» Friday, February 6, 2004

Council Tax

Asked for a reaction to a survey by the Local Government Chronicle on planned council tax rises and how seriously the Government was taking the issue, the PMOS said it went without saying that the Government took the issue very seriously indeed. Given the significant extra investment in local government, and the scope for efficiency improvements, it was the Government’s firm view that local authorities could – and should be able to – deliver council tax increases in low single figures. As he understood it, county councils had to set their budgets by 1 March, while district councils had to do so by 8 March. All councils had to submit their budgets by 11 March at the latest. The Government had indicated that it was prepared to use capping powers on any authority if it proved to be necessary. However, at this stage we were not prejudging the criteria to cap local authorities. We would wait to see the budget decisions which local authorities would reach. The PMOS also took the opportunity to point out that that central Government was investing an extra £3.7bn in support grants in 2004/5. In total, grants to local authorities had increased by 30% in real terms since 1997.

Asked if the Government would definitely use its capping powers this year, given Nick Raynsford’s acknowledgement in the House yesterday that one of the factors behind last year’s record increases was the fact that councils had not believed that we would do so, the PMOS said the Government had made it very clear that we were prepared to use capping powers if that proved to be necessary. We were certain that councils had heard that message loud and clear. We would wait and see what the figures would be next month.

Put to him that councils were planning large increases because the Government was ring-fencing too much money for education, the PMOS said we made absolutely no apology for wanting to ensure that the extra investment that was going into education actually got to schools to help children in the classroom. We believed that it should be possible to do that in a way that did not lead to council tax rises which were disproportionate. Of course, any organisation – whether Government, local council or company – had competing priorities. However, that was not, of itself, a green light to impose higher and higher taxes willy-nilly.

Briefing took place at 11:00 | Search for related news

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