Cross-party move to plug funding gap left by Nottingham students

The Government needs to address a funding gap that exists because of the high proportion of students in Nottingham, leaving the city short of Council Tax, according to Nottingham City Council.

In a cross-party move, the City Council’s deputy leader councillor Graham Chapman and Leader of the opposition councillor Andrew Rule, have raised the issue in a letter to the Secretary of State for Communities and Local Government, Sajid Javid MP.

They want to see the Government carry out a review into the amount councils get to compensate for students not paying Council Tax or introduce a charge on student households.

Last year Nottingham City Council says it lost £13m in Council Tax because student households are exempt from paying. The Council says the Government has cut the funding it provides to compensate for this loss, allowing only £5m which left a shortfall of £8m.

The Council says the problem is “particularly acute” in Nottingham which at 15% has the highest proportion of students of any of England’s Core Cities and almost four times the national average – 46,000 in an overall population of 305,000.

Councillor Chapman said: “We welcome students to Nottingham – they enrich city life and often stay to work here and make it their home. But the fact that they don’t pay Council Tax and the Government doesn’t compensate us enough for this leaves us at a disadvantage when it comes to providing services for everyone in the city.

“We are urging the Government to take action to rebalance the unfairness in funding for cities with large numbers of students like Nottingham. Whilst they rely on and use public services, they do not pay council tax. The result of this is that cities with large numbers of students are discriminated against on the grounds that the compensation for student exemptions has diminished with reductions in government grant.”

Councillor Rule added: “We want students to make Nottingham their home, but this must not be at the detriment of other residents and the services they rely on. Because of the high proportion of students in Nottingham, the Council Tax exemption and shortfall in Government compensation creates a greater impact on our ability to provide services for the whole population. If the imbalance is corrected, this will help relieve pressure on adult social care and children’s safeguarding.”