MINISTERS have laid down the gauntlet to councils by ruling that any authority seeking to impose a council tax increase of more than 3.5 per cent next year will be forced to hold a referendum.
The Government is offering councils, fire and police authorities a one-off grant if they freeze tax bills for a second successive year, but some are set to turn it down because they fear it will force them to make deeper cuts in future years.
Ministers have introduced a “local tax lock” where a referendum is automatically triggered when any council seeks to introduce a council tax increase above a level set by Parliament – and that was confirmed as 3.5 per cent yesterday.
Local Government Secretary Eric Pickles said: “Since 1997 people have seen their council tax more than double, pushing typical bills to £120 a month. We are getting to grips with this with another council tax freeze deal and by radically extending direct democracy over big bill increases with a new local tax lock.
“Councils have a moral obligation to help hard-working families and pensioners with the cost of living. If they want to hike taxes on local residents above 3.5 per cent they’ll now need to get a direct democratic mandate to do it.”
Council leaders admit it will be politically difficult not to freeze bills next year given the pressure on family budgets, although York City Council has said a tax rise next year “is of greater long-term financial benefit to the council”.
But many police authorities are poised to turn down a share of the Government’s £70m to compensate those who freeze their portion of the tax bill, claiming the move would force them to make deeper cuts in future years.