03 October 2008
Labour local authorities and trade unions have reacted with fury to the Conservatives' proposals to subsidise a freeze on council tax increases, warning that vulnerable people would suffer from town hall cuts.
The plans announced by shadow chancellor George Osborne mean that under the Conservatives, local authorities in England that keep council tax increases to 2.5% or below would receive a government grant worth 2.5% to fund a freeze. The money would come from cutting Whitehall spending on consultants and advertising, Osborne said.
But Sir Jeremy Beecham, leader of the Local Government Association's Labour group, attacked Osborne, saying: 'He doesn't know how he'll fund these cuts, and clearly has no interest in where the cuts will hit home. I can tell him it will hit the most vulnerable, and it won't reduce any family's bills.
'Slashing a billion pounds from council budgets will put vital programmes at risk at a time when our communities need councils to work on their side.'
Heather Wakefield, Unison's head of local government,
added: 'Freezing council taxes will lead to cuts in services that local people rely on every day. Jobs will go, and across the country local economies will suffer.'
Experts questioned how many councils would be able to take advantage of the subsidy with budgets already tight.
Institute for Fiscal Studies director Robert Chote said: 'This is an offer, not a requirement. It depends on what sort of rates of increase local authorities were thinking of.'
He noted that only 56 of 456 English local authorities had kept their 2008/09 council tax rises below 2.5%.
CIPFA chief executive Steve Freer said: 'The good news is that this moves council funding and local taxation even further up the political agenda. The bad news is that a council tax freeze is a short-term fix not a long-term strategy.
'The challenge to all political parties remains the same: to publish clear, detailed proposals for fair and sustainable funding for local government,' he added.
PFoct2008
