Most politicians run for cover when they hear those dreaded two words ‘council tax.' Labour ministers have been especially adept at it, but then they have had the able services of Sir Michael Lyons to lob the subject far away into the long grass. It would, therefore, have been quite understandable if the Conservatives, at their Birmingham conference this week, pursued the same line, perhaps announcing an inquiry by a party heavyweight, such as Lord Heseltine or Lord Lamont into the balance of funding ‘with a view' to reporting back, say in 2011. By then, of course, all eyes would be on the forthcoming Olympics. So, you have to give shadow chancellor, George Osborne, some credit for daring to stand up before the party faithful in Birmingham and not succumb to the temptation to kick council tax into touch. It would certainly have been a lot easier if he had announced he intended to scrap it altogether. His audience would have cheered him to the rafters. But Mr Osborne knows that to go down that road means either nationalising all local government spending, or localising it through local income tax, both prospects his leader has already made clear will not happen. David Cameron told the LGA last July there was nothing wrong with council tax except that it was too high. So, Mr Osborne has, instead, come up with a curious hybrid, one which is likely to give him several hostages to fortune in the coming 18 months. He has promised a two-year freeze, presumably from 2011/12 financial year, assuming his party wins in May 2010. Funding will come from central government to the extent that if councils keep increases to 2.5%, it will hand back cash to reduce the rise down to zero, although he did not specify what happens if police authorities bust the limit, as happened this year. Mr Osborne reckons he can fund this to the tune of £1bn a year by cutting back private sector consultants – yes, that hoary old chestnut. He has, as a result, brought council tax into the pre-election campaign, a prospect which the next few months will show has been either very brave or very foolhardy. Michael Burton, Editor, The MJ
