Rates will most likely have to be increased for the next financial year ‘to much higher than experienced in previous years’, according to five local authorities.

They have said local authorities can’t ‘just simply absorb a higher cost base without increasing their rates’.

The local authorities of Braddan, Castletown, Douglas, Port Erin and Port St Mary felt they should tell the public they are ‘not immune’ to the cost pressures currently being experienced.

Unlike Central Government, whose tax income position automatically increases as the working population’s income tax and National Insurance contributions go up, the same does not apply to local authorities who have a legal obligation to balance their budgets.

As the January 31 deadline for the setting of rates moves closer, the local authorities said: ‘With all of these scenarios, it is probable that many local authorities will have no choice but to levy a rate much higher than experienced in previous years.

‘The authorities do understand that this will not do anything to ease the pressure on those ratepayers, nor businesses feeling the strain and it is with great regret that ratepayers need to be made aware that local authorities face an extremely difficult series of decisions in their rate setting announcements in the New Year.’

They explained that inflationary increases suffered by suppliers have to be passed on and high levels of rate increases are ‘unavoidable’.

With Manx CPI (Consumer Prices Index) inflation currently running at just over 10%, local authorities are having to factor in an uplift of costs into their budget forecasts for the 2023/24 financial year.

These don’t just account for further cost increases, ‘but also have to make good the budget shortfalls experienced this year due to the rapid surge in inflation’ since the current year’s rates were set back in January 2022, ‘compounding the problem’, said the authorities.

The local authorities added: ‘We are acutely aware of the impact that the cost of living crisis is having on their ratepayers, and of the cost pressures faced by businesses.

‘The risk of ratepayers struggling to afford paying their rates in full and falling into arrears is increasing, and residential ratepayers finding themselves in this position are urged to seek help from organisations relevant to their own individual circumstances.’

These include the Office of Fair Trading, the Manx Citizens Advice Bureau, Salvation Army, Age Concern, Treasury’s social security division, and government’s ‘Help for Households’ website.