Sunday, October 14, 2007

Council Tax to rise again

GORDON Henderson says that he is “absolutely horrified” that residents of Swale face inflation-busting hikes in council tax, following the publication of the Government’s new tax and spending plans for the next three years – the so-called “Comprehensive Spending Review”.

Gordon’s comments follow news that: -

· The cross-party Local Government Association has forecast that “the Chancellor's announcement will mean above inflation rises in bills for council taxpayers”.
· Insufficient resources have been given to local authorities to tackle the soaring costs of care for the elderly, waste collection and disposal, and other burdens imposed by Whitehall.
· Independent commentators have said that the Government’s claim that council tax bills will be kept down “do not look plausible”.
· The small print of the Government’s report reveals that council tax revenues are forecast to rise by 5 per cent this year. Assuming council tax rises of 5 per cent every year over the three years of the Spending Review, this would push the average council tax bill in Swale to £1508 on Band D. Under the Labour Government, bills have already soared across the country, and have increased bills by 112% across Swale.

Gordon remarked,
‘Thanks to Labour’s fiddled funding, council tax has gone through the roof across the country. Since 1997, council taxes in Swale have already rocketed by 112%. Now I fear that Gordon Brown is engineering three more years of inflation-busting hikes. I am absolutely horrified that rises will be imposed on our residents, because those increases will hit hardest the most vulnerable in Swale – particularly pensioners on fixed incomes.

‘This is yet another tax con from a tired Government that has run out of ideas. Using council tax to raise more money is the most dishonest tax hike of them all – engineered by Whitehall but with local councillors taking the blame when bills hit the doormat.’

Notes to Editors


The small print of the Government’s Pre-Budget Report and Comprehensive Spending Review reveals that council tax revenues are forecast to soar this year by £1.2 billion, from £23.7 billion in 2007-08 to £24.9 billion in 2008-09. This is an inflation-busting rise of 5.1 per cent; only a tiny proportion of this change is due to the increase in the size of ‘tax base’ from population change (HM Treasury, 2007 Pre-Budget Report and Comprehensive Spending Review, October 2007, p.168, table B8).

In their response to Labour’s Pre-Budget Report, the cross-party Local Government Association has warned: “This is the worst settlement for local government in a decade. Councils will continue to work hard for the people they serve but they face tough choices. The Chancellor's announcement will mean above inflation rises in bills for council taxpayers and businesses, and there remains a black hole in funding for the care of the elderly. The money allocated to local government is simply not enough for councils to provide everything ministers have promised and meet the extra cost of looking after an ageing population which will cost £9m every single day. Even though this is a real terms increase in grant we estimate there will be a shortfall overall. The council taxpayer will once again be left to pick up the bill for promises made by the Government” (LGA Press Release, 10 October 2007).

Leading commentator, Peter Riddell of The Times, has added: “Council tax, not inheritance tax, is what the Autumn Budget will be remembered for in the long term... Whitehall funding for councils will increase by an average of 1 per cent in real terms in the three years from next April: 1.5 per cent in the first year, then 0.8 and 0.7 per cent. The Government claims that this should be sufficient to ensure improved services, enabling local government to keep council tax rises low, with ‘an overall increase of well under 5 per cent in each of the next three years’. This is well above the forecast 2 per cent annual growth in consumer prices over the period. These figures do not look plausible. Local authorities complain that the Whitehall grant is not enough to provide new services promised by central government” (The Times, 11 October 2007).

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