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Council Tax Rise Disliked By Minister

The council tax, which was introduced in 1993 replacing the community charge, has more than doubled since 1997. This year in April it is due to a further four per cent rise, announced the Local Government Association on Thursday. The rise is likely to make it even more difficult for people to cope with their personal finances since also living costs are increasing with higher prices on food, fuel and homes, making it difficult for many to pay off debts and homeowner loans.

By the same time as the LGA announced the rise, ministers said that it would not be justified. The local government minister John Healey even believed that the tax could instead be reduced if local authorities ?cut some waste? in the way they delivered their services.

Council tax, which is the least popular tax according to a poll made by YouGov since many people think that it is unfair, will rise by average four per cent in April this year. In some councils it will rise even more. One of them is Hampshire where the taxpayers will have to face a five per cent council tax rise.

Cllr Ken Thornberry, authorities leader in Hampshire said to the BBC, ?We are asked to do more and more by central government with less and less. The system is not sustainable.?

A viewpoint that the Local Government Association?s chairman Sir Simon Milton shared. He blamed the rises in council tax on inadequate government funding and extra demands on councils.

?The toughest financial settlement in a decade has left councils with difficult decisions to make locally.?

The local government minister on the other hand said that local authorities should be able to reduce the council tax and suggested them to be more efficient in their delivery of services.

Ten local authorities are likely to be able to cut down on council tax according to the government. Among them is Hampshire, which the government think could save its householders 36 pounds a year, or increase the standard on service without raising the tax.

According to the Guardian the local government minister?s statement has infuriated the Local Government Association, which said, ?According to the Treasury, councils are the most efficient part of the public sector. If Whitehall were to follow the example set by councils, then perhaps people could look forward to a cut in their income tax.?

Council tax is the only tax that is decided by local government, but it only contributes a small proportion of the councils? revenues. The majority comes from central government. It has been criticized many times during the years for being unfair since it doesn?t take into account peoples? incomes.

As alternatives to the council tax there has been proposals of a system of local income tax to replace it, which is the norm in some European countries, or simply to remove it in favour for funding directly from central government finances.

The Liberal Democrats advocate a scrap of the council tax.

?We think it should be replaced by a tax based on peoples ability to pay. Under the present system the prime minister living in a nice house on 10 Downing Street pays about the same amount as a pensioner living in an apartment in Hackney,? said Liberal democrat MP Tom Brake.

Johanna - http://www.onlyfinance.com

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