Forum Brief: Council Tax capping

Ministers have ruled out capping local authorities this year despite protests from householders over council tax increases of up to 45 per cent in April.

Nick Raynsford, the local government minister, said that the government was disappointed that the average council tax increase was 12.9 per cent but capping would lead to too much disruption.

Forum Response: Local Government Information Unit

Dennis Reed, chief executive of the LGIU, told ePolitix.com: "With council taxes likely to rise to meet demands from Whitehall, such as new requirements in the children's services green paper, this intervention is disingenuous. Any decision to cap an authority will inevitably lead to a decision to cut services, undoubtedly one that government will not wish to dirty its hands with, and may indeed condemn.

"It should be for local voters to determine at the ballot box their verdict on the decisions of their town hall. ministers should encourage this by focusing on the more important and inter-related issues of reforming the balance between central and local funding of local authorities and the council tax."

Forum Response: Local Government Association

Sir Sandy Bruce Lockhart, vice chairman of the Local Government Association, said: "This is not about low council taxes. Everyone wants council tax to be as low as possible consistent with the provision of decent public services, sound local administration, and a fair balance between central and local funding.

"It is the government, through their requirements for increased spending acknowledged in the CSR and pre-Budget report which have forced up Council Tax."Currently if government requirements cause council spending to increase by one percent, that forces council tax up by four per cent.

"The government promised more financial autonomy for the councils independently proven to be good and excellent at the end of last year. We have had our arguments and believe that the freedoms and flexibilities are limited and not coming quickly enough, but nobody expected government to start threatening to renege on specific commitments.

"If this approach becomes the norm, councils would simply lose faith in talk of partnerships with Whitehall, and the damage to central and local relations would be very hard to repair.

"To date we have been able to work constructively with local government minister Nick Raynsford. The current work on the review of the balance of funding between central and local government is evidence of that.

"Today's announcement seems out of kilter with this way of working and we need an explanation. government has to let go, and trust councils who are deemed to be good and excellent to get on with the job, including the job of sound financial decision-making.

"The best thing the government could do to ensure sensible levels of council tax are set next year is to ensure the extra burdens that government places on council spending, in education for example, are funded, so that any decisions to raise council tax are taken by locally elected people who can be held accountable for those decisions."