Student majority warning causing funding gap

Members of Nottingham City Council have written to Communities Secretary Sajid Javid about a growing funding gap in the city caused by the high proportion of students in Nottingham leaving the authority short of council tax.

Figures show that Nottingham City Council lost £13 million in council tax because student households are exempt from paying, which, alongside government funding cuts to compensate for this loss, has provoked the council into seeking a review into the amount councils get to compensate for students not paying the tax, or a charge on student households.

Graham Chapman, deputy leader, and Andrew Rule, leader of the opposition, have raised the issue to the Secretary of State for Communities and Local Government, saying that having high number of students should not be at ‘the detriment of other residents and the services they rely on’.

Nottingham has the highest proportion of students of any of England’s Core Cities (15 per cent), which is almost four times the national average – 46,000 in an overall population of 305,000.

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.”