COUNCIL tax is to rise to 2.99 per cent as Southampton’s city authority looks to save more than £15 million by 2021.

Civic bosses say this increase, which equates to about £41.30 a year for Band D homes, will allow it to maintain “vital” services while battling slashed government grants – which are set to be reduced by 54 per cent over the next three to five years.

They add that council tax only covers 17 per cent of its total spend.

Now the authority’s new budget plan, which was released yesterday, includes significant cuts, despite already saving £136.4 million over the last seven years.

The main areas to be hit include adult social care, with a proposed budget for 2019/20 of £48.91 million – £4.33 million less than this year’s £53.24 million budget.

The major saving in this area, the council says, is down to the closure of two nursing homes: Glen Lee in Bitterne, and Holcroft House in Thornhill.

This is expected to save £1,327,000 per year from 2020/21.

Council leader Chris Hammond says both homes are operating at nearly-half capacity, as many locals prefer Stay at Home care.

“There is a shift away from people using care homes, instead opting to receive care in their own homes,” he said.

“As a council we also need to transition over to this and help to provide residents with this care that they’re asking for.”

Residents of the two homes will be moved to other locations. But if provision cannot be found, Cllr Hammond said the authority will look to get them in private accommodation and “pick up the difference” in cost.

Currently, 70 staff work at the two homes, both full and part time. The council says it will work with them as they are moved to other areas of, or out of, the service.

A new charge is also to be introduced for blue badge holders who use council owned off-street car parks, which will see them billed the same as other motorists.

Other cuts include the reduction of councillors expenses budget, which will save the council £35,000 per year.

Cllr Hammond said: “Local governments are currently being funded [as a share of GDP] at the same levels as 1948 and councils are now at a breaking point, like Northamptonshire and Somerset.

“We have prioritised maintaining the services that residents say are important to them, but to keep them at the same level as they are now means we will have to increase council tax.

“It is about striking the right balance.

“The key is trying to maintain the level of service that people expect, while balancing the books of the lessening grants from central government.”

However, the plans still need to be scrutinised and will have to be approved before they are implemented.

A 12-week consultation of the proposals will also take place, starting October 24.

Dan Fitzhenry, Southampton Conservatives leader said: “Here we go again. Closing care homes, increasing charges and no commitment to any additional services.

“It is another Labour budget that delivers nothing while asking residents to pay more.”

Harry Fone, of the TaxPayers’ Alliance, added: “This council tax hike, alongside their bonkers clean air tax and higher tolls on Itchen Bridge, is yet more bad news for hard-pressed taxpayers in Southampton.

“The highly paid council executives, with half a dozen on more than £100,000 a year, need to stop wasting money on vanity projects like bollards on Northam bridge. If they don’t get a grip soon, the council can expect even more local people supporting TaxPayers’ Alliance action days in the future.”