Latest Public Sector News

17.12.14

Lib Dems and May block Pickles’ council tax move

Communities secretary Eric Pickles has had his plans to force all councils and police authorities to hold a referendum if they want to raise council tax rise by more than 1% blocked by an alliance of the Lib Dems and Theresa May, PSE can exclusively report.

Yesterday we reported how Pickles was facing opposition to his plans, but sources have confirmed to us now that the Lib Dems have not just objected but definitively blocked the move. The threshold that local authorities can raise council tax by without holing a referendum will remain at 2%.

The same alliance of senior Lib Dems in government and home secretary May blocked Pickles earlier this year when he tried to lower the threshold to 1.5%.

May is against the move as she believes police budgets are already stretched thin and it would cost police and crime commissioners £1.1m to stage a referendum if they wished to raise the police precept by more than 1%.

Danny Alexander, Lib Dem chief secretary to the Treasury, wrote a letter to the Labour and Tory heads of the Local Government Association political groups outlining the his party’s position: “While some Conservative colleagues in the Coalition government favour leaving the cap at the level that it is, other Conservative colleagues have argued in favour of lowering the threshold to 1%. In practice, this would mean that even the smallest rise in council tax would result in local authorities having to hold a referendum.

“Lowering the threshold is a change of policy that puts an unnecessary further constraint on local authorities. While I would strongly argue for local authorities to protect taxpayers from rises in council tax, nevertheless this is a choice that should rightly be made by local authorities and not be imposed centrally.

“The Liberal Democrats have long believed in devolving power to the most local level, on the principle that the best decisions tend to be made by those closest to the people those decisions effect. It is for this reason, that the Liberal Democrats in the coalition government will not support proposals to lower the referendum threshold.

“Because of the state of the public finances, we are having to ask a lot of local authorities, who, by and large, are rising to the challenge of cutting expenditure while protecting important public services.

“Lowering the threshold will put unnecessary further pressure on local authorities and the much needed services they provide.”

Pickles believes lowering the threshold would force councils to work even harder at finding efficiency savings, as any referendum on raising council tax is likely to be defeated.

(Image: c. Anthony Devlin/PA Wire)

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