Town and parish councils have warned ministers not to impose restrictions on their ability to raise tax amid talk of more being created under reorganisation.
Local government minister Jim McMahon has urged areas considering new parish councils to ‘think carefully about how they might be funded, to avoid putting further pressure on local authority finances and/or new burdens on the taxpayer'.
Since referendums were introduced in 2011, successive governments, including the new Labour Government, have excluded parish and town councils from any restrictions on their tax-raising abilities.
Writing for The MJ this week, head of policy at the National Association of Local Councils, Justin Griggs, argued the exclusion had allowed his members to ‘maintain the agility and autonomy necessary to meet evolving local priorities without being encumbered by unnecessary bureaucratic hurdles'.
He warned any restrictions would ‘fly in the face of the Government's stated commitment to devolution and localism' and ‘any change of course to effectively cap some or all parish and town councils would seriously threaten their effectiveness'.
Griggs said: ‘Parish and town councils are the community tier of government closest to the people, playing a vital and growing role in public service delivery and improving local quality of life. They are a vital component of a healthy democratic ecosystem and their financial independence is key to their success.
‘Capping the precepts of parish and town councils would be a regressive step – not only financially but democratically. It would strip these grassroots councils of their ability to respond quickly and appropriately to local and national challenges. With increasing expectations being placed on them – such as taking on assets and services from higher-tier councils, investing in services for older and younger people, helping keep communities healthier and safer or responding to emergencies like COVID-19 – financial flexibility is essential.
‘Any capping of precepts, for some or all parish and town councils, would undermine their ability to respond flexibly and effectively to national and local priorities such as local government reorganisation, remove their financial autonomy and stifle grassroots democracy.'
A senior council officer added: ‘The Ministry of Housing, Communities and Local Government (MHCLG) should focus on principal authorities, the broken local government finance system and the additional challenges brought by reorganisation and devolution. It doesn't need to interfere in the only part of local government that enjoys genuine financial autonomy. Parish councils have stepped up or been created to take over hundreds of local assets and services in recent years, such as in Cornwall, Wiltshire, Shropshire and many other areas that have already seen the abolition of district councils.'
Surrey CC's final reorganisation plan called for ‘clarity' on the Government's position on whether new town and parish councils will be able to raise an additional local precept.
Whitehall sources denied the Government was actively considering the option of restricting council tax rises by new town and parish councils but an MHCLG spokesperson declined to rule out the prospect publicly.
The MHCLG spokesperson said: ‘No decisions have been made on referendum principles for future years and, as is standard process, these decisions will be taken as part of the annual local government finance settlement.'
