Been reading about George Osborne's ideas to limit Council Tax increases in England. Put simply, he's saying that any English Council which limits its proposed Council Tax increase to 2.5% would receive a grant payment from the Treasury which would reduce the increase to nil. Several consequences occur to me, beyond the assumed pleasure this will bring to Council Taxpayers and that it would cost a fair sum of money.
Firstly, it will put enormous pressure on councils to limit increases to 2.5%. Its not compulsory, but all I can say is that if I was a councillor in England, I would not vote for any other figure. Secondly, limiting spending to this extent will mean some seriously difficult decision making for councillors - and why not. For too long, the taxpayer has been hammered beyond reasonableness.
But what does this mean for Montgomeryshire. Well, nothing directly. But it seems to me that about 5% of any additional spending by the Treasury (which would be nil if it was derived through savings in other devolved subject areas) would be added to the annual block grant which passes to the National Assembly for Wales. But there would be no requirement that any increase would be spent to limit Council Tax increases. It could be spent on another of these 'freebies' that have been a feature of Assembly spending over recent years.
I daresay I'll be accused of adopting a Westminster focus (seems to happen quite often at the moment) but I reckon that this is a shrewd and innovative idea. For many years, my opinion has been that Councils should live within the discipline of 'no more than inflation' increases - except where additional financial burdens are imposed on Councils by national Government of course. Its not going to be liked by some councillors though, and I'll be interested to read about reactions when Council Finance Officers have worked out the figures.