By Richard Johnstone | 27 January 2012
Eric Pickles has warned local government finance officers that they risk getting involved in politics if they recommend a council tax rise in their areas.
The local government secretary today told the Local Government Association's finance conference in London that a council tax freeze was ‘the right thing’ when public sector workers face both a pay freeze and an increase in pension contributions.
The government has offered £805m to extend this year’s freeze into 2012/13. However, a number of councils have said that they could refuse the offer, equivalent to a 2.5% council tax increase, as the funding is not going to be part of the councils’ baseline funding settlement in future years.
The freeze for 2011/12 was accepted by all councils and has been included in council’s settlement for the period of the Comprehensive Spending Review up to 2014/15.
Pickles today said that ‘council finance officers and councillors need to realise that the council tax freeze is so important for families of all backgrounds and jobs’.
Addressing finance directors directly, he said they have to ‘help councils to do the right thing’.
It is a ‘ludicrous argument’ that the freeze would not be part of the base funding in future years. The ‘whole idea’ of the freeze is to get the council is to ‘get [councils’] base down’, he said.
The government has told councils that if they raise the tax by 3.5% or more then they will need to ask local people to back the decision in a referendum.
Pickles told the conference that a decision to reject the freeze cash, but increase tax below the level that would trigger a local vote, would be a ‘highly political decision’.
He added: ‘Particularly to finance officers, there is a danger here of being involved in politics, in a way. There is a referendum [trigger], and to suddenly find yourself mysteriously arriving in that place between zero and where you have to face the electorate is a highly political decision.
‘It would seem to me that councillors that take decision would be advised to move over and let the finance directors run their councils.’
Pickles also said that he is ‘pretty close’ to awarding funds from the £500m Growing Places fund, which was announced in September. He said that this funding will be provided ‘free of red tape’, and, if councils manage the cash well, would lead to much fewer conditions being placed on government funds in the future.
‘Deliver on this and the amount of strings that we will [place] on offers will evaporate,’ he said.
He added that plans for whole-place Community Budgets would be extended to all councils in future. The four pilot schemes that are currently being developed would ‘influence what happens in every area in time’, with increased local control.
