Osborne’s Council Tax Freeze: A Few Questions

This morning, immediately before the speech by George Osborne, there was a bit of a buzz around the rolling news channels and on the Daily Politics that Osborne might be about to pull a bit of an inheritance-tax style rabbit out of his rhetorical hat. “Something to do with local taxation”, hinted Andrew Neil. Then I went out for lunch. Intrigued to see what it was when I returned, I flipped on the news channels, only to find that nobody was talking about it, preferring instead to keep up the constant general rumble about the US bail-out plan. Nothing very interesting, then, I guessed.

Turning to the internet to find out, this was confirmed: Osborne has promised a council tax freeze. Except he doesn’t have the ability to enforce it. All he’s doing is offering councils money from central government worth up to a 2.5% increase in council tax in their area (as I understand it). So, instead of raising the money locally, they are being encouraged to increase the centralisation of their funding stream (nicely localist, George). I wonder if any other strings will be attached to the money?And would the money be withdrawn if a council stepped over the 2.5% threshold, or would it effectively just be a bit of extra money for councils. (That might explain Osborne’s projection of 100% take-up for his scheme.)

The real test on this is whether the Tory government would reverse the Labour trend of demanding that local councils provide certain services or fund certain projects, without providing them with sufficient money to pay for them, thus forcing them to take the political hit for raising the taxes necessary to fund them, while central government basks in the glory of simply having mandated the fruits of said spending. If not, then all that this will mean is an escalation in huffing and puffing by the national Tory party, whilst local councils put up council tax because they have to.

Of course, a genuinely localist party who genuinely wanted to do something about council tax might… oh, never mind.

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