Headlines: March 3rd, 2004

Most local councils have heeded government calls for council tax rises in low single figures, according to the most comprehensive survey to date of local authorities across Great Britain. It means householders in some parts of the country will be facing their lowest increases ever but the Local Government Association has said this has been achieved at a price and has repeated calls for reform.The survey by the Chartered Institute of Public Finance and Accountancy (CIPFA) shows council tax bills in Great Britain will rise on average by 62 pounds to 1,142 pounds for a band D property.

CIPFA’s forecast has been made as local authorities set their budgets for the year ahead. It predicts a 6 per cent average rise – equivalent o 66 pounds – in England. That will be the lowest percentage increase since 1966 and compares with an average of almost 13 per cent last year. Wales is in line for its lowest ever increase since the tax was introduced with an average 5 per cent rise – 42 pounds – compared with a 9.8 per cent increase last year. In Scotland, bills are expected to go up by 4.4 per cent compared with under 4 per cent last year.

The CIPFA study shows that most local authorities have heeded the warning that councils should set increase in low single figures or face the possibility of the government using its capping powers. The results show increases across England ranging from 4.8 per cent in the North West, to 6.6 per cent in the South West, considerably lower and more tightly spread than last year’s.

But the Local Government Association said councils had worked very hard to keep tax rises down while, at the same time, facing greater pressures, including increased spending per pupil and new responsibilities in the fields of licensing and waste.

Sir Jeremy Beecham, the Association’s Chairman, said the tax had been rising year on year because successive governments had placed an unfair burden of increased public spending on the council taxpayer. The LGA had lobbied for an end to this trend, with some results, but the trend had to stop with a fundamental reform of local taxation that restored responsibility and accountability to town halls. The LGA wants radical reforms with the transfer of a proportion of national income tax to fund local government directly, either as assigned revenue developing into a local income tax, or moving straight to a local income tax system. It believes this should be combined with a fairer property tax and the restoration of local control of business rates.