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By Kerry Lorimer, finance editor ...
By Kerry Lorimer, finance editor

Senior local government figures are holding high level talks with the Treasury in a bid to ensure public sector inflation is taken account of in this summer's spending review.

Officers and political group leaders from the Local Government Association are to meet chief secretary to the Treasury Paul Boateng this week to spell out the major cost pressures faced by councils.

The government is understood to be concerned that a tight spending review will make high council tax increases unavoidable. Although the average increase this year was just half that of the previous year, the government's move last month to cap councils planning high increases indicates its intent to clamp down on politically sensitive increases ahead of the next general election.

'The government is concerned about [high council tax rises], which is one of the reasons for the balance of funding review, and that is a concern we share,' said LGA chairman Sir Jeremy Beecham (Lab).

Among the pressures to be highlighted at the meeting will be increases in teachers' pay, the spiralling cost of waste disposal and employers' contributions to pension schemes.

LGA vice chair Sir Sandy Bruce Lockhart (Con) said he would be seeking assurances that the pressures on local government would be identified and fully taken into account: 'An economy in which general inflation is between 2-3% and public sector inflation is 8% is not sustainable in the long term,' he said.

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