Household council tax bills will increase by an average half a per cent next financial year as a handful of councils and just over half of all police authorities plan to defy the government’s wish for a second year of freezes.
Grant Shapps, local government minister, attacked the councils – including Conservative-run Cambridgeshire, Surrey and Huntingdonshire – branding them “democracy dodgers” for raising bills but keeping increases shy of the 3.5 per cent that would trigger a local referendum under the Localism Act passed last year.
Mr Shapps’ outburst came in response to a survey by the Chartered Institute of Public Finance and Accountancy showing one in 12 councils had decided to increase their council tax rates from April.
Councils were this year offered an extra government grant equivalent to a 2.5 per cent increase in council tax if they opted to freeze the charge. However, the grant is for one year only, leaving councils needing to make larger council tax increases in future years to recoup the loss to their revenues.
Councillor David Hodge, Conservative leader of Surrey County Council, which will put council tax up by 3 per cent, said a freeze this year would have left a £70m “black hole” in the council’s finances by 2017 – equivalent, he claimed, to its road budget.
He told the FT that while council tax freezes were “right for some” areas, they were not right for Surrey. The council was already very efficient and had opted to invest more in its roads and services for young people.
“I wouldn’t put us down as democracy dodgers,” Mr Hodge said. “We know our books best. We’ve already asked the secretary of state and other ministers if they would like to come down to Surrey. We would be delighted to welcome anyone who comes and looks at our books.”
Although only a few councils have decided to increase their direct element of the charge, average council tax bills will rise by half a per cent across England and Wales and by just over 1 per cent in the north-east. A significant part of that across-the-board increase is because of the decision of at least half of police authorities to raise their precept to the charge by as much as 4 and 5 per cent.
Councillor Mark Burns-Williamson, chair of the Association of Police Authorities, said such increases were made in response to the cut in the central government grant to police authorities which left them “facing a stark choice to either risk further cuts in the future or else raise the …precept”.
“These decisions are never taken lightly but public protection is a basic right; not an optional extra. The one-off nature of the government’s freeze grant has meant difficult decisions have had to be made to protect the public,” he added.
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