Sting in the tail

ON the face of it, Eric Pickles’s offer of a council tax freeze is one for local authorities to grasp with both hands.

The Communities and Local Government Secretary and former Bradford Council leader outlined his “help for families” yesterday, claiming it was potentially worth up to £72 each year to Band D residents.

Yet as ever with Government policy, the devil is in the detail, and this £675m offer from Westminster comes with a red light health warning.

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As many of the struggling households to which Mr Pickles refers will know all too well, short-term credit offers can have painful financial consequences further down the line.

The money for the tax freeze is for one year only, meaning that any local authority taking the tempting offer of quick cash will need to find the equivalent savings the following year just to maintain the status quo. For a council like Barnsley, the freeze would be about £2m, meaning that money would need to be found in the 2013-14 financial year – on top of the multi-million pound cuts already planned.

Furthermore, council leaders have repeatedly stressed that the toughest times for local authorities are yet to come, predicting the final two years of cuts announced in the comprehensive spending review would be much harder to absorb than the first two, because the least painful cuts – early retirements, voluntary redundancies, closure of non-essential departments and underused services – have been exhausted.

The grant is optional, but it will take a courageous council leader to say to their rate payers that the bills are going up, while residents in neighbouring authorities areas enjoy a freeze.

The pressure for councils to take the offer will be immense, but the pressure they will face to balance the books afterwards will be even greater.