'We are in a very tricky situation' - Rugby council passes 'sombre' budget to cover huge drop in funding

Rugby's town hall.Rugby's town hall.
Rugby's town hall.
A small increase in council tax is one of the ways the council is attempting to cover the shortfall

Rugby Borough Council will need to find new sources of income in the future according to its leader when he announced the budget and council tax for the coming year at a full council meeting this week, February 23.

And although the budget was labelled ‘sombre’ by the opposition Liberal Democrat group, they approved the figures with the Labour group abstaining from the vote.

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The council will receive no core grant funding from the Government in 2021-22 following the removal of the revenue support grant, and is projected to receive £800,000 less in retained business rates and New Homes Bonus funding than in 2020-21.

Leader Cllr Seb Lowe (Con, Coton and Boughton) announced a £5 council tax increase for a band D property which would bring an extra £235,000 to the council.

He added: “Savings and new income sources will cover a further £760,000 of the budgeted shortfall, however, it will be necessary to move £734,000 from our reserves as a one-off movement to ensure that we deliver a balanced budget.

“The pandemic has seen our costs increase and income decrease. Through prudent financial management we have sufficient reserves to protect the services that residents value over the next year, but we will continue to look to alternative sources of funding for future years.

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“It is traditional for each of the political groups to deliver a resolution announcing a suite of additional discretionary spending. This year the Conservative group has chosen not to do this given the financial position we find ourselves in and in the spirit of the financial prudence that has been one of the hallmarks of the way we have run this council over many years.

“I note that the other parties have taken the same decision and for that I commend them. The current pandemic has seen our community pull together and it is heartening to see all councillors in the chamber put their differences aside and do the right thing for Rugby.”

Liberal Democrat group leader Cllr Jerry Roodhouse (Paddox) said: “This is a sombre budget and it is with a heavy heart that we will be voting for it to go through. I agree that we all have to do the right thing for Rugby and its residents and to keep the services going we do need to pull together and work across the political divide.”

And Labour group leader Cllr Maggie O’Rourke (Benn) added: “The borough is facing one of the toughest financial climates in living memory. It’s future hangs in the balance - it is being forced down the unitary authority road that this government so clearly wants, moving away from local democracy.

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“As a council we are facing a range of very tough choices including, for the first time in my memory having to use our reserves to meet the financial shortfalls in Covid funding.

"We feel we are in a situation now that, if this continues and we have the uncertainty in the future in terms of funding, this council will no longer be sustainable no matter how hard officers work. We are in a very tricky position."