'Freezing council tax was the right thing to do'

A former council leader has spoken out to defend his administration's decision to freeze council tax "during a time of austerity".

An independent report into Shropshire Council's dire financial situation claimed the legacy impact of historic council tax freezes was one of the reasons why the authority was struggling to balance its books.

The council did not increase its share of the bill for six years, from 2010 to 2016, resulting in a cumulative loss of income, thought to be worth about £20m by the last financial year.

Former Conservative leader Keith Barrow said the council had benefitted from specific government grants to freeze council tax, which was "at the time, the right thing to do".

The decision was recently criticised by the current council leader, Liberal Democrat Heather Kidd, who said residents would likely face further unusually higher council tax bills in future "to pay for the mistakes of the past".

From April, households were hit with an 8.99% increase to their bills - 4% above the accepted threshold.

Barrow said: "If tax had been increased instead of being frozen, then Band D bills would have been £500 higher now, assuming everything else stayed the same.

"It is fair to say that if we had increased council tax to the maximum amount we were allowed to at the time, which was 2%, then the council would now have an extra £20m in their base budget.

"But the council currently has a funding shortfall of £120m [for the 2026-27 financial year] and they [Liberal Democrat administration] are not delivering savings."

For two financial years from 2011 to 2013, Shropshire Council opted to receive a theoretical 2.5% increase in council tax through the government's council tax freeze scheme.

The coalition government introduced the grants to help families with the cost of living in the aftermath of the financial crisis.

The funding was later reduced to the equivalent of a 1% increase on Band D rates for the following three financial years.

The long-term revenue loss of accumulative increases of council tax over six years "still has a significant impact", according to the Chartered Institute of Public Finance and Accountancy, which undertook a review of the council in May at the request of the government.

Its report, published last month, also blamed the financial pressures facing the council on a significant increase in expenditure on social care as well as "a lack of adequate financial management" in the past.

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