Raynsford won't stand any nonsense

By Graham Dines

Political Editor

THE Government has warned England's local authorities it will not tolerate Council Tax rises above 10%.

Nick Raynsford, the minister in charge of the financial settlement, once again threatened to invoke his capping powers should councils defy public opinion and seek excessive rises.

Mr Raynsford told MPs: "Large Council Tax increases are simply not acceptable."

He pledged to monitor "very closely" details of tax increases and step in if councils put their spending up way above inflation.

Announcing an average increase in grant to local authorities of 4.7% in the next financial year, ministers clearly expect local authorities will stick to the Treasury's estimate of an average 7% increase in Council Tax bills.

The six county councils across the East of England will receive an average 4.9% rise – the third highest in the country – but less than either the East Midlands or West Midlands.

But 13 county and unitary authorities have received no increase for any services other than education.

These are Southend-on-Sea, Milton Keynes, Poole, Rutland, Windsor & Maidenhead, the county councils of East Sussex, West Sussex and Surrey, and the London boroughs of Barnet, Bromley, Havering and Richmond.

The Government provides more than two-thirds of the money needed to run council services, such as schools, old people's homes, child care, libraries, consumer protection, highways maintenance and support for rural bus services.

"This is a good settlement for local government," Mr Raynsford insisted. "I have said many times the current trend in Council Tax rises is unsustainable. With this settlement, there really should be no need for excessive increases."

Mr Raynsford said the settlement for the next financial year would be the seventh successive annual above-inflation increase in funding for local government.

Councils will now receive 29% more in real terms than when Labour came to power in 1997, he added.

Mr Raynsford told MPs that compared with a 7% grant cut in real terms under the last four years of the Conservative government.

He also announced an additional £300million to cover the increased education costs facing councils.

Although that money will not be ring-fenced, it is on top of the £120m already announced by Education Secretary Charles Clarke to ease the pressure on local education authorities.

Although this is well short of the £800m the Local Government Association said councils needed, ministers want councils to make 0.5% efficiency savings to find the shortfall.

Chris Mole, the Labour MP for Ipswich, said he was reassured Suffolk County Council was committed to protecting critical frontline services for the vulnerable and the elderly.

He felt the Government settlement for the county was "good", but recognised Ipswich Borough Council would face a challenge after receiving an increase of less than inflation.

Richard Spring, the Conservative MP for West Suffolk, said district and borough councils faced an "unprecedented pressure" to protect services, while David Ruffley, the Conservative MP for Bury St Edmunds, called the settlement an attack on rural England.

He said Mid Suffolk District Council had received "savage" treatment at the hands of Mr Raynsford and added: "This cannot be allowed to continue – I am furious."

Bernard Jenkin, the Conservative MP for Essex North, predicted there would be "some very big tax rises" that would be above the rate of inflation.

Bob Russell, the Liberal Democrat MP for Colchester, added: "I'm concerned that the people of Colchester are suffering as the Government diverts money away from them to the North of England.

"I'm not surprised there is a lot of confusion about what council's have actually got – this tax is not transparent. The sooner we have a local income tax, the better."