By Richard Johnstone | 1 February 2013
Local Government Secretary Eric Pickles has announced plans to alter the referendum trigger for council tax rises after warning that charges from a ‘secret state’ of unelected local bodies were adding to bills.
Pickles said the cap, which requires a local poll to be held where councils increase their own tax charges by 2% or more, was designed to increase local accountability.
However, he added, some other local bodies could also increase their levies on town halls, leading to higher council tax bills, without such ‘democratic checks and balances’.
These include waste disposal authorities, integrated transport authorities and local government pension authorities. Their levies on councils are excluded from the calculation of the rate that triggers a referendum.
Ministers will now seek to ensure these are included in the calculations.
Pickles announced: ‘The government intends to bring forward legislative proposals to increase the accountability and transparency of levy increases which are raised on billing authorities by levying bodies, and ensure there are stronger democratic checks and balances on their council tax increases.
‘We will ensure that in future, excessiveness will be determined with reference to the basic amount of council tax – that is, the Band D amount including levies.’
This will ensure that ‘unelected levying bodies do not have a disproportionate effect on council tax levels’, he added.
The decision to include the levies, likely to take effect for 2014/15 budgets, follows concerns that the current system could ‘be to the authority’s detriment if its council tax requirement includes a large proportion of levies’.
Pickles added that these increases often stemmed ‘from poor policy decisions by the unelected bodies’. For example, Manchester City Council’s plan to increase council tax from April was partly due to ‘a badly drafted, long-term Private Finance Initiative agreement signed by the Greater Manchester Waste Disposal Authority’.
Announcing the plan at New Local Government Network annual conference on Wednesday, Pickles said this was ‘a shoddy deal by a shadowy, unelected body, with no-one taking responsibility, and local taxpayers left with service cuts and higher taxes’.
Calling this ‘municipal autocracy’, he added: ‘I want to open up this secret state, and ensure their council tax setting is accountable directly to the people, and their policy decisions are open and transparent.’
• The leaders of eight city councils in England have warned that government cuts to local authorities could ‘undermine’ attempts to boost economic growth outside London.
The Cabinet of Core Cities has written to Pickles yesterday to urge him to address the ‘looming financial crisis’ in cities.
Leaders of Manchester, Nottingham, Newcastle, Birmingham, Leeds, Liverpool, Bristol and Sheffield city councils said there was evidence that the scale of funding cuts threatened the economic and reform agendas of the government.
Agreements for City Deals, along with plans for Community Budgets in some authorities, mean that cities ‘stand on the cusp of positive, lasting and fundamental change’. However, the leaders say they are ‘deeply concerned’ these efforts will be undermined by spending reductions following the Local Government Finance Settlement announced in December.
‘In the light of this further evidence, we would again urge you to meet with us all for a full conference at which we can discuss these and other solutions to the financial crisis ahead,’ the letter stated.
