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COUNCIL TAX: AUDIT EVIDENCE SUPPORTS OUR CALL FOR OVERHAUL

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With council taxes set to rise above inflation for another year, an overhaul ...
With council taxes set to rise above inflation for another year, an overhaul

of the system is urgent, the Local Government Association said today.

The LGA was responding to an Audit Commission's report out today, analysing

the cause of council tax increases this year.* The report lends substantial

weight to the LGA's argument that council tax needs reform.

The commission's review concluded that there are 'fundamental problems with

the way council tax operates', that the system is 'too complex for local

citizens to understand' and that local government minister Nick Raynsford

needs to address 'fundamental flaws in the local tax system' so councils can

'fully engage citizens in key decisions that affect their lives'.

Jeremy Beecham, LGA chair, said: 'The evidence speaks for itself. This

report nails on the head any belief that councils have been frivolous,

careless or politically motivated when taking hard decisions on council tax

and spending on vital services.

'The Audit Commission found no connection between the political control of a

council, and its decision on council tax levels - instead a very clear

connection is drawn between government grant levels, additional pressures

and the level of council tax increases. Neither did the timing of local

elections have any bearing on council tax decision, contrary to popular

belief.'

'In fact, the report found that councils have been using up their balances

in an effort to keep council tax down. These are the actions of responsible

councils looking to lessen the burden on council tax payers while protecting

services to those most in need. Obviously however, using up dwindling

balances is as equally unsustainable as above-inflation council tax rises.

'The Commission agrees with our belief that the current system is too

complex, lacks proper accountability and is therefore ripe for reform

'The answer lies in the balance of funding review which the L GA is sitting

on with local government minister Nick Raynsford. Our goal is a fairer

local taxation system that gives more responsibility to the local council

for spending decisions.

'We must throw away prejudice and examine all the options with an open mind

- whether that is a reformed property tax, elements of local income tax, a

return of business rates to local control or a combination of these

measures.

'I believe we can produce a system of local government funding that

reinvigorates local democracy and further improves the quality of services.'

* Summary/ National Report

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