Addressing a joint LGC/New Local Government Network conference on the comprehensive spending review, Mr Healey said he “would not hesitate to use” his capping powers.
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.
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”.
Mr Healey also:
Offered a chink of light by suggesting specific grants from other departments would rise by more than one percent in real terms
Pledged to provide specific details of how the£2bn regeneration grant announced in the CSR would be divided between individual councils alongside the local government finance settlement next month