Doubts rise over how council tax freeze will be paid for

23 Jun 10
The chancellor has pledged to freeze council tax next year - but there is uncertainty about how he can do this
By Richard Staines

23 June 2010

The chancellor has pledged to freeze council tax next year – but there is uncertainty about how he can do this.

In his Budget speech, George Osborne promised help for local authorities who controlled their costs. He said the council tax freeze could be worth up to £70 a year for the average family.

Further details of how the government will fund the freeze will be announced in the Comprehensive Spending Review, due on October 20.

However, there are already concerns about the level of savings councils will need to achieve before the government gives them financial help. There are also question marks over how the policy will be funded. The Conservative Party’s election manifesto promised to freeze the tax by cutting back on government consultants and advertising.

Now council leaders and finance experts are clamouring for further details of how the freeze would be paid for.

Local Government Association chair Dame Margaret Eaton said: ‘Councils work hard to keep council tax down, and are looking to government to confirm that the proposed tax freeze is paid for from savings outside local government, such as central government marketing and consultancy.’

CIPFA chief executive Steve Freer said: ‘It seems paradoxical to introduce a scheme to incentivise the control of costs at a point when those costs are clearly going to be reducing significantly.

‘We await the details with interest. It feels as though this may have more to do with the political window dressing of the Budget rather than the rebalancing of the public finances.’

Communities and Local Government Secretary Eric Pickles said:  ‘We will make it possible for local authorities to freeze or reduce their council tax, and still protect vital local services, thanks to this Budget commitment, our reduction in Whitehall bureaucracy and new freedoms for councils to spend their money on local priorities.’

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