Shrinking returns for Arun could see taxpayers footing bill with rate rise

The tumbling returns to historically-low levels on its investments have hit the income of Arun District Council.

Councillors meeting on Monday, January 26, to take an initial decision about increasing their share of the 2009 council tax bill by three per cent will be told the forecasted interest and investment income for next year will be 1.3m less than the total projected for the current year.

The expected figure of 883,000 compares to the likely 2.46m for the year to the end of March.

The shrinking returns are just one way in which the council's finances are being battered by the recession.

Less development activity means 'a significant reduction' in the income generated by planning-related activities such as fees for planning applications, building control and land charges.

Further bad news comes with a rise of government funding of just 0.5 per cent to 10.148m.

Arun head of finance Alan Peach will recommend the three per cent rise '“ or 4.59 '“ in its band D council tax to 157.50 for the coming year to generate 9.3m to help maintain the council's income.

He says in a report: "I am satisfied that the estimates, as presented in this budget, are sufficiently robust and that the reserve balances proposed for 2009/10 are adequate."

But he warns councillors remedial action would soon be needed to correct a large hole due to arise from the council's expected level of spending.

It is likely that the 2009/10 general fund revenue budget will see almost 2m taken from the reserves to balance the books.

This will leave the balance at less than 5.5m.

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