Government may cap council tax rise

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Government may cap council tax rise
Adam Lumley The YamYam 27 Nov 09
Government ministers are prepared to get tough with Local authorities who attempt to impose “excessive” council tax rises above 3%. Walsall’s draft budget, as well as axing front-line services, calls for a rise of 4.5%...

Minister for Local Government, Barbara Follet, warned town halls: "I expect to see the average council tax increase fall to a 16-year low next year while councils protect and improve front line services. Keeping council tax under control is a top priority for Government, which is why it will not hesitate to use its capping powers again to protect taxpayers from excessive increases.”

Walsall will receive a formula grant from central government of £137,243 million for the draft budget, part of a three year settlement that has seen Walsall collect central funding above the national average. In return for the £76.3 billion settlement, government expects all councils in England to limit council tax increases to 3%.

Walsall increase in Formula Grant

2008/9 2009/10 2010/11
Walsall 4.9% 3.5% 3.0%
Metropolitan Borough Average 3.7% 2.9% 2.5%

The 2010/11 allocation of government funding to councils in England sees a further increase of £29billion in total formula grant, an area based grant of £5.1 billion and specific ring-fenced revenue including the dedicated schools grant of £42.2billion. Barbara Follett said: “This settlement for local government has made sure councils get a 4% increase in government grant next year.”

Margaret Eaton, chairman of the Local Government Association and former Conservative leader of Bradford City Council, said: "The fact that the three year settlement for formula grant has not been changed does give councils more ability to plan ahead. “Money is tight for everyone and nobody likes paying more council tax. Town halls have already delivered the lowest council tax increase for more than a decade and are making enormous efforts to keep next year`s bills down.”

In Walsall, the Band D council tax rate of £1,477 is £239 higher than Band D in Birmingham and £39 higher than the national average. Council tax payers in Walsall pay the highest rate in the Black Country.

The draft budget will go before the council`s scrutiny committees for consultation before being presented to cabinet on 3 February 2010. The final budget will be set by full council on 22 February.

Should an increase of 4.5% be approved and government capping is triggered, Walsall Council will need to make even deeper cuts in services and raise charges elsewhere and may be forced by government to re-bill council tax payers at a lower rate.

B’ham Mail 27 Nov Council tax rise warning
Dept Communities & Local Govt 26 Nov Misisterial statement: Local Govt finance settlement PDF
Local Govt Chronicle 26 Nov Final year of settlement unscathed
Walsall Council Cabinet report 18 Nov Council Corporate financial performance 2010/11 PDF
Project Analyser Council tax comparison table
Express & Star 17 Jul Hopes for no rise on Wolverhampton council tax 2010/11
Advertiser 12 Feb Council tax up by almost 4%
Walsall Council Council Tax

Tags: Council, Tax