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Fresh financial blow for councils in rates 'cap' re-think
4:00pm Monday 27th January 2014 in News
CASH-strapped councils across Worcestershire are facing a fresh financial headache - with ministers trying to reduce the amount they can hike up the rates.
The news has been lambasted as "like death by a thousand cuts" by a senior politician in Worcester.
Town halls in the county want to increase council tax by nearly two per cent in April, the maximum they can go to without being forced to stage a referendum.
Leaked cabinet papers have revealed local government secretary Eric Pickles wants to cap rises at 1.5 per cent from 2015, calling councils who try and raise it 1.9 per cent "democracy dodgers".
The stance would give councils across Worcestershire another funding problem to tackle if the Government pushes it through.
Worcester City Council and Worcestershire County Council are both about to introduce 1.9 per cent hikes, adding around £23 to the yearly average band D £1,453 bill.
But the end rise for households will approach £30 if West Mercia Police and the fire service, as expected, follow suit.
Councillor Richard Boorn, cabinet member for finance at the city council, said: "He came to power saying he would de-centralise local government, but what's happening is the exact opposite.
"Councils are meant to be the 'tax raising' authorities but he is taking it out of your hands.
"It's bad economics, if he doesn't want local democracy why doesn't he just go ahead and abolish us.
"It's like death by a thousand cuts."
Over the last three years council tax has been frozen in Worcester in return for accepting a cash sweetener from the Government worth the equivalent of a one per cent rise.
But the Labour administration, which grabbed power from the Conservatives last May, says budgets are so stretched it cannot afford another freeze.
That stance is being mirrored at Worcestershire County Council, where the Tories are still in power.
The leaked documents reveal how Mr Pickles wants to reduce the referendum threshold from two per cent, something which party chairman Grant Shapps supports.
In a letter to cabinet colleagues on the economic affairs committee, Mr Shapps said: "This would ensure local authorities think again about raising council tax given that a vote might be regarded as too much trouble."
By 2018 the county council is looking to cut £103 million from spending, while the city council needs to save an estimated £4.1 million by 2019.
Votes on council tax rises from April are taking place next month.
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