disappointment at local government minister Nick Raynsford's confirmation
that the government plans to cap the budgets of six local councils - four
unitaries and two districts, plus three police and five fire authorities
Mr Raynsford left open the option of deferring capping on these authorities
pending the authorities' appeals. Even if spared the cost of rebilling
however, capping could still result in disruptive council service cuts,
hitting the two district councils named - Fenland and Shepway -
particularly hard. Such local authorities did least well out of last years'
local government finance settlement and the LGA said today's announcement
will leave some of the key services they operate such as street cleaning,
waste disposal and libraries, seriously exposed.
LGA chairman Jeremy Beecham said: 'Today's announcement is unnecessary,
does nothing to address the underlying problems within the local government
finance system, and is more likely to make them worse.
'The revival of capping is a bitter disappointment for all our member
authorities - those who have been capped could even find their funding
problems exacerbated by expensive re-billing which could cost more than£1
for every household. Some of the prospective savings are so minimal - in
Shepway's case for example just 20p a week per household - there is the
ironic twist that government intervention will end up costing tax payers far
more to get a lower tax bill.
'Ministers have reneged on their pledge that capping would only be used in
the most extreme of circumstances, which this is not. It is particularly
regrettable that amongst the authorities named are both excellent and good
rated authorities, which ministers pledged would not be affected. The
excellent-rated Telford and Wrekin for example now face capping des pite
having an overall spend lower than government guidelines and one of the
lowest council taxes in their region.
'Such a draconian intervention is simply not justified by the realities on
the ground. As the Audit Commission concluded last year, councils have acted
responsibly and have had to deal with pressures to passport increases.
Indeed increases in local government expenditure as a whole at 31% compare
favourably with central government increases at 50% (1).
'Local government faces 63 new funding pressures from central government.
Reluctant to make cuts in key services, many councils are left with no
option but to fall back on the council tax to plug any shortfalls'.
Sir Jeremy concluded: 'The councils named today will undoubtedly be making
representations to the secretary of state in the coming 21 days. The LGA
will offer any support and practical help it can to its members during the
appeals process and even at this late stage urge ministers to reconsider
capping authorities which can reasonably justify their decisions on budget
and tax levels'.
* Central government figure calculated minus social security costs and