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Councils defy No 10 to raise tax by double the rate of inflation
Daily Telegraph - 7 February
2004
By George Jones Political Editor
MOST local authorities are preparing to defy the Government
by setting council tax rises more than twice the rate of inflation.The
indications that councils will ignore Government calls to keep increases
to "low single figures" brought a new warning from Downing Street
yesterday that ministers were prepared to use their powers to "cap"
excessive rises. Nick Raynsford, the local government minister, has written
to 56 local authorities threatening to cap rises of more than five per
cent. But his warning has had little impact.
A survey by the Local Government Chronicle has found that
75 per cent of unitary councils and 70 per cent of counties plan to increase
council tax by more than five per cent.
The Prime Minister's official spokesman said the Government
was ready to use its "capping" powers if councils failed to
keep the increases to "low single figures".
The spokesman refused to be drawn on the exact figure which
would trigger the cap but said ministers were determined to prevent "disproportionate"
increases.
"The Government has made it very clear that we are prepared
to use capping powers if that proves to be necessary," he said.
"Given the significant extra investment in local government
and the scope for efficiency improvements, it is the Government's firm
view that local authorities should be able to deliver council tax increases
in low single figures."
In the Commons on Thursday, Mr Raynsford admitted that an assumption by
councils that the Government would not use capping powers was probably
one of the contributory factors to last year's "unreasonably large"
increases.
But with growing protests, particularly from pensioners, about
the record rises in council tax, ministers are determined to get the message
across they are ready to step in to curb excessive increases this year.
Councils must set their budgets by next month but Chris Dando,
finance manager for planning at SouthGloucestershire Council, told the
Local Government Chronicle that members would consider a judicial review
if the council was capped.
David Curry, Conservative local government spokesman, blamed
the Government for the current "crisis" over council tax.
He accused Labour of "rigging" the distribution
of central funding for local authorities to ensure its councils got more.
Mr Curry said ministers had tried to intimidate councillors
by threatening to cap council tax rises but were panicked into a 7.3 per
cent increase in central funding last month to head off double-digit rises.
He told the Conservative Councillors' Association conference:
"The Government handling of local government finance over the past
12 months has been characterised by incompetence, confusion, panic and
intimidation."
Incompetence because, he said, of a rigged formula designed to push money
into Labour metropolitan areas, confusion over education funding, panic
by prescribing school funding from Whitehall and intimidation to bludgeon
councils into "low single figure" increases.
Mr Curry said the Government's letter writing campaign to
local authorities "suggests that even its ministers have scant faith
that the settlement will stand up as reasonable in its own right".
© Daily Telegraph
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