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Norwich City Council votes for tax increase

PUBLISHED: 06:30 24 February 2010 | UPDATED: 08:23 02 July 2010

Sarah Hall

Families in Norwich will see the share of council tax they pay to City Hall increase by 2.2pc after councillors set a budget for the next 12 months - with a legal challenge to the award of a multi-million pound buildings contract hanging over the authority.

Families in Norwich will see the share of council tax they pay to City Hall increase by 2.2pc after councillors set a budget for the next 12 months - with a legal challenge to the award of a multi-million pound buildings contract hanging over the authority.

On Monday a High Court judge imposed an injunction to stop the award of the contract to fix and maintain council homes amid claims City Hall had accepted an “abnormally low” bid.

That injunction was sought by Morrison Facilities Services Ltd, the parent company of CityCare which currently provides a number of council services, after its £23m bid for the Housing Services Building Maintenance contract, lost out to Exeter-based Connaught Plc, which bid £17.5m for the five-year contract.

But Morrison successfully asked Mr Justice Arnold to impose an interim injunction preventing the contract being awarded to their rivals until a five-day hearing in June, which will resolve the dispute.

The challenge could saddle the council with extra costs - and potentially a pay-out to Morrison - but leaders last night pressed ahead with their budget plans and officers insisted contingencies were in place to ensure housing maintenance continues beyond the controversial contract's end in March.

At the meeting the city council, which is already trying to make £8m worth of cuts in the next two years, agreed a 2.2pc council tax increase and a general fund budget of just under £25.1m for the next financial year.

The rise will see the average band D property pay £255.87 to the city council for its portion of the council tax - on top of the share which goes to Norfolk County Council and Norfolk Police Authority - which have set rises of 1.9pc and just over 3pc respectively.

Amendments by the Liberal Democrats for a 1.79pc rise and the Conservatives for no increase were defeated, but the Labour administration did agree to set aside more cash which communities can decide how to spend, to freeze councillor allowances and to invest more in economic development and energy efficiency, after points raised by other parties.

The council also agreed to set a reserve level of £4.6m and to build up a £2.5m contingency fund over the next five years.

Steve Morphew, leader of the council, said: “Although no tax rise in a recession is popular, this is a balance between a reasonable increase and the need to protect and improve key services for the city.

“The biggest contribution by far this year has come from efficiency savings in the council and we will continue to look for better and more cost effective ways of delivering services and improving the quality of life for the people of Norwich.”

No mention was made of the legal challenge at last night's meeting, but council bosses were yesterday keen to stress it only affects the council house maintenance contract and not others, such as refuse collection and recycling.

In court on Monday, council solicitors had warned the authority would have to spend £1m a month when the contract ends, to pay for an alternative provider to fix and maintain 18,000 council homes in Norwich.

It is understood the £1m quoted in court relates to the price difference between CityCare continuing the contract and the planned new provider Connaught taking over, so it remains unclear what a 'contingency plan' would cost the city council and who would provide those services.

A city council spokeswoman said yesterday: “We have been working on contingency plans for some time and we are considering a number of options on how we will deliver services while the temporary injunction is in place.”

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