06 April 2007
Ministers backed away from punishing breaches of the cap on council tax rises this year because they did not believe that increases above 5% were excessive.
The Department for Communities and Local Government has confirmed that, although 35 authorities breached the 5% cap, none would be asked to revise their bills this year because average increases were just 4.2%.
Phil Woolas, the local government minister, said: 'We had made it clear to authorities that we expected to see an average council tax increase of less than 5% and I am pleased that, overall, local government has responded in a positive manner.'
But Woolas's decision not to intervene at the 35 authorities contrasted with previous years, when ministers reversed some local tax decisions in spite of moderate average increases.
Some town hall officials had anticipated revisions to their bills after the DCLG insisted it would not abolish its capping powers following a recommendation in Sir Michael Lyons' report on the future of local government.
Lyons called for capping powers to be ditched in the 'short term', but Woolas dismissed the proposal within hours of the report's publication last month.
One senior Whitehall source cast further light on the DCLG's final decision, announced on March 29. 'Ministers and officials felt that none of the 35 authorities that levied rises above 5% this year was deemed to have raised [council tax] by a level sufficient to require intervention.'
Sir Jeremy Beecham, the vice-chair of the Local Government Association, said: 'Town halls have made a monumental effort to keep rises down for the council tax payer, with average rises below the Retail Price Index. It's good news that councils won't be capped this year. They are… facing significant pressures.'
The 35 authorities with increases above 5% included several major police authorities, which do not levy bills directly. Many councils that breached the 5% cap often did so as a result of large increases in their police precept.
Darlington Borough Council, for example, raised its part of the council tax by 3.9%, but the local police authority hiked its precept by 34.6%, which pushed Darlington's overall increase to 6.5%.
PFapr2007
