Fury as government caps tax rises of nine district councils

24 Mar 05
Government promises of a radical shift towards local accountability rang hollow this week after Nick Raynsford moved to cap nine authorities deemed to have set excessive council tax increases.

25 March 2005

Government promises of a radical shift towards local accountability rang hollow this week after Nick Raynsford moved to cap nine authorities deemed to have set excessive council tax increases.

The local government minister designated the authorities, which are all districts and all but one Conservative-led, for in-year capping on March 23.

Just the day before, Raynsford had launched a discussion document that heralded a shift away from central inspection of authorities towards a performance framework focusing on users' experiences.

Sir Sandy Bruce-Lockhart, chair of the Local Government Association, vented his fury at the swiftly executed U-turn. 'It makes an absolute mockery of decentralisation and localism,' he told Public Finance. 'All the talk from government in recent months has been around greater autonomy for councils, then we have this highly irresponsible and retrograde step. It is outrageous and the LGA is totally opposed to it.'

The Tory councils in the firing line are: Aylesbury Vale in Buckinghamshire, proposing a 9.2% increase; Daventry in Northamptonshire, 30.6%; Hambleton in North Yorkshire, 17.6%; Huntingdonshire in Cambridgeshire, 12.7%; Mid Bedfordshire, 13.3%; North Dorset, 23.3%; Runnymede in Surrey, 17.5%; and Sedgemoor in Somerset, 12.3%.

South Cambridgeshire, which is proposing the largest council tax rise at 100%, is run by a coalition of Tories, Liberal Democrats and independents. The authorities have 21 days to appeal against the capping decision.

The LGA is particularly incensed because, although the proposed percentage increases are high, all the councils have below-average tax levels and the monetary increases would be low.

South Cambridgeshire, which wants to raise its council tax from £70 per year to £140 for Band D, would still be below the average district council bill of £143 for 2005/06. Hambleton's proposed rise would see its bill increase from £68 to £80.

'The councils capped are low tax and low spend, but perversely are now potentially facing tens of thousands of pounds of re-billing costs for increases as little as just over 8p per household per week,' Bruce-Lockhart said.

But Raynsford, who announced the capping decisions to the House of Commons, was unmoved. He told MPs that the average Band D council tax increase in England for 2005/06 was 4.1%, the lowest for more than a decade.

He had therefore resolved to cap any authority whose budget had increased by more than 6% on last year and whose tax had risen by more than 5.5% over the same period.

'We would, of course, have preferred not to use our capping powers. However, we also have a duty to protect council taxpayers from excessive increases and we will continue to do so,' he added.

Mid-Bedfordshire leader Tricia Turner summed up the mood among the nine authorities when she said: 'The government is simply playing politics in the run-up to the general election. It is questionable whether such action would have been taken had all the low-spending councils caught by this arbitrary and inequitable capping trap not been Conservative-controlled councils.'

Twenty-four hours earlier, Raynsford had launched Securing better outcomes, the fourth discussion document to be released as part of the ten-year vision for local government.

It proposes combining a few key national priorities with a 'devolved performance management system', based on locally gathered data and stronger accountability mechanisms for service users.

'We recognise that a more devolved and flexible approach will better secure the desired outcomes than central government targets, standards and priorities alone,' Raynsford said.

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