Town halls warned over tax rises

Conservative Minister Brandon Lewis warned councillors across England currently preparing their budgets for the next financial year to “think of what is best” for local residents who saw their council tax bills double under the last Labour Government.

The coalition has again called for every council to freeze bills in 2014, and capped the amount any authority can raise tax without a referendum at two per cent.

But yesterday Yorkshire’s largest local authority, Leeds Council, announced it will join the fast-growing number of town halls which insist they can no longer afford to maintain a bill freeze in the face of the biggest squeeze on budgets in living memory.

Council leader Keith Wakefield said the decision to raise rates by two per cent next year after a three-year freeze was essential as the authority contemplates compulsory redundancies and sweeping cuts to frontline services.

“This is a dire situation,” Coun Wakefield said. “We’ve reached the point where we have to start thinking the unthinkable.”

Many of the region’s other large Labour councils – including Wakefield, Kirklees, Calderdale, Hull and York – look certain to follow suit, having already broken the freeze this year. Bradford has announced a 1.6 per cent rise.

Most damagingly for the Government, North Yorkshire County Council last week became the region’s first Conservative-led authority to break ranks with the coalition and announce its own plans to hike council tax by the maximum two per cent level.

But, appearing before the Commons Local Government Committee, Mr Lewis insisted town halls were wrong to be considering any increases at all.

He said the Government’s offer of a grant, equivalent to a one per cent increase in council tax, to any authority which freezes rates means the extra money available through hiking bills by up to two per cent is negligible.

“I would like to think the local authorities, particularly the councillors, will look at that and take a view on what is right for local residents,” Mr Lewis said. “They had council tax double under the last Government – we’re proud to have kept that down.

“What I’ve said to local authorities (which are considering raising council tax) is, bearing in mind there is a one per cent offer from central Government if you freeze, actually what your officers are saying is they want to put up council tax for a benefit of 0.9 per cent.

“If they’re doing it for 0.9 per cent, then actually I think (councillors) should be asking their officers to look at that again.”

Mr Lewis also defended the Government’s ongoing programme of unprecedented funding cuts, and disputed a series of reports over recent weeks from bodies including the Government’s own Audit Commission and the York-based Joseph Rowntree Trust, which concluded councils in the North have been hit harder than those in the wealthier South East.

“I haven’t seen it broken down in that particular way,” Mr Lewis claimed. “We made sure we had a settlement that’s fair across all types of authority – rural, urban, North, South.”

The Minister repeatedly refused to reveal how large the cuts to council grants have actually been, insisting the Government’s preferred measure of publishing only each authority’s overall ‘spending power’ was “more useful”.

As Labour MPs accused him of obfuscation, Mr Lewis insisted: “I think funding has been fairly changed overall.”

Comment: Page 14.