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16.12.14

Pickles faces opposition over referendums on 1% council tax rises

Communities secretary Eric Pickles wants to force all councils and police authorities to hold a referendum if they want to raise council tax rise more than 1%, but his idea is opposed by the home secretary and Lib Dems.

Pickles is planning to announce the lower threshold for 2015-16 tomorrow (Wednesday), as part of the local government finance settlement. Currently councils can raise council tax by up to 2% without being required to stage a referendum.

The new threshold would leave councils facing real-terms cuts in their budgets due to inflation.

However Theresa May is against the move, warning that 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%.

The home secretary has an unlikely ally in the Lib Dems. 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. Alexander wrote: “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 implementing efficiencies as any referendum on raising council tax is likely to be defeated. He previously wanted to cut the referendum trigger to 1.5% for 2014-15 but pulled back.

(Image: Eric Pickles. c. DCLG)

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