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Council tax set to rise by over £60 a year
Pippa Crerar, Political Correspondent6 Dec 2007
Householders across London face inflation-busting council tax rises of more than £60 a year.
Town hall chiefs today warned that the Government's latest funding settlement for the capital would lead to tough choices between putting up tax or cutting vital services.
They said the financial package, which will see London councils getting lower funding increases than the rest of the country, would be "devastating" for the capital.
Local government experts said many boroughs would opt to push up council tax by as much as five per cent - more than twice the rate of inflation. A Tory analysis suggests the average band D council tax bill in the capital could soar as high as £1,456 a year as a result.
Local Government minister John Healey admitted it was a "tight settlement" but said councils were still getting real-terms increases.
He warned town halls that unless they kept council tax rises " substantially" below five per cent the Government would "not hesitate" to use its capping powers.
"There's no reason, given the continuing above-inflation increase in grants to local authorities, given the three-year settlement that gives them the certainty, that council tax rises should be excessive this year," he said.
However, most of the capital's 33 boroughs are expected to receive the minimum two per cent rise to help balance their books from next April. In 2009-10, the minimum rise will be 1.75 per cent, while in 2010-11, it will be 1.5 per cent.
London Councils chairman Merrick Cockell said the announcement was "devastating" for boroughs and unfairly penalised the capital. "No account has been taken of the wide-ranging additional pressures that London faces as a top world city, particularly those of a rapidly expanding and extremely mobile population," he said.
Local government expert Tony Travers, from the LSE, added: "Overall it's going to mean shaving of spending and council tax rises as high as the councils can get away with."
Town halls claimed the funding package could be dented further after the Government was accused of underestimating the number of foreign workers arriving in the capital over the next three years by at least 350,000.
A breakdown of each borough's allocation will be announced later today.
Nationally, councils will get £70.4 billion next year, £73.5billion in 2009-10 and £76.7billion in 2010-11.
Reader views (8)
No doubt the Tory councils will as usual, hit the elderly, disabled and other social budgets to save a pittance for their selfish voters.
- Colin, Barking, Essex, 07/12/2007 11:54
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This news is absolutley disgusting we already pay far too much tax as it is. This will make life more unbearable, Labour are to blame they don't care about people at all. Most young people are finding it very hard with mortgages and high petrol costs stamp duty then hips packs. Brown wants Labour out! He and Labour are hated by younger people. Let's get rid.
- Paul Connolly, Potters Bar, Herts, 06/12/2007 21:20
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Why? It is not that services are improving. I think they want to give away much too much money to social cases. Less people are paying council tax nowadays. Some people do not bother. Also, it seems like there are real problems with some contractors on the garbage collection side in London. Some binmen think that it is OK to leave a mess and not to pick up everything we throw out. If they want to be paid they should work!
- Peter, London NW1., 06/12/2007 18:22
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All right. That's it. I have had enough.
I have had it with London, the, according to Ken, world's greatest city. Yeah, right. For greatest read most expensive. And very bad value for money at that.
Do I want to be paying through the nose for the next five years until the Olympics AND beyond? Well, the answer is a resounding, no.
The days when Londoners had a true choice are truly gone. And with that, I am off.
- Robin Braithwate, London, 06/12/2007 17:43
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Where does all the money go...every year above inflation (bit like the trains) It cannot go on.
Anarchy.
- Grim Reaper, London, 06/12/2007 17:25
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Ken's an expensive boy to keep.
- Liz, Rainham, London, 06/12/2007 17:19
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I think Boris or whomever wants to be the next Mayor should just promise to hand back 25% of Ken's cut of the Council Tax. That would secure my vote! As well as reducing the amount going to the shysters that surround the GLA.
- Mark, London, UK, 06/12/2007 16:53
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Why can't the government 'ratecap' the clown prince of London, Ken Livingstone, who has allegedly been merciless in channelling money out of our pockets for his own pals and pet causes?
I think that next year Londoners should ensure that the Green Party politicians who prop up his budgets should not get re-elected onto the GLA.
- Brian, London, 06/12/2007 16:37
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