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LGA BACKS INCOME TAX TO PUSH FUNDING REVIEW

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By Kerry Lorimer ...
By Kerry Lorimer

The Local Government Association is poised to declare its support for local income tax, in a bid to push the government to be more radical in the balance of funding review.

The LGA listed an income-based tax as one of three preferred options in a submission to the balance of funding review, set up by local government minister Nick Raynsford to examine the way council services are funded.

Talks are now understood to be underway within the association to convince all three political groups to sign up to a common policy - which sources close to the association say is likely to involve the introduction of a local income tax, possibly alongside the council tax or an alternative property-based tax.

Sir Jeremy Beecham (Lab), chair of the LGA, said agreement on a joint position would be 'helpful', but that it was too early to say what that position would be.

'What we ought to do is see if we can agree that a mix of taxes is the best option,' he said.

'What that mix is will depend on technical work that is still to be done.'

Practical difficulties with the implementation of a local income tax include population migration and the problem of setting different rates in each council area, added Sir Jeremy.

Chris Clarke, leader of the Liberal Democrat group on the association, said there had been recognition in internal meetings that the LGA had to move from its existing 'fudgy' submission to a joint solution that members of all three groups could live with.

'Otherwise the government will be in a position of divide and rule which would suit them very well,' he said.

He drew comparisons with the government's introduction of the area cost adjustment last year after councils failed to take a common stance on the issue.

Sir Sandy Bruce-Lockhart (Con), LGA vice chair, said that although there had been talk of developing a joint position, it was 'extremely unlikely' it would focus exclusively on a local income tax.

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