Oldham chiefs have lifted the lid on why they aren’t offering residents a 50% discount on their council tax during the coronavirus crisis.
At the first virtual cabinet meeting since lockdown began, bosses gave a response to calls on social media for reduction in tax.
Cllr Abdul Jabbar, portfolio holder for finance, explained that for the town hall to give residents a discount, it would need government intervention.
“We’ve been receiving a lot of comments on Facebook and Twitter and so on about why isn’t the council giving people 50% reduction in council tax,” he said.
“They made comparison to the business rates holiday that’s been given to retail, hospitality and leisure sectors before the full financial year.
“The reason for that is that council tax is highly regulated and at a local level, once the council tax is set we don’t have any discretion whatsoever to change the amount of council tax that is being charged to individuals.
“If the government were to today say, well people can have three months holiday for their council tax then we could implement that but as a council we can’t unilaterally do that.”
The meeting was told that unemployment in the borough is expected to increase from 4% to 19% ‘by the end of next month’ as the economic impact of COVID-19 bites.
It comes as council leader Sean Fielding said they estimate that responding to the coronavirus pandemic could cost the town hall ‘in excess of £46m’.
He added that despite the government funding pledged so far, it would still leave them ‘£31m adrift of where we could be in terms of lost income’.
“They told us to spend whatever was necessary in order to respond to the coronavirus pandemic and we have done exactly that because we have a duty to our communities,” Cllr Fielding said.
“We must be fully reimbursed for the money we are spending to support the most vulnerable and to support businesses.”
He told the meeting that it was ‘particularly important’ for people to keep paying council tax because of the loss of income and extra costs the town hall was facing.
“I do think that the majority of people out there do realise that it is important to continue paying council tax because of the pressure on council services generally and how necessary council services are to so many people right out there in the borough,” he said.
“Public services do need to be appropriately funded.
“Of course I would support a reduction for people if the government were to announce the funding to enable us to do that and to enable a change in the rules.”
Director of finance Anne Ryans said they expect to spend £2.7m more on council tax reduction, and there will be a 35% increase in the number of people qualifying for help.
People can also apply for a three month ‘council tax holiday’ whereby they split their bill over nine months, from July to March, and pay nothing until July 1.
*Report by Charlotte Green, Local Democracy Service