Wolverhampton council tax 'to rise by 4 per cent'

Finance chief Councillor Andrew Johnson said the authority was in 'a dilemma' as it tried to balance the books.

For the second year running, the council is expected to approve a rise of up to 1.99 per cent. And for the first time, the government is giving local authorities the option of raising the tax by a further two per cent on condition it is spent on adult social care, one of the biggest expenses councils face.

The cabinet will decide at tonight's meeting whether they will take up the option. The council's finance department is recommending that they do.

If both rises are passed, it will mean an increase for residents in Band A of £37.03 a year and for those in Band D of £54.65 a year. The majority of Wolverhampton's households are in Bands A and B. A final decision will be made in March.

Councillor Johnson said: "Increasing council tax is something under consideration but we haven't come to any firm conclusion as yet. It has left us with a bit of a dilemma. We don't want to levy additional charges on people but on the other hand we have to balance the books."

Bosses say the two per cent council tax rise will only raise £1.6 million, due to the low number of houses in the high council tax bands.

Councillor Malcolm Gwinnett, of UKIP, said: "The council will say it's because of the cuts from government and I don't dispute this but the council has not handled its finances well."

A total of £46m in cuts need to be found by 2019.

To meet the target, services have been axed or dramatically scaled down. Among them are the neighbourhood wardens scheme, which has gone, with cuts also to roads maintenance, children's and cultural services and community groups.

Hundreds of jobs have already been lost as the council looks to make a total of 2,000 redundancies.

Last year rents across the city rose by 3.11 per cent – more than two per cent higher than the increase recommended by the Government.

The council is £293m in debt and saddled with interest payments of £27,000 a day.The rising cost of looked-after children and increasing wage and pension costs are said to have contributed towards the city's current financial position.

The 1.99 per cent increase option is still out to public consultation and a final decision will not be made until March.