Parliament Local Government: Government blamed for local tax rises

THE GOVERNMENT came under fierce attack yesterday for forcing "massive hidden tax hikes" after it emerged that council taxes in England will rise by an average 6.8 per cent.

The Liberal Democrats claimed that cuts in local government spending on health and education meant that councils had to increase their taxes from next month.

But Hilary Armstrong, the Local Government minister, accused the party of trying to shift blame from their councils to central government.

"Much of local government has moved on from the old politics of spend and blame and it seems the Liberals have not. They have become apologists for the old-style, municipal tax and spend - high taxation, low efficiency," she insisted.

She noted that the Standard Spending Assessments (SSAs), the amounts the Government believes councils need to spend to provide services, had increased by 2.6 per cent. The Government had also ended "crude and universal" council tax capping.

Whitehall sources have disclosed that the average rise will be 6.4 per cent in London, 5.3 per cent in the metropolitan authorities, 5.9 per cent in unitary councils and 7.9 per cent in shire counties.

The Liberal Democrats are likely to use the increase as ammunition for their campaign for the local elections in June.

Opening the Liberal Democrat-led Commons debate, Paul Burstow said the local government settlement amounted to a "massive backdoor increase in taxation".

"As the Government withdraws support from local spending, the council tax payer has to pay more. Labour exposed this as a scandal under the Tories and yet they continue to adopt exactly the same policy."

Mr Burstow said it was not a question of what local authorities decided to spend "because over 75 per cent of what they get to spend" was dictated by central government.

Accusing ministers of peddling "fantasy figures", Mr Burstow said the gap between what councils were spending and what the Government was funding was growing year by year and now stood at pounds 2.3bn.

The Government predicted when it set spending levels for the coming financial year that if authorities kept to their SSAs, council tax bills would rise by an average 4.5 per cent.

Mrs Armstrong stressed that 124 of England's 358 councils had set their council tax at or below their SSA increase for the coming year, and many of the others had gone only slightly above.

Ministers are considering whether those councils spending above the guidelines should have to help pay for council tax benefit paid to poorer people, which is currently met by central government.

Whitehall sources said Labour councils had a lower than average council tax rise - at 6.1 per cent compared with the 6.8 per cent national average - and Tory councils higher than average, at 7.6 per cent.