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More than 100 draft council budgets revealed by the Local Government Association show council tax looks set to rise by 4%. The survey also reveals that tight government funding is putting immense pressure on local authorities to keep council tax rises below 5%. And figures released by the Government in October showed the situation can only get worse over the next three years. Councils are set to receive an increase of 1% real terms in 2008/09, 0.1% in 2009/10 and –0.1% in 2010/11, once earmarked resources for PFI scheme are excluded. The poor funding settlement, combined with increasing financial pressures on councils, has prompted the LGA to once again call for a shake up of the council tax system, making councils less reliant on government grant. Speaking this week, Sir Simon Milton, chairman of the LGA, spoke of the need to keep money raised locally local. ‘The LGA has undertaken research which shows that for every pound a taxpayer pays in council tax, where they have a local vote on what they pay and how it is spent, they send five pounds in income tax to Whitehall. ‘Is five to one really the right balance? We want people to be more conscious of just how little of the money spent on local services is accountable within their local community. We will soon begin publishing the precise figure for the central local tax balance in each area.'Main pressures facing councils: • an extra 400,000 people over the next three years who will be aged over 65, many of whom will require social care from councils • the rising cost of landfill could see councils paying almost £2bn in tax over the next three years • the introduction of free England-wide bus travel for over-60s and some disabled people • additional burdens placed on councils, including new alcohol licensing laws and the costs of shifting Family Court hearings from the Ministry of Justice to councils.

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WHITEHALL

Draft budgets reveal 4% rise in council tax

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