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Council tax to increase four times inflation rate
Daily Telegraph - 2 March
2004
By Andrew Sparrow Political Correspondent
A ROW erupted yesterday after an authoritative survey showed average
council tax bills will rise by more than four times the rate of inflation.
Nick Raynsford, the local government minister, claimed that the projected
5.7 per cent average increase across Britain was a big improvement on
last year, when the average was 12 per cent.
But the Tories pointed out that councils were ignoring Mr Raynsford's
plea to keep increases within "low single figures" - interpreted
as not more than five per cent - and that the rises were well above inflation.
According to a survey by the Chartered Institute of Public Finance and
Accountancy (CIPFA), the average council tax in Britain for a band D property
in 2004-05 will be pounds 1,142, up 5.7 per cent on the previous year.
It said this was the lowest percentage increase in nine years.
English council tax payers will be charged an average pounds 1,168, an
increase of six per cent. The Scottish figure is pounds 1,053 (or 4.4
per cent) and the Welsh equivalent is pounds 879 (or five per cent).
According to the consumer prices index, the Government's new preferred
measure, inflation is running at just 1.4 per cent. Even using the old
measure, RPIX, inflation is only 2.4 per cent.
With some pensioners threatening to go to jail rather than pay their bills
for 2003-04, the Government was desperate to keep this year's increases
to a minimum.
Mr Raynsford has spent the past few weeks lobbying councils, and reminding
them that he will use his capping powers to block excessive increases,
and yesterday he claimed that his strategy had been largely successful.
In a briefing to coincide with the release of the CIPFA figures, he said:
"There is no need for excessive council tax rises and I hope that
the actual average will come down as authorities finalise their figures.
I am encouraged by the evidence that many councils have listened to our
exhortations to lower their council tax increases. Six per cent is less
than half last year's rise."
Mr Raynsford said it was "likely" that some authorities would
be capped. He would not identify potential targets, but he singled out
for particular criticism Shepway, a Liberal Democrat council in Kent apparently
proposing a 39 per cent increase.
The minister pointed out that councils had until March 11 to finalise
their budgets and he stressed that there was still time for authorities
to cut their spending plans.
Claiming that Labour authorities had a better record, Mr Raynsford said
that his department's figures suggested that Labour council tax rises
would average 4.8 per cent, Conservative rises 5.5 per cent and Liberal
Democrat rises 6.2 per cent.
He denied that this was because the Government was more generous to Labour
authorities. Tory councils were receiving an average 6.1 per cent increase
in government funding, while Labour authorities were getting 5.9 per cent,
he said.
David Curry, the shadow secretary of state for local and devolved government,
said: "After all the huffing and puffing we have seen from Labour
- councils threatened by letter and in person with capping - we still
see council tax increases of over three times inflation.
"The Government cannot escape the charge that it has placed massive
burdens on councils and fiddled the funding. In these circumstances, councils
have been left with no choice but to either cut services or go to the
council tax payer for more money."
According to CIPFA, which conducted its survey on behalf of Radio 4's
Today programme, the increase in England is the lowest since 1996. The
rise in Wales is the lowest since the council tax was introduced.
Full details of the survey are available on www.cipfastats.net
© Daily Telegraph
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