Bedford council collects over £3million less council tax in first half of 2020-21

Institute for Fiscal Studies said the impacts of the coronavirus pandemic means some councils may face difficult trade-offs for what they can afford

By Clare Turner
Friday, 19th February 2021, 11:38 am
Updated Friday, 19th February 2021, 11:40 am

The council collected over £3million less in council tax than expected during the first half of the financial year, figures reveal.

The Institute for Fiscal Studies (IFS) said the impacts of the coronavirus pandemic means some councils may soon face difficult trade-offs for what they can afford.

Figures from an IFS report show Bedford Borough Council forecasted it would collect a total £116.3million from council tax requirements in 2020-21 – 5.5 per cent more than the year before.

Bedford council collects over £3million less council tax in first half of 2020-21

With council tax collected over 10 months, its expected income in the first half of the year was £62.6million but it collected just £59.3million.

This means the council collected around £3.4million less than it hoped to in the first two quarters.

Bedford Today approached the council for comment earlier this week.

The IFS says some councils allow people to defer bills, so their receipts for the second half of the year may be much higher.

However, it warned that councils across England expect to collect £1.3billion less council tax this year than they forecast, with some areas suffering more than others.

And it added that as councils in the south rely more on council tax, the shortfalls in their revenues will be similar to those in the north of England, relative to their overall funding.

Kate Ogden, a research economist at IFS and co-author of the report, said: "The Government has agreed to cover 75 per cent of this shortfall, and to provide £670million to help fund means-tested discounts in 2021–22.

"However, if this support is then withdrawn, those councils seeing the biggest long-term impacts of the crisis on employment and household incomes may face particularly difficult trade-offs between cutting this means-tested support or cutting funding for at least some other services in 2022–23 and beyond.”

Councils nationwide might be collecting less council tax because of people failing to pay bills, or becoming eligible for support, the IFS said.

Figures from the report show 8,022 working age residents in Bedford were claiming Local Council Tax Support between July and September last year, and 7,914 between April and June.

This means the council will take in £8.2million less in council tax revenue in 2020-21 than it could have – up from £6.5million in 2019-20.

The Local Government Association said it was encouraged by the Government's pledge to compensate 75 per cent of lost income, but warned that the remaining 25 per cent – potentially more than £250million – is "considerable".

It is calling on the Government to revise its funding package in next month's Budget and meet the financial challenges of Covid-19 "in full".

The Ministry of Housing, Communities and Local Government said the Government has committed over £11billion to support councils in England.

A spokesman added: "This includes a guarantee to meet 75 per cent of losses in council tax and business rates income this year, worth an estimated £800million, and £670million of new funding to enable them to continue reducing council tax bills next year."