 million and the £395 million of investment had been come in from the private sector, as a result of collaborative working facilitated by the council.

But Cllr Lee Finn (Con, Budshead), who is vice chair of the council’s audit and governance committee  said if the council was not paying out £100 million in the next two years to service the debt this money could be spent on core services the people of Plymouth were “crying out for”. 

Cllr Chris Wood (Con, Eggbuckland) said the council held “truly enormous amounts of debt” and would be within £50 million of its authorised debt limit in 2028.

“We are flying so close to the wind that I think it is very problematic indeed” he said  and added that increasing council tax by two per cent above inflation and fees and charges was no way to “help the cost of living”.

Cllr Ricketts (Ind, Drake) said the council should not be paying the real living wage to employees when the national minimum wage had gone up by 33 per cent in the last few years and should be using its redundant assets to repurpose as children’s homes instead of buying new property.

Reports said that substantial and growing pressures in adult social care, children’s social care, homelessness services and SEND provision meant the council “faced another year of financial risk” but the budget ensured sufficient resources were in place to maintain essential citywide functions, including the repair of potholes and the delivery of the grass cutting programme, which was  increased by £300,000 last year.

Chief finance officer David Northey considered the proposed 2026/27 budget, to be “sound”, and the level of reserves – increased to £12 million from £8 million –  to be adequate for the next financial year, subject to “a clear understanding” of measures aimed at further reducing pressure on finances.

Cabinet member for finance Cllr Mark Lowry (Lab, Southway) said this was probably the hardest budget he had been involved in setting in 20 years but probably the best.

“There is more money for repairing potholes, play parks, bin collections and libraries,  public realm maintenance of Royal Parade and Armada Way and the city centre generally,” he said.

The highways and transportation budget is increasing from 12.8 million to 14.3 million next year and to 16.6 million in 2027/28.

Fewer potholes and cleaner, greener streets and transport were key priorities for the public in a consultation which has fed into the budget-setting process.

Cllr Lowry added that council’s first capital strategy detailing the debt made it “perfectly clear” that the council’s  debt was affordable.

“It is good debt, some of the debt is at 1.5 or two per cent over 50 years, if someone offered me that now I would bite their arm off, It is absolutely brilliant.”