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  • Comment
'We welcome the Audit Commission's full report as a useful and timely ...
'We welcome the Audit Commission's full report as a useful and timely

contribution to understanding why local authorities increased council tax by

an average 12.9% last year. These rises are something we are all concerned


'The Audit Commission's report should be read as a whole. It identifies a

range of contradictory factors, some of which are the responsibility of

central government and some of which are the responsibility of local

government. The Audit Commission press notice fails to reflect the balanced

picture in the full report itself.

'The government is already doing much of what the report recommends. We have

removed ring-fencing from £750m grant and provided greater transparency on

transfers and adjustments within the provisional settlement.

'I am pleased the report recognises that the government increased general

grant to local authorities in 2003/4 by a record 5.9%. In all, we have

increased funding to local authorities by 29% in real terms since 1997.

'As the report acknowledges, we have set up the balance of funding review

which is looking at the balance between money raised locally and central

government funding for local authorities.

'In addition, we have addressed some of the issues raised by last year's

last increase by: a guaranteed per pupil increase in school funding and

£300m additional funding for the provisional local government finance


'We note the report's conclusions on capping. We agree public engagement is

important but it is local authorities - not government - which set the

council tax. We have made it clear we are quite prepared to use our targeted

capping powers on excessive increases next year.

'The government fully supports the Audit Commission's recommendations for

regulators and local authorities. In particular, we endorse the commission's

view that authorities should plan effectively, look for efficiency savings,

and ensure t hey are consulting and communicating with their taxpayers.

'Finally, as the report itself says: 'There is a difference between increases

being justifiable and increases being unavoidable. Authorities have choices

about which priority growth areas they fund, what budget reductions they

agree, and the charges they raise for services. They also can feel under more

or less pressure to deliver efficiencies.''

A summary of the report is available hereand the full national report is available here.

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