Labour would curb council spending

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A Labour government would retain tough powers to limit local authority spending, under proposals to be published next month, writes Donald Macintyre.

Labour would ensure that central government has "fall-back" powers to protect business rate and council tax payers from excessive spending and will set "parameters for borrowing and spending" by councils.

The consultative document, to be published at Labour's local government conference on 4 February, will confirm the party intends to end the system of capping council spending, which it argues has actually increased spending by encouraging councils to spend to their limits.

Instead it will improve local accountability. Measures could include annual elections and emergency investigations by the Audit Commission.

The document adds: "We would need to consider what fall-back powers central government requires to enable it, in extreme circumstances, to protect council tax and business rate payers."