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Combined Authority provokes ‘outrage’ by considering new tax on Cambridgeshire residents amid cost of living crisis

The Combined Authority could choose to impose a new tax on Cambridgeshire residents – but most people have “no idea” because it was buried in a “misleading” public consultation on the idea, councillors have said.

Its board is set to consider the idea on January 25 as it looks to make up a shortfall in its budget.

But with council tax bills already set to rise this year and households struggling to make ends meet amid the cost of living crisis, any effort to impose a new precept is sure to face huge opposition.

Cllr Anna Bailey, the Conservative leader of East Cambridgeshire District Council, described the idea of another layer of council tax as “an outrage” and “the last thing that is needed”.

A survey on the Combined Authority’s financial plan, which closed on January 13, generated only 230 responses.

Cllr Steve Count said most people had no idea about the proposals. Picture: Keith Heppell
Cllr Steve Count said most people had no idea about the proposals. Picture: Keith Heppell

Cllr Steve Count, a Tory county and district councillor, told an extraordinary meeting discussing it: “How many responses do you think you would have got if you actually put a press release out saying that the mayor wants to introduce a brand new tax on the people of Cambridgeshire and Peterborough?

“Because I believe you’d get more than 230 responses, but most people I’ve engaged with have no idea that this is what is actually on the table at the moment.”

The Cambridgeshire and Peterborough Combined Authority had a tumultuous 2022, with a whistleblowing inquiry, a code of conduct probe into Labour mayor Dr Nik Johnson and an external auditor declaring the governance of the authority to be no longer fit

for purpose.

The newly-appointed £203,000-a-year CEO Eileen Milner said she had no option but to quit because of the “negative impact” on her own health and wellbeing. Interim chief executive Gordon Mitchell – brought in on a contracted day rate of £1,350 plus VAT – began his tenure by admitting the state of its affairs was “very serious”.

Meanwhile, its major projects funding lay unspent and the authority had to give back £55million in grant funding to the government after failing to spend it in time on improving energy efficiency of homes in a scheme it was managing across 136 local authority areas in the South East of England, including nearly £2m for Cambridgeshire.

Funding routes abandoned by Stagecoach East is costing millions. Picture: Keith Heppell
Funding routes abandoned by Stagecoach East is costing millions. Picture: Keith Heppell

The Combined Authority’s four-year financial plan says its spending – on transport, housing and education among other areas – is forecast to be greater than its income.

A key issue is that after bus operator Stagecoach chose to cut numerous unprofitable bus routes last year, the Combined Authority would need to spend £7m in 2023-4 to keep their replacements running – double the planned budget for buses of £3.5m.

To remedy this, the authority could reduce services to fit this smaller budget, or expand the service but make up the deficit by making current spending more efficient, asking for money from Cambridgeshire’s councils, using savings or, controversially, introducing a mayoral precept.

This final option would mean a new element on council tax bills, which are already rising as councils, police and the fire service try to make up their own shortfalls in funding.

Cllr Bailey told the Cambridge Independent: “The frustration is that the actual bus service subsidy renewals are not going to happen until March. But the budget decision has got to happen at board in a few days time. And those two things are being separated, which is ludicrous. To reach your hand into taxpayers’ pockets and take money by force of law during a cost of living crisis, without having access to the proper information and making decently properly informed decisions about whether bus services are sustainable, is an outrage to me and I can’t support it.

Cllr Anna Bailey, the Conservative leader of East Cambridgeshire District Council. Picture: Keith Heppell
Cllr Anna Bailey, the Conservative leader of East Cambridgeshire District Council. Picture: Keith Heppell

“East Cambridgeshire District Council will be freezing its share of council tax for the 10th year in a row, but I’m certain the county council will be putting theirs up by the maximum and they’ve got the lion’s share of the bill. So that will already be a significant increase.

“We’re working every single day to support people with all the cost of living issues and this is the last thing that is needed.”

Last year, the ‘average’ Band D household in Cambridge paid £2,014.66 in council tax, and that will swell this year, with the county council already proposing a 4.99 per cent hike, which will add £73 to a Band D bill.

After Jon Alsop, the Combined Authority chief financial officer, presented the plan to a scrutiny committee of cross-party councillors last week, they argued the new precept idea was not made clear in the Combined Authority’s consultation documents, which can be found on its website along with links to the medium term financial plan.

There is a section on the precept under the frequently asked questions (FAQs) section.

Cambridge city councillor Richard Robertson (Labour) said that he thought it “very strange” that much of the detail, including “all the options for things like precepts”, is in the FAQs and that the whole consultation was “very difficult to deal with”.

Cllr Count, a Conservative county and Fenland district councillor, described it as a “tick box exercise” and “not as a genuine effort to engage the public”.

His comments came after a 10-minute break, called to allow councillors to read its finer details, which many said they could not initially find.

Council tax bills will rise significantly this year
Council tax bills will rise significantly this year

Mr Alsop said there had been “quite a substantial” effort to put the consultation out into the public domain via social media campaigning.

“This year we’ve had at the last count about 230 responses, which is far more than we’ve had in previous consultations. It’s not that people haven’t had the opportunity,” he said.

Cllr Count argued the consultation “could mislead people into responding positively to the mayor’s proposed precept” by suggesting it is the solution to avoiding bus cuts.

Mr Alsop stressed that the authority considers the precept just one possible option to balance the budget.

Other councillors also criticised the way consultation was carried out.

Peterborough City Council councillor Andy Coles (Conservative) said he was “a little bit bemused” while he tried to “hunt down” the paperwork laying out the details of the authority’s financial plan.

Huntingdonshire district councillor Martin Hassall (Liberal Democrat) agreed, telling the meeting that “it’s not acceptable” that the information was not more readily available, having only found “one little hyperlink” to details of the plan.

Mr Alsop said that there were links within the consultation to the finer details of the plan.

He later added “apologies” that “it’s been confusing”, but said that the authority had made an effort to publicise the consultation to the public.

Mayor Dr Nik Johnson is on medical leave. Picture: Keith Heppell
Mayor Dr Nik Johnson is on medical leave. Picture: Keith Heppell

The FAQs on the website state: “The Cambridgeshire and Peterborough devolution deal allows the mayor to raise a ‘mayoral precept’ from every household in the region to fund activities for mayoral functions such as transport.”

It adds: “The Combined Authority fully understands that many people are feeling the effects of the cost of living crisis.

“Similarly, public services are facing difficulties in balancing service demands, inflation and rising costs. In taking a decision about the mayoral precept we will need to balance the value of the services supported against the impact an increase in council tax will have.

“The amount of any precept would be agreed by the Combined Authority Board at its meeting on January 25, 2023. The board will consider the results of this consultation and the impact on households before making any decision.

“Any precept would be included in existing council tax reduction schemes such as single adult discount.”

Labour mayor Dr Nik Johnson has been on medical leave, with Cambridge City Council leader Cllr Anna Smith filling in for him.

Additional reporting: Alex Spencer and Local Democracy Reporter Hannah Brown

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