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One council in ten to reject tax freeze offer

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About a tenth of councils look set to increase council tax next year after a survey of finance officers added to LGC research into the number of authorities planning to accept the government’s freeze grant.

The Chartered Institute of Public Finance & Accountancy’s annual council tax survey, based on actual budget proposals from just over two-thirds of councils, found that 8.4% of council respondents were planning to ignore government pressure for a council tax freeze.

The Cipfa survey, completed by 239 councils, found 20 planning to increase council tax. With 14 other councils also known to be planning to increase tax levels next year, the running tally of those planning a rise now stands at 34 - some 9.7% of all English councils.

The survey found the average increase in council tax for a band D property will be 0.3%, or £4.46 in 2012-13.

The findings also back up LGC’s survey from November, which indicated councils in the north-east would be most likely to increase tax levels and those in London the least likely. Tax levels are set to rise 0.9% in the north-east but fall by 0.3% in the capital.

Almost half of police authorities are planning to increase their precept, while 30% of fire authorities are planning to do so.

Councils declining the freeze grant have largely done so because the one-year nature of the funding means either extra savings and cuts or larger tax increases next year.

But at the beginning of the week the Department for Communities & Local Government published a list of 269 councils intending to accept the freeze funding grant, which is equivalent to a 2.5% increase for one year.

Ministerial calls via local papers for residents to lobby their councillors and personal letters to leaders have worked in some areas with a number of councils reconsidering their initial plans for a rise.

Most recently Labour-run Chesterfield BC and Conservative-run North Dorset DC reconsidered their plans for a 3.5% and 3.49% increase, following on the footsteps of similar rethinks by Taunton Deane BC and Scarborough BC.

Brighton & Hove City Council, one of the first councils to announce plans to increase reject the government’s freeze grant, has also had to drop its plans for a 3.5% increase after the ruling minority Green party failed to get the support of other parties.

Local government minister Grant Shapps said: “This survey confirms that council tax will be frozen again this year for most households, with an average change across England of just a mere 0.3% - which is a significant tax cut in real terms.

“The tiny minority of local authorities who have increased bills are democracy dodgers – none of them have dared put the increase to the people in a referendum – this speaks volumes.”

Council Tax Watch

In November 2011, as the problematic nature of the government’s one-off funding became clear, LGC surveyed councils to find out whether they intended to take the freeze grant for 2012-13. At that point, five months before budgets had to be set, 20% of respondents said they were considering rejecting it, including 4% who said they would do so.

As councils began to set and consult on their budgets, LGC has kept an online tally of councils proposing to increase council tax. This currently indicates that about 10% of councils will reject the grant.

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Readers' comments (1)

  • Shapps could settle the matter at a stroke by agreeing to consolidate the freeze subsidy into the base grant settlement. No wonder many councils do not trust the coalition.

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