Liverpool takes top council tax slot (again)

8 Mar 01
Liverpool City Council will once again set the country's highest council tax, despite freezing tax levels for a third successive year.

09 March 2001

Earlier in the year, it had looked as though the council would be forced to raise its tax. Hit by changes to the area cost adjustment, falling pupil numbers and a declining population, the city this year received a Standard Spending Assessment (SSA) increase of 2.2%, well below the national average. Even with the introduction of a 'floor', guaranteeing the council a 3.2% increase in grant, finances were tight.

But the Liberal Democrat majority on the council held firm to its pledge to keep the tax as low as possible. The freeze, which will keep the band D level at £1,171, means the council has had to find an extra £650,000 to finance increases levied by the police and fire services – which raised their precepts by 5% and 2% respectively. Despite the shortage of funds, the council will increase school spending in line with its education SSA.

The city, which is undergoing a modernisation programme, believes its financial position strengthens the case for a speedy review of grant distribution. 'How is it that a council that freezes [tax] for three years still has the highest council tax in the land?' said head of financial management Robert Corbett. 'It can't be that we are so wasteful. There must be something fundamentally wrong with the whole [funding] mechanism.'

Other high-taxing councils will be sweating over Liverpool's decision to freeze council tax again. A number of authorities with band D tax levels over £1,000 keep one eye on Liverpool when setting their own budgets.

Redcar & Cleveland Borough Council was closest to Liverpool last year. It has also frozen council tax this year, following on from last year's 4.5% rise. Its band D, not including parish precepts, will be £1,071.85.

A 5% rise by Salford City Council will increase band D to £1,084, although the council pointed out that 77% of households were in the lower cost bands A and B. The Metropolitan Borough of Wirral will also edge closer to the unenviable top spot, with a 4.5% increase taking its band D to £1,077.24.


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