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Healey issues tax warning

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Local government minister John Healey gave a blunt warning last week that he would come down hard on councils failing to keep council tax under control.

Addressing the LGC/New Local Government Network (NLGN) conference on the comprehensive spending review, Mr Healey said he “would not hesitate to use” his capping powers.
In a forthright and challenging speech, Mr Healey also berated one audience member for calling for extra cash to fund partnership working and insisted the government had given the Local Government Association what it had asked for.

On council tax he said: “We will be keeping council tax under review and under control. We expect increases to be substantially below five percent and we won’t hesitate to use our capping powers.”
A spokesman for the Department for Communities & Local Government later insisted this did not mean the capping limit had been reduced and that Mr Healey was referring to average rises in council tax.
Lancashire CC councillor, Tim Ashton (Con), later asked Mr Healey to expand upon whether funding would follow councils seeking efficiency savings though joint working.

“What we can’t do is say here is a pool of funding for joint ventures,” the minister replied. “It is disappointing to hear you say if you want to consider more joint working you will need extra cash.”
NLGN director Chris Leslie, who chaired the conference, said the speech left “nobody in any doubt the government is serious about using its capping powers”.

“He was crystal clear about the government’s determination not to let council tax become a major political headache,” he said.

Mr Healey offered a ray of light in suggesting specific grants from other departments would rise by more than one percent in real terms. He also pledged to provide details of how the£2bn regeneration grant announced in the CSR would be divided between individual authorities alongside the local government finance settlement next month.

A spokesman for the LGA said: “Capping is a crude, blunt instrument which we remain opposed to. The comprehensive spending review factored in an increase of 4.2% in council tax rises. Does that count as ‘substantially below’ five percent?”

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