The leader of Test Valley Borough Council has his say in his monthly column

Later this month, Test Valley Borough Council will set its budget for 2021/22. At the same time, we need to decide how we plug the gap in our finances brought about by coronavirus. Our loss in income combined with increased costs means the council is £6.3m worse off this year because of the pandemic. Thankfully, various tranches of government grants and other variances have helped offset this, meaning we’re looking at a deficit of £1.4m for 2020/21.

The question is how do we deal with that deficit? Broadly speaking, we have three options. Increase council tax by a larger amount next year, reduce services or use our reserves. The Cabinet is strongly recommending the latter, recognising that with coronavirus all our rainy days have come at once. Whilst we’re conscious that we can only spend reserves once, we think that a £1.4m drawdown from our equalisation reserve is the right decision in these unprecedented times.

We also recognise that Covid-19 is also going to have a profound impact on our budget for 2021/22. The difference being that we don’t have the insurance of receiving the level of government support we did this year. In fact, the government is assuming that we’ll put council tax up by £5 and builds that into its assessment of councils spending power.

In order to close the budget gap for next year, the Cabinet is proposing that we make a further draw on our reserves of £142K coupled with a much more modest council tax increase of £2.50. Meaning that Test Valley residents will pay an average of £148.91 next year. Last year, Test Valley’s council tax was £41 lower than the average for the rest of England – and with many councils intending to put their precept up by the full amount – our 1.7% increase will at least maintain that position, if not extend it.

Recognising the impact the pandemic has had on livelihoods, we are also maintaining our generous council tax support scheme to keep helping those on low incomes. Overall, we believe this is the fairest way to ensure we continue to maintain top quality frontline services, whilst keeping the council on a stable financial footing.