Councils escape yellow card over their tax rises

13 Apr 00
No council will be warned or capped over council tax increases for 2000/01, ministers decided this week.

14 April 2000

At the beginning of the week, three unnamed councils were supposedly at risk of being called in by ministers to receive a first warning – a 'yellow card' – over large tax rises and to be warned about their future budgetary plans.

But, following discussions between ministers and officials at the Department of the Environment, Transport and the Regions, it was decided that no council had breached the government's spend and tax rules.

A government source said: 'There won't be any yellow-carding this year, but that's not to say ministers aren't concerned.'

Both ministers and local government were describing the decision as a victory.

Labour claimed its approach of allowing councils a little more to spend while making clear it would not tolerate large rises had been vindicated.But the government warned it would clamp down on future large rises. 'Everyone wants to see councils behaving. Double-digit council tax increases are unacceptable,' said the source.

Average increases for the current financial year stood at just over 6%. Councils thought to be under threat included Epsom and Ewell, which set a 7% increase, and Mid-Bedfordshire, which increased bills by 7.1%.

Last year, 12 councils were warned about their future conduct. But all have avoided being censured this year.

Local government representatives claimed the decision was a sign of growing trust between the government and councils over finance. Mike Grealy, deputy director of local government finance at the Local Government Association, called the decision 'excellent news'.


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