Fewer services, more tax

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Fewer services, more tax

Councils up and down the country are set to raise council tax by more than double the rate inflation, a new survey has revealed.

Half of those questioned added that they were also planning cuts to services in order to balance their budgets.

Figures produced by the Local Government Chronicle yesterday showed that more than three-quarters of unitary councils and 70 per cent of counties plan to increase council tax by over five per cent.

On the back of last year's protests, the Labour Party has threatened to limit the amount councils can raise their tax if they consider hikes 'excessive', but have remained tight lipped on what this means.

local government minister Nick Raynsford has written directly to the 56 councils he believes are considering high increases to warn them that they are in line for 'capping'. But councils do not appear to be listening.

The LGC survey points out that almost 80 per cent of unitaries are considering increases above five per cent, with many predicting double-digit rises.

Councils have claimed that the increases are down to the way they are funded by central government.

The bulk of their money comes, not from locally raised taxes, but from a central government grant. However large amounts of this money are 'ring fenced' for specific services, or 'passported' directly to schools.

This has left some councils with little or no money free to meet wage increases of teachers and other staff, as well as increasing pension requirements.

Chris Dando, finance manager for planning at South Gloucestershire Council, said members would consider a judicial review if the council were capped.

"If we'd had our full entitlement under the government's own formula, our council tax increase would have been around two per cent," he said.

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