Council tax rise 'good news for government'
Wednesday, 28 Feb 2007 12:30
Town halls are behaving themselves while central government remains firm on council tax
Britain's average council tax bill will increase by 4.2 per cent during 2007-8, the Chartered Institute of Public Finance and Accountancy (CIPFA) has said.
Its forecast, based on a survey of almost two-thirds of English and Welsh local authorities' band D tax levels, is the second-lowest rise since 1994-5 but remains significantly above the government's preferred rate of inflation, currently at 2.7 per cent.
Steve Freer, CIPFA chief executive, said the predicted fall from last year's 4.5 per cent growth was "positive news" as it meant central and local governments were not clashing on spending priorities.
"There is little doubt that the threat of capping if tax increases exceed five per cent has concentrated minds," he said.
"Councils simply do not want to set a collision course with government with all of the uncertainty and risk which that involves."
Only two local authorities exceeded the government's stated five per cent increase, the study, commissioned by the Today programme, said. This follows clear signals from ministers who have said they will not hesitate to use capping to prevent council tax spending running out of control.
Liberal Democrat local government spokesperson Andrew Stunnell used the survey to reiterate his party's support for the abolition of council tax as the principal means of fundraising for local authorities.
"These figures highlight the totally unfair burden council tax places on pensioners and the low paid," he said.
"More people will be added to the two million people already struggling to pay their council tax bills. It is essential the government abandons the unjust council tax."