Pickles’ levy ban challenged as councils seek transport boost

Exact figures have yet to be calculated but officials putting the plan together believe it would cost the average of 2p per day for every person in the area.

The fund, to be run by a new “combined authority” made up of council leaders, was going to be financed by a series of levies on each local authority.

However a Bill announced in last week’s Queen’s Speech would make council levies subject to the same rules as council tax rises which must be put to public votes if they are higher than two per cent.

The councils involved are now suggesting if the combined authority was given the power to charge council tax payers directly through a precept, rather than via levies on each council, it would make the process more accountable without the need for costly votes.

Leeds City Council chief executive Tom Riordan said: “We are not talking about huge increases in taxation, probably two pence per day.

“All funds are tight for people at the moment, we know that, but the impact for the area could be massive - 20,000 new jobs, £1bn every year on the economy and we think that’s worth the extra investment.”

Mr Riordan said if the levies were kept within the two per cent limit it would take 20 years, rather than the planned 10, to raise the money to fund the ambitious transport plans.

Alternatively, if they decided to raise the levies by more than two per cent annually, each authority would have to hold a referendum every year, he said.

He added: “We are in discussions and we are very hopeful that Ministers will see we are not trying to undermine the Government’s wider ambitions around the Bill that they have put in place.

“This is a separate issue for which there is a separate solution which benefits everyone.”

The Fund was part of a “city deal” agreed last year with Ministers to transfer significant powers and money in areas such as transport and skills from Whitehall to the Leeds City Region group of authorities.

Leeds City Region chairman Peter Box, leader of Wakefield Council, said Ministers at the time had “clearly accepted” council levies would be used to raise the money.

He said: “The effect on council tax is very modest and in return we are going to invest in the local transport system to reduce congestion and to help in terms of improving connections to unemployment blackspots.

“At the moment there are people who cannot get to jobs that are being created in other parts of the city region because of the lack of transport.

“We believe by working together, pooling resources and having a relatively small levy we can make a big difference.”

Local Government Secretary Eric Pickles ordered the clampdown on levies because of his concern that some councils were using them as a way of bypassing his limits on rises on council tax bills.

He has previously described bodies, such as transport authorities, which use levies on councils to raise their funding as a “secret state in our country” and “a regime of local quangos” with little public accountability.

The transport fund is one of the centrepieces of a plan for West Yorkshire councils and York to work much closer together through a ‘combined authority’.

The authority would be made up of the leaders of each council, opposition councillors and the chairman of the City Region’s local enterprise partnership.

Plans for the combined authority take a significant step forward today with the end of a public consultation. Final proposals are due to be put forward to the Government in the summer.