Welwyn Hatfield council tax set to rise by highest amount allowed

Households in Welwyn Hatfield are set to see their council tax rise by the highest amount allowed next year. Welwyn Hatfield Borough Council is proposing a 2.99 per cent increase to their portion of council tax, which means an average Band D property would pay £244.71 for 2025/26, an increase of £7.11.

The borough council’s charge makes up only a small percentage of the full amount of council tax payable. Hertfordshire County Council are proposing a 4.99 per cent increase to their portion of council tax, which would see a Band D property charged £84 more per year.

Both the 2.99 per cent figure and the 4.99 per cent figure are the highest amount allowed without a referendum. The proposal from Welwyn Hatfield Borough Council is part of the initial budget proposals, which were discussed at a cabinet meeting on Tuesday, 7 January.

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Cllr Max Holloway, leader of the council, said: “The council’s ability to deliver a balanced budget becomes more and more challenging each year. After a period of significant grant reductions, inflationary increases, and the ongoing impacts of the pandemic, we have seen a rise in demands on services like homelessness, which have added even more pressure, and we have continued uncertainty in the medium term.

“We have a very difficult period ahead of us, but I believe our ability to deliver savings and the strategies we have in place means the situation is sustainable for 2025/26 while we explore more options for the closing of the budget gap in future years.”

Around £808,000 of reserves are expected to be used in 2025/26, leaving a total of £5.65m in the reserves for the general fund - the account used to fund the council’s day-to-day spending. A council report said £1.6m in further savings need to be found by 2026/27 for the authority to “live within its means and maintain a reasonable cushion in reserves”.

Cllr Holloway said using the council’s reserves “aligns to the views of the community that we should be using our reserves to close the budget gap”. He continued: “Our level of general fund capital reserves is now depleted, which will constrain our operations for major capital spend over and above those projects already planned unless sources of funding can be identified.

“Clearly, it will be challenging to continue to find savings without impacting upon services as we enter the next medium-term period.”

The council’s medium term financial strategy recommends that it keeps at least £3.9m in the reserves at all times. Other budget changes include an expected £153,000 increase in income from commercial rent rises and an additional £141,000 from increasing planning application fees.

People living in council homes are also set to be affected by the budget, with rents due to rise by 2.7 per cent in line with government policy. The average rent will now be £134.88 per week. Cllr Holloway warned that the period for the council’s debt repayments for its ring-fenced housing revenue account - which is used for income and expenditure relating to the authority’s housing stock - has been extended.

He said: “Due to increased requirements on the housing revenue account from social housing regulations, a review of borrowing rates, and increased capital spend, the debt repayments … now stand at 33 years. This is just outside the thirty-year business plan, and this can be considered affordable because the life of the stock is longer than thirty years.”

A council report recommends that savings in the housing revenue account be made to “bring the borrowing back within 30 years where possible”. The budget will continue to be discussed in the coming weeks and is set to be confirmed at a full council meeting on 3 February.