Whitby Town Council could raise precept by almost 12% due to rising costs and lack of reserves

At a meeting on Tuesday, January 14, elected members will decide Whitby Town Council’s budget for the coming 2025-26 period.

Councillors have been warned that due to reduced income, rising costs, and a lack of reserves, the authority might have to increase its precept by up to 11.88 per cent alongside possible cuts to create additional savings.

Last year, WTC spent £514,900 but next year’s budget predicts an increase in costs of around £40,000 alongside a “slight” drop in income of around £1,600 which is expected to amount to £187,700.

Officers have said they “cannot emphasise enough that the current level of reserves is significantly below the required amount” and that a precept increase is needed to shore up reserves.

Currently, the level of reserves stands at around £30,000 – just a fifth of what is recommended.

It is “good practice to have reserves between 30 per cent and 50 per cent of turnover” which for Whitby Town Council would mean between £150,000 and £250,000.

A report for councillors states: “Looking at auditor recommendations it would be sensible to add £170,000 to reserves in the next three years to bring reserves to £200,000 or approximately 40 per cent of turnover – this gives us a starting point.”

Officers added that gradually increasing reserves between now and the next election of May 2027 would mean raising reserves each January in 2025, 2026, and 2027.

If a lower precept amount of 9.18 per cent was adopted by councillors, it would raise around £405,000 and be equivalent to a Band D annual charge of £71.50.

However, the report does note the positive financial impact of changes to the tax base “caused by the introduction of second homes money” which has led to a “significant change”.

Additional savings have been proposed to budget as amendments by councillors, one of which includes cutting £20,000 from the Christmas lights budget as well as £5,000 from the devolution budget.

A separate amendment proposes that £10,000 be set aside to “upgrade the gallery as a meeting space” which would make the precept £415,000 and lead to an increase of 11.88 per cent.

Members of the public have been invited to attend the meeting at the Pannett Art Gallery in Whitby at 6pm, January 14.