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.''