Tuesday, September 30, 2008

Tough Choices Ahead.

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.


Peter Black said...

Actually Glyn my reading of the proposal was that the extra money would go to Councils who limited increases in their expenditure to 2.5%. There is a big difference.

Anonymous said...

2.5% would seem quite reasonable for Montgomeryshire despite inflation and power costs especially when WAG is currently proposing a nil increase for Powys.

Glyn Davies said...

Peter - You are surely right. It makes more sense. Thanks. Makes no difference to Montgomeryshire either way.

anon - I would be pleasantly surprised if Powys managed to come in at 2.5% - even if they turn all the street lights off.

Anonymous said...

I don't think that the residents of Llanbrynmair should pay any council tax if all these proposed windfarms get the go ahead!!

Glyn Davies said...

anon - as a consequence of the Assembly Government's planning guidelines (TAN 8) the Local Authority will find it difficult to resist them.