| Published | 27 March 2008 |
|---|
Eleven successive years of above inflation grant increases from Government - and a continued threat of tough action against excessive increases - have led to the lowest increase in council tax for 14 years, and the second lowest ever, Local Government Minister John Healey has announced.
Figures for 2008/2009 published today show that the average Band D increase in England will be 4.0 per cent. 265 (58 per cent) authorities will have increases below the 4.1 per cent Retail Price Index, 69 (15 per cent) below the 2.5 per cent Consumer Price Index, 18 (4 per cent) have no increase and three (0.66 per cent) are reducing council tax bills.
Ministers have said consistently that they expect the average council tax rises to be substantially below 5 per cent and the vast majority of local authorities have complied.
However Mr Healey has also announced today that eight authorities have been "designated" and now have 21 days in which to make their case to government. These authorities are Lincolnshire, Cheshire, Leicestershire, Warwickshire, Surrey, Bedfordshire and Norfolk Police Authorities, and Portsmouth City Council.
John Healey MP said:
"We have delivered the first ever three year financial settlement for local government, and are moving over £5bn into budgets with no spending strings attached placing financial decisions increasingly in their own hands, and the vast majority have responded well.
"Our commitment to take action combined with our 45 per cent above inflation increase in Government grant for local services up to 2010-2011 has helped bring down council tax rises to a fourteen year low, and most councils have contained their costs and budgeted prudently.
"But eight authorities are outside the principles I have announced today. That is why I am today designating these authorities and inviting them to discuss their individual cases with me before taking final decisions."
The Minister announced that authorities' 2008-2009 budget requirements are excessive if they set a budget requirement increase of 5.0 per cent between 2007-2008 and 2008-2009, and a council tax increase of more than 5.0 per cent in the same period. Authorities must exceed both principles to be designated for action.
All of the authorities designated for action have 21 days in which to make their case. The Government will carefully consider any representations made before taking further decisions.
1. Council Tax and budget increase for the eight designated authorities:
| Local Authority | 08/09 Own Band D council tax (£) | % increase in council tax 07/08 to 08/09 | % increase in budget requirement 07/08 to 08/09 |
| Bedfordshire Police | 135.28 | 9.6% | 5.3% |
| Cheshire Police | 135.75 | 17.0% | 6.8% |
| Leicestershire Police | 160.40 | 15.4% | 6.5% |
| Lincolnshire Police | 235.35 | 78.9% | 29.0% |
| Norfolk Police | 178.56 | 8.3% | 5.3% |
| Portsmouth UA | 1,094.94 | 5.04% | 6.1% |
| Surrey Police | 187.92 | 9.7% | 6.0% |
| Warwickshire Police | 164.68 | 12.9% | 6.7% |
2. Authorities which have been 'designated' now have a statutory period of 21 days in which to respond. The Government will then consider in the light of their responses whether to, for each authority:
3. Unless a designated authority accept the maximum budget proposed by the Secretary of State for 2008-2009, any maximum budget ('cap') set by the Secretary of State is subject to approval of an order by the House of Commons. We would expect this to happen before the Summer Recess in July. Subject to approval of the House, affected authorities would then need to re-bill their council tax payers for a lower council tax in 2008-2009.
4. Information on council tax increases for all authorities is available on the Communities and Local Government website at:
www.local.communities.gov.uk/finance/ctax/ctax089.htm (external link).
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