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CAPPING THREATS FLY OVER TAX HIKE PLANS

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By Kerry Lorimer, finance editor...
By Kerry Lorimer, finance editor

The government has threatened to cap the budgets of 11 local authorities unless they back down on planned council tax hikes.

The Greater London Authority, Hertfordshire CC, Hartlepool BC, Bromley LBC and Barnsley MBC have been warned they risk being capped if they press ahead with increases of above 5%. Six districts have also received letters warning they are within the government's sights.

Seven of the 11 are Conservative controlled.

The Office of the Deputy Prime Minister said it took action after 'press reports or any kind of intelligence' indicated the authorities were planning 'excessive' increases.

However despite the threats, the likelihood of any high-profile authority being capped appears to be diminishing.

London mayor Ken Livingstone has already said he will scale down his planned precept increase of 7.2%, a rise which led the London Assembly to block his budget.

Hartlepool has lowered its planned increase from 5.9% to 4.9% on the back of the additional£300,000 it received in last week's final finance settlement. Insiders say Hertfordshire's increase will be 'nowhere near' the 7.3% it had been discussing at the end of last year, and would almost certainly be kept under 5%.

Sarah Wood, director of economic and environmental policy at the Local Government Association, said the selection had been made without proper evidence of each council's planned increase.

'This approach is contrary to what the government expects of local authorities,' she said.

'Smaller authorities like districts are at the bottom of the pile in terms of the tax they levy, so a 'whacking' 10% increase might amount to 10 quid,' she said.

Kerry.lorimer@emap.com

Capping hitlist

-- Aylesbury Vale DC - Con

-- Barnsley MBC - Lab

-- Bromley LBC - Con

-- Dover DC - NOC

-- East Devon DC - Con

-- Greater London Authority

-- Hartlepool BC - Lab

-- Hertfordshire CC - Con

-- Hyndburn BC - Con

-- South Buckinghamshire DC - Con

-- West Lancashire DC - Con

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