DESPITE opposition calls for a lower increase, council tax in Newport is to rise by 4.5 per cent from April after councillors passed the city’s budget.
The Newport council budget includes £10 million of cuts for the next year but could potentially see more than 1,000 council workers getting a pay increase as the authority moves to paying a living wage.
Cllr Bob Bright, Labour leader of Newport council, told last night's full council meeting: “Last year I said the continuing pressure on local government budgets would get worse.
“Indeed that has proved to be the case.”
He said even with the 4.5 per cent council tax increase Newport would still have the second lowest council tax rate in Wales.
Much of the debate surrounded Tory leader Matthew Evans’s proposal of an alternative budget that would have limited the tax increase to 3.5 per cent.
It would have provided funding in the base budget to store and maintain the Newport Ship, and ended Newport Matters.
“You have already admitted that people are struggling, so a one per cent reduction in council tax would give everyone across the city a welcome boost,” he told councillors.
But there was consternation from Labour members over Cllr Evans’ proposals for a delay to the implementation of the living wage.
Paul Hannon, Labour councillor for Beechwood, suggested the alternative budget was "utterly immoral", saying councillors were being asked to make poor staff suffer so the richest city residents can benefit.
Council leader Bob Bright pointed out that even Tory London mayor Boris Johnson supports the living wage, saying the council wasn’t “standing up in splendid isolation”.
But Tory councillor Martyn Kellaway suggested he found it immoral that people on the minimum wage could have to subsidise the living wage for council workers.
With Labour holding a majority over the council the alternative budget failed with the overall budget remaining intact.
Newport council currently spends around £250 million every year but, like all other Welsh authorities, Newport is facing cuts with £25 million of savings needed over the next four years.
The Welsh Government, facing UK Government cuts, is imposing a 1.2 per cent cut in its grant to the authority.
The plan to rise council tax by 4.5 per cent would put the bill for an average band D property up to £893.37 – an increase of £38 a year.
Savings for 2014/15, voted through on Tuesday night, include cutting £333,000 from the council’s IT services budget, £105,000 from the Newport Ship budget and £86,000 by closing museum and central library one day a week.
The budget includes proposals to increase wages for low paid workers to the level of the "living wage" - £7.65 an hour.
Currently the council has around 1,600 staff earning less than that. A total of £1.04 million is being put aside over the next two years to pay for it.