21 February 2003
Council tax increases in London and the Southeast are set to soar above 25% for the first time, fuelling allegations that the government has shifted significant resources to the Midlands and the North.
Research by Public Finance shows that the average Band D council tax will hit well over £1,100 across London, with increases between 15% and 27%. The Southeast county councils are reporting increases of between 11% and 18%.
In contrast, the metropolitan districts and counties are setting single-figure increases of between 4.4% and 9.5%. Scottish local authorities have announced average rises of just 4%.
Sir Sandy Bruce-Lockhart, leader of Kent County Council, accused the government of cynically manipulating funding to burden councils in the South. 'The government has calculated that people in certain areas can pay higher council tax,' he told PF.
He said the new formula funding scheme introduced for 2003/04 was grossly unfair and designed to boost the economies of the northern and midlands authorities, which are receiving 25% more in funding than the Southeast.
Kent's tax rise will be 12.5%. 'It [the new formula] has created real problems for us. It is particularly distressing when the government said we were doing a good job and in the same month we have to announce 300 job losses.'
Surrey County Council, announcing a 17.9% council tax rise, said the funding formula was an 'assault by the government'. The council claimed it had lost £39m in the grant settlement – equivalent to an 11% increase in council tax. 'In the face of the government raid on resources we have set a budget to maintain these high standards,' said council leader Nick Skellet.
Several authorities point to the Area Cost Adjustment used in the new funding formula as a major factor in council tax rises. The London Borough of Croydon estimates that it has lost £11m through data changes. It is forecasting a council tax increase of 27%.
The situation in the rest of London looks grim and is exacerbated by problems over census figures and the 29% Greater London Authority precept. Barnet, one of the ten London boroughs funded at the floor, 3.5%, is predicting a council tax increase of 24%, taking its Band D rate to £1,134.61. Enfield and Kingston's Band D rates are set to increase to £1,123 and £1,221 respectively.
Neil Kinghan, director of economic and environmental policy at the Local Government Association, said grant distribution was a factor in council tax increases.
But he added: 'There are several pressures on councils this year and some will have to make difficult decisions about minimum levels of service.'
The government is likely to be extremely unhappy at some of the rises in the South. Although it has ended universal capping, it has a reserve power to question councils on large increases. Whether it will stick to its pledge not to use this power for authorities rated 'excellent' in the Comprehensive Performance Assessments remains unclear.
Council tax 2003/04: Band D and percentage rise*
London
Barnet – £1,134.61 – 24.0%
Croydon – £1,086.47 – 27.0%
Enfield – £1,122.68 – 17.6%
H&F – £1,072.89 – 13.3%
Hackney – £1,023.03 – 20.5%
Islington – £1,029.00 – 19.0%
Kingston – £1,220.76 – 15.2%
Lewisham – £1,081.55 – 13.0%
Sutton – £874.14 – 11.9%
Counties
Derbyshire – £913.68 – 8.0%
Devon – £904.02 – 18.0%
Dorset – £915.00 – 15.5%
Durham – £903.42 – 8.4%
Essex – £896.40 – 16.7%
Hertfordshire – £849.74 – 18.2%
Kent – £852.83 – 12.5%
Lancashire – £937.62 – 9.5%
Leicestershire – £847.50 – 9.3%
Lincolnshire – £740.00 – 9.6%
Northumberland – £974.00 – 12.8%
Nottinghamshire – £994.00 – 9.5%
Oxfordshire – £868.70 – 13.4%
Suffolk – £890.28 – 18.5%
Surrey – £851.24 – 17.9%
West Sussex – £859.32 – 18.5%
Wiltshire – £845.26 – 10.8%
Worcestershire – £822.00 – 13.0%
Warwickshire – £865.00 – 8.0%
Metropolitan
Birmingham – £1,079.11 – 5.2%
Bolton – £1,114.30 – 8.5%
Coventry – £1,171.68 – 4.4%
Leeds – £971.06 – 7.9%
Newcastle – £1,239.77 – 9.9%
Wigan – £1,097.85 – 8.9%
Wirral – £1,000.33 – 6.4%
Wolverhampton – £1,131.84 – 3.9%
Scottish authorities
Aberdeen – £1,020.06 – 4.0%
Dundee – £1,089.00 – 0.9%
East Lothian – £993.15 – 4.0%
Edinburgh – £1,041.00 – 4.0%
Fife – £981.00 – 4.9%
Glasgow – £1,163.00 – 1.9%
Highland – £989.00 – 5.3%
Inverclyde – £1,089.00 – 2.5%
Orkney – £900.00 – 9.2%
Renfrewshire – £988.00 – 5.0%
Shetland – £873.00 – 7.8%
* Some figures are recommendations from Cabinets awaiting full council approval
PFfeb2003
