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Local Government - Watchdog slams Whitehall for fiddling local funding


11th December 2003

New evidence of Government to blame for soaring taxes across Huntingdonshire

Jonathan Djanogly, the Member of Parliament for the Huntingdonshire Constituency, pointed to a new report by the local government watchdog, the Audit Commission, on council tax increases. The independent survey cites burdens imposed by central government and fiddled grant distribution as the cause of soaring tax bills, rather than due to the decisions of individual councils.

Mr Djanogly said:

"The independent report confirms what local residents have suspected all along: the year-on-year council tax rises since 1997 are the fault of the Labour Government who have fiddled the system of local funding, raising taxes - but with local councillors taking the blame.

Since Labour came to power, council tax in Huntingdonshire has gone up from £579 a year on Band D bills to £1,041 now - 55 per cent. By contrast under the last Conservative administration, between 94 and 97 council tax only rose by a mere £145. It's official - Whitehall bureaucrats have rigged local funding to take resources away from good councils, forcing local authorities to increase taxes to prevent cuts in frontline public services. We demand action now to give Huntingdonshire its money back."

The report also notes that the fact that police authorities are not directly elected is a key reason for the massive rises in the police levy on council tax.

Mr Djanogly added:

"This is another reason why we should move ahead with the Conservative policy of elected police boards with full local autonomy, so local residents can have a real say on how police resources are raised and spent."

Notes:

Audit Commission Report

The report 'Council tax increases 2003-04: why were they so high?' was published by the Audit Commission on 4 December 2003.

http:www.auditcommission.gov.uk/reports/NATIONAL-REPORT.asp?CategoryID=PRESS-CENTRE&fromPRESS=NATIONAL-REPORT&ProdID=2301C12C-A495-4C17-AA67-1813C49D48EC

Burdens from central government increased local authorities' costs

"National cost pressures taken together account for about £2.3 billion of the total increase in councils' spending of £4.3 billion. In other words slightly more than half the total increase is due to national pay and price inflation, increased national insurance and general population growth" (pg 9) ... "The causes of increase spending by councils included ... national policy priorities, such as the requirement to increase funding for schools by an amount determined by government or to meet national waste recycling targets" (pg 2).

Changes in the allocation of funding hit many councils hard

"Grant redistribution - which moved grant from London and the south to the midlands and the north - led to some councils putting up council tax more than others. We found a clear association between the size of grant increase a council received and their increase in council tax." (pg 3)

It dismissed government claims that high rises last year were since councils were not up for re-election

"We could find no evidence of a statistically significant relationship between either budget or council tax increase and the length of time until the next council election." (pg 24)

There was no direct relationship between council tax increases and political control, showing that the allocation of central grant was the causal factor

"Research indicated that the differences (in tax rises and party control) were to do with the differential impact of grant redistribution and not political party. In other words, councils that received lower grant increases tended to put up council tax more than councils with higher grant increases, regardless of political party in control." (pg 25)

Police authorities had very large increases as they were not democractically accountable

"We found that increases tend to be higher in authorities that are not directly elected - 13 of the 20 highest increases in council tax were agreed by police authorities" (pg 3) ... "Police authorities are not directly elected which may make them less susceptible to public pressure to keep down their precept. They also, as precepting authorities, do not have responsibility for collecting the tax so are less directly affected by direct pressure from council taxpayers." (pg 20) "



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