Luton Borough Council defends council tax rise

One of Bedfordshire's local authorities has decided to increase its part of the council tax for 2012-13.

At a meeting on Thursday, Labour-controlled Luton Borough Council rejected a government grant and raised council tax by 3.44%.

The council had been offered £1.6m if it froze council tax for another year.

It said accepting the one-off grant would leave a shortfall in its finances in coming years.

The authority needs to find savings of about £16m in the 2012-13 financial year and said the 3.44% rise would raise an extra £2.2m.

It confirmed an additional £2m spending on care for adults and an extra £1.2m on supporting and protecting children, from its total budget of £152m.

'Long-term impact'

Councillor Robin Harris, portfolio holder for finance, said: "The executive recognises how difficult any increase in council tax will be for the people of Luton.

"However, if Luton Council was to take the money on offer from the government, it would leave us with a hole in the following year's budget that would grow larger, to around £8m over the next five years.

"The government offered a one-off grant equivalent to 2.5% on the council tax if we froze it for another year.

"I have looked at this offer very carefully but, having worked through the long-term impacts on the level of cuts we would have to make on services to the vulnerable, I recommended that we did not accept it.

"Taking this one-off payment would lead to the council having to make even more savings this year and an even greater increase in council tax in following years."

The council tax increase equates to £39 a year or 75p a week for a band D property.