16 July 2004
The six authorities capped by local government minister Nick Raynsford were angrily preparing to issue new council tax bills this week after their appeals were turned down.
Nottingham City Council deputy leader Mike Edwards complained that it would cost £250,000 to make a £180,000 rebate to council tax payers. 'I am hugely disappointed. Sixty-five other authorities got letters warning them they could be capped but we did not, so we thought we were safe,' he said.
He said Nottingham's problems arose from the way the government had calculated the effects of the county fire and rescue authority precept.
But Raynsford said every council had been warned of both the capping criteria and the need to meet rebilling costs. 'There is simply no justification for excessive tax increases. We expect all councils to behave prudently, and expect council tax increases in low, single figures next year.'
Councils should keep bills down while improving services by exploiting savings from e-government, Raynsford suggested. The authorities capped this year are: Fenland, Herefordshire, Hereford and Worcester Fire, Nottingham, Shepway and Torbay. A further eight will be limited in the budget increases they can make in 2005/06.
Hereford and Worcester Fire Authority had its capping limit raised by £1m following representations to ministers. It now has to cut its £25m budget by £1m instead of £2m as originally ordered.
Treasurer Mike Weaver toldPF that the decision ought to stave off the threat of redundancies. 'But it does completely frustrate our modernisation agenda. We'll have to redirect resources away from fire prevention,' he said.
Weaver said the estimated £500,000 cost of rebilling will also have to be found from within the new budget limit. 'The fact that the government has raised the capping limit shows that they accepted the arguments we put forward, but we are still very disappointed that we were capped,' he added.
Herefordshire Council said it was 'dismayed and disappointed' the government had confirmed its capping order. The authority's leader, Conservative Roger Phillips, said it would now have to spend £100,000 to cut £253,000 from its £175.5m budget.
Shepway District Council has been ordered to cut its budget from £16m to £15.4m. Liberal Democrat council leader Linda Cufley said it would cost £100,000 to rebill residents to save band-D owners £15.60 a year.
'At this level of capping, we will have to make some very tough choices,' she said.
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