David Cameron’s intervention on council tax, courtesy of a recent Young Foundation event, was telling on a number of levels.
First, there was the apparent sense of ‘bravery’ he wanted to convey by handling what most conventional politicians regard as the radioactive topic of local government finance. Delve deeper, however, and their new stance is actually not so brave after all. The Conservative party now appears to be against ‘capping’ local authorities who raise their council tax by any level, as long as local people explicitly signal their consent in a referendum if the increase is to be above a certain threshold.
At first glance it appears startling to suggest there could be complete freedom for councils to propose whatever heights of council tax they wanted – though in reality it is highly improbable that any local referendum would embrace the upper extremes of any new tax hike. As ever, if this is ‘freedom’ for local government, it comes with extremely heavy strings attached.
Local government minister John Healey recently told councils he expected that council tax rises could stay “well below 5%” in 2008, a signal that suggests the government will be willing to step in and force councillors to back down if they go much further over this mark. While I am no fan of council tax capping, there can be little doubt that the tough financial settlement this year will mean council tax is high on the news agenda over the coming months, and it is no surprise that government wants to fire the opening salvo to encourage councils to behave reasonably.
It was interesting to note that the upper echelons of the Conservative-controlled Local Government Association were apparently none the wiser about this Cameron announcement. When asked by Local Government Chronicle there seemed a distinctly frosty response from Tory town hall leaders.
The second telling thing about Cameron’s announcement was the timing. Cameron is clearly well aware of the political ‘forward agenda’, and by making this statement in early November he pre-empted a potentially tricky position for his party at the end of the month when individual authority settlements are announced. The Tories now have their story to tell, even if it is a veneer. This will be especially important for him if outlying Conservative councils happen to be in the embarrassing position of raising council tax, thus allowing Cameron to implicitly distance himself from their excesses. We shall see if his strategy works.
The third aspect of this announcement is the shallowness of ambition which the Conservative frontbench appear to have; if the most Cameron has to say on council tax and local government finance is “give them referendums”, then one has to ask “is that it?”. Sir Michael Lyons’ inquiry recommendations were not considered worthwhile by the Tories. Nor, it seems, was there anything they wanted to do to fundamentally shift the balance of power and the balance of funding between Whitehall and local authorities.
Council tax reform is an urgent and pressing problem which I hope the government will shortly address, especially if – as appears the case – this is terrain the Conservatives are too afraid to dig into. There are real solutions available, but they require fresh thinking about how revenue is assigned between the Treasury and town halls in this country, and how the total tax take from council tax should be reduced to allow reforms to be made without penalising households.
New Local Government Network will be suggesting ways to achieve this over the coming weeks, and we hope the government will grasp the nettle where the Tories appear too afraid to tread.