City councils approve maximum council tax hikes

Both Southampton and Portsmouth City Council have approved a 4.99% council tax rise from April.

Portsmouth City Council said that the increase, which is the maximum permitted by government, is expected to raise £5.1m for the council.

While in Southampton, councillors said the budget will rely on savings made by "transforming how the council operates".

Both councils have seen increasing cost pressures, particularly in social care and temporary accommodation.

Southampton's Labour-led city council set a balanced budget on Wednesday, with all opposition groups voting against it, according to the Local Democracy Reporting Service.

Those same groups voiced fears that the authority had not yet made it out of its financial mire.

But council leader, councillor Lorna Fielker, called the budget "a return to long-term financial sustainability."

Cabinet member for finance, councillor Simon Letts, said it was the first time in 14 years that the medium-term financial strategy was balanced over its full five-year period.

He also confirmed that exceptional financial support (EFS) had been extended for a second year by the government.

"I think we are now going to go on to an era where we will be able to invest in Southampton and its citizens rather than remove services and make cuts," Letts said.

Liberal Democrat group leader councillor Richard Blackman said the situation now was very different to 12 months ago when there was "uncertainty" and "fear" in the chamber.

Conservative group leader Cllr Peter Baillie said the budget needed "favourable" winds to survive the year "unscathed".

Councillors in Portsmouth raised concerns over financial pressures and called for increased government funding.

Over the past year costs associated with temporary accommodation increased by 84% in the city.

The authority faces an £18.8m rise in spending and a projected £9m budget gap by 2028/29.

Councillor Steve Pitt, leader of the Liberal Democrat-run council, described the financial situation as "precarious".

"It is difficult not to feel as if we're being tossed about on a very small boat on a very big ocean and that our future is largely not in our hands," he said.

The council's chief finance officer Chris Ward said local government funding has not kept pace with rising costs.

A point of contention on the budget was around a plan to replace the council's offices.

Opposition groups recommended taking money from the fund to support their proposals.

However, Pitt argued that deferring the project would be costly in the long-run.

All amendments put forward by both Labour and Conservative councillors were accepted.

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