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From April 2017 households in a Band D property will pay an additional £5 a year to the city council. As 80% of the district's homes are in the lowest bands (A to C) the actual increase will be even lower than 10p a week for the majority of households.
The decision was made at a meeting of Full Council on Wednesday evening (February 1).
Coun Anne Whitehead, told the meeting that while the council tax increase will help the council balance its budget for the next financial year, the long term financial outlook for the council is austere.
By 2020/21 an additional £2.3million will need to be saved each year to balance the books following further Government cuts.
From April a series of major reviews will look at how the council can work more efficiently and prioritise which services it wants to provide.
One piece of good news, however, is the potential creation of a £500,000 reserve to help boost the local economy and take advantage of opportunities presented by the opening of the Bay Gateway.
This money, if confirmed at the annual budget council on March 1, will be used to help boost the economic growth, promote inward investment and encourage more businesses to relocate to the district.
Coun Anne Whitehead said: “The council’s financial position continues to be extremely challenging.
“While we would rather not have to raise council tax, it will help to avoid the need for even more severe budget cuts than those we are being forced to make and to meet the challenges of the future.
“Some very difficult decisions will need to be made in the next few years and some services will need to be prioritised over others if we are to balance the books.
“At the same time I’m glad we’ve managed to find some money for helping the local economy. The Bay Gateway presents us with a massive opportunity to promote inward investment to the district and the creation of a dedicated reserve, if confirmed as part of our budget, will allow us to dedicate resources to boosting the local economy.”
While as the billing authority Lancaster City Council collects Council Tax, it only receives around 13% of the total bill to spend on its services.
Excluding parishes, of the remaining bill, the majority goes to Lancashire County Council (73%), with precepts from Lancashire Police Authority (10%) and Lancashire Combined Fire Authority (4%) making up the rest.
Last updated: 06 February 2017