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CAPPING: FRUSTRATION AND DISAPPOINTMENT OVER GOVERNMENT ANNOUNCEMENT

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Local Government Association leaders have reacted with frustration and ...
Local Government Association leaders have reacted with frustration and

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

(see LGCnet).

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

defence.

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