07 March 2003
Authorities rated 'excellent' will not have their council tax increases capped, despite rises of up to 45%, the Office of the Deputy Prime Minister confirmed this week, with ministers apparently committed to promises of more freedoms for top councils.
But as an official survey from CIPFA revealed the highest council tax increases in England since the system was introduced 11 years ago, the spectre of two-tier capping was raised, with some poorer performing authorities likely to be in the ministerial line of fire.
According to the survey, the average Band D council tax for 2003/04 will exceed £1,000 for the first time. The highest rises will be in England, with an average increase of 12.9%, compared with 8.2% in 2002/03. Council tax bills in Wales will rise by 10% (7.4% last year) and just 4% in Scotland (previously 4.6%).
Regionally, the London boroughs will set the highest average increase, 17.9%, though this increases to 18.1% in inner London. The Association of London Government has attributed the record rises to several factors. It claims that the Greater London Authority precept at 29%, plus a poor local government financial settlement (ten boroughs were funded at the 3.5% floor), have 'led to tough decisions for the authorities'.
The Southeast authorities have an average increase of 15.8% compared with 8.6% in the Northeast. This will no doubt stoke resentment among southern councils, which have accused ministers of redistributing resources north in the settlement.
Local government minister Nick Raynsford has rejected these accusations, adding that he is minded to use his 'reserve powers' to cap councils that had set 'outrageous amounts'. But a spokeswoman for the ODPM told Public Finance this week that ministers will stick with their pledge not to cap councils rated 'excellent' under the Comprehensive Performance Assessment. 'It is not fixed by law but it is a commitment and ministers will stand by that commitment,' she added.
This means that Wandsworth, with an increase of 45%, Westminster at 28%, Bexley at 17.5% and Kensington & Chelsea at 17.4% will escape the cap.
However, lower-performing authorities – particularly the London boroughs of Hackney (20.5%) and Lambeth (22.8%), which are both classified as 'poor' – might not be so fortunate.
PFmar2003
