Plymouth City Council raises council tax by 4.99%

Council tax will go up by almost 5% for people living in Plymouth from April.

The council said it was facing rising costs and demand in areas such as children's social care placements, homelessness and special educational needs.

Opposition councillors raised major concerns over an outstanding risk to council finances from a £72m pension transaction in 2019 which has not been signed off by the government.

The council says a letter from the previous government in February 2024 "provided assurance" the budget could go ahead but the report notes a risk of the council having to issue a S114 report - effectively declaring itself bankrupt.

The leader of the Labour-led council, Tudor Evans, told councillors at the end of the three-hour meeting that the finance officer had spoken with the government while the budget meeting was ongoing.

Evans said the finance office had received an assurance from the government that the council would receive written confirmation within two weeks that the issue would be signed off.

Evans said this was a "hugely ambitious" budget for Plymouth which he described as "punching well above its weight".

The leader of the Independent group on the city council, Patrick Nicholson, said he expected more with a Labour government in charge nationally and a Labour council in power locally.

He said: "I think many of us were hoping for a massive change of approach from an incoming government.

"Local government has been starved of resources - we see potholes around our city, we see insufficient resources for adult social care.

"We've got a new government but we've still got the same old approach."

Andy Lugger, the group leader of the Conservatives, said he understood the difficulties of balancing the books.

He said: "Because of all the competing resources that are required - we have adult social services, children's services - all of these are massive financial burdens on this authority."

Plymouth City Council borrowed £72m from the government in 2019 to invest in a company with the aim of reducing the council's pension fund deficit.

The previous government said in March 2024 the transaction was "not in line with normal accounting practice" and ordered an investigation.

It is not clear what has happened to that investigation and the BBC has asked the Ministry of Housing, Communities and Local Government for an update.

Plymouth City Council's budget report notes that if the pension transaction is not signed off the council's finance officer "would be required to consider issuing a S114 report".

Councils technically cannot go bankrupt - but they can issue what's called a section 114 notice, where they cannot commit to any new spending.

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