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Low interest rates add to council's budget woes
9:10am Saturday 12th January 2013 in News
LOW interest rates are continuing to reduce Test Valley Borough Council’sincome, members of the council’s Cabinet have been told.
Between April and September this year investmentincome was £73,000 less than expected and current forecasts suggest this shortfall will continue over the remainder of the financial year.
Council experts are not predicting an increase in interest rates until the first quarter of 2015.
The council has a budget gap and it is looking at options to close it.
One is to raise its share of the council tax by 4.1 per cent – about 10p a week for a band D home.
Under current legislation most local councils have to keep increases below two per cent, otherwise they must be approved by a local referendum.
However Test Valley is one of 51 low tax authorities across the country that have special dispensation to raise taxes by a higher amount if they wish without triggering a local referendum.
Note TVBC’s share of the overall council tax is less than 10 per cent so a 4.1 per cent rise in its share would only push up the total bill by around 0.4 per cent.