MANY councils will face bankruptcy within three years and York must take urgent action to avoid becoming a casualty, the city’s council leader has warned.
Coun James Alexander voiced his fears about the future of local democracy during a live online discussion on The Press’s website yesterday, in which he fielded questions about City of York Council’s budget for the next two years.
Its proposals for 2013/14 and 2014/15 will emerge on Monday ahead of the February 28 budget meeting. Coun Alexander confirmed council tax bills in York would rise next year, but said the increase was necessary to stave off problems further down the line.
He said he believed councils which accepted a council tax “freeze grant” from the Government would store up crippling funding difficulties for future years, describing the offer as a “buy now, pay later option” which would threaten some authorities’ futures and lead to others having to outsource virtually all their services to private companies.
“More and more councils will face bankruptcy and I suspect this will occur in 2015/16, when many will be hit with the paying back of two council tax freezes,” said Coun Alexander.
“I have expressed this view to national politicians and the reaction I receive is that I am right, but action is not going to be taken to resolve the situation.
“I believe this will increase the cost to the taxpayer, as the Government will have to take charge of collapsed councils.
“In York, we are taking tough decisions now and investing for the future to ensure York is not among this list of teetering councils.”
Coun Alexander said raising council tax for 2012/13 and next year would mean the city avoiding about £4 million of extra service cuts or higher bills in future, and would allow more care funding.
"He said the £11 million the council must save to balance its books in 2014/15 could not be solely met through “efficiency savings”, and he believed the current funding system for councils was “not sustainable”.
Coun Alexander also defended the controversial removal of York litter bins, saying the council could not afford to keep funding those which were “underused” and there was no indication litter had increased.
He said he hoped funding for ward committees, which was cut this year, could ultimately rise again, and there were no plans for any libraries, children’s centres or leisure facilities to close over the next two years.
The council was still considering how to save money on garden waste collections, including possibly charging for the service.
• Read Coun Alexander’s full online interview>>