Sir Merrick Cockell, chairman of the Local Government Association – which represents local authorities across England and Wales – said it was “inconsistent” for the Government to subject council tax rises to a local referendum, when nationally-set taxes such as VAT are not.
The measure, included in the Local Audit and Accountability Bill, will have a huge impact in West Yorkshire, where last year five councils won new powers to set up a £1 billion transport fund through a levy on council tax bills.
To implement their plan, they now face the notoriously difficult task of trying to convince local people to vote for higher taxes.
The measure has been drawn up by Communities Secretary Eric Pickles, who made clear in a speech in January that after clamping down on councils’ powers to raise taxes directly, he now has transport authorities and other similar bodies in his sights.
Attacking the “regime of local quangos” which he said “help to set council tax, but have minimal presence or public profile”, Mr Pickles pledged to take action.
“I want to open up this secret state, and ensure their council tax setting is accountable directly to the people, and their policy decisions are open and transparent,” he said.
Number Ten said the new Bill will “allow local taxpayers to veto excessive council tax rises by unelected local quangos such as transport authorities”.
Despite the Government’s public commitment to ‘localism’, however, the key decision regarding what would constitute an “excessive” tax rise each year will remain in the hands of Mr Pickles.
This year he told local authorities that a two per cent rise or more in their council tax would be “excessive”, and so trigger a local referendum.
Sir Merrick insisted it was unfair for the Government to apply different rules for council tax hikes than it does for national taxes.
“We don’t believe a centrally-imposed limit should exist at all,” he said.
“The ballot box on local election day exists for people to pass judgement on their councils.
“It is inconsistent to subject council tax increases to a referendum when other taxes are rightly judged to fall within the mandate of the elected Government.
“Nationally-set taxes such as VAT have a much greater impact on people’s income than council tax, and the public was not directly consulted over those.”