Eric Pickles is facing pressure from high level Liberal Democrats and Conservative colleagues to ditch a potential 1% referendum cap on council tax rises.
LocalGov understands Conservatives are currently split on whether to lower the threshold, with some joining their Liberal Democrat colleagues in opposing the communities secretary’s belief that it should fall below the current 2% level.
As it currently stands, councils are required to take any planned council tax rise of 2% or more out to a local vote. It is thought that a 1% threshold would result in even the smallest rise in local levies going to a referendum.
A letter sent by chief secretary to the Treasury Danny Alexander to leaders of the Local Government Association Conservative and Labour groups and seen by LocalGov warns that lowering the threshold would put ‘an unnecessary further constraint’ on town halls and hit local services.
‘The Liberal Democrats have long believed in devolving power to the most local level, on the principle that the best decisions tend to be made by those closest to the people those decisions effect. It is for this reason, that the Liberal Democrats in the Coalition Government will not support proposals to lower the referendum threshold,’ Alexander wrote.
‘Because of the state of the public finances, we are having to ask a lot of local authorities, who, by and large, are rising to the challenge of cutting expenditure while protecting important public services. Lowering the threshold will put unnecessary further pressure on local authorities and the much needed services they provide.
‘While I would strongly argue for local authorities to protect taxpayers from rises in council tax, nevertheless this is a choice that should rightly be made by local authorities and not be imposed centrally.
‘While Conservative and Labour Councils have been quick to increase Council Tax, Lib Dems have not. In the end, these councils should be accountable to their electorates. It is not for central government to impose such constraints,’ he added.
