Why we’re raising council tax

Nobody wants to pay more tax and I am not a high tax and spend politician, so my administration’s proposed rejection of the government’s council tax funding has not been based on ideological dogma, but a reasoned decision based on financial prudence.

I led my group to win control of City of York Council in May 2011. We inherited from the previous Liberal Democrat administration a budget with £21m of in year cuts to make, a number of previously unexposed financial black holes and reserves at legal minimum. The council’s reserves were almost halved by them in the last three years. One of the first acts of my administration was the reversal of £1m of these in year cuts by being smarter with our money.

Last year the government offered councils the equivalent of a 2.5% council tax rise in funding for four years as long as there was a council tax freeze in the first. My group was the first political group in York to call for the acceptance of this funding. This made sense. It was helping councils freeze council tax at a time when the cost of living is rising. It also allowed councils four years to plan for when this funding drops out of the council tax base.

This year the Government is doing something similar, but with one very big difference. The money is only for one year. Other council leaders of different political persuasions I have spoken to have said because of local elections this coming May, party loyalty or small majorities they will take this funding and next year whack up council tax, increase cuts, or pay for the drop in the base out of reserves. The Government is bribing councils into bigger cuts, larger council tax rises or less financial prudence.

Council finance officers have confirmed that as York’s reserves are at legal minimum, if we accepted the Government’s ‘buy now pay later’ council tax funding option, it would mean £2.2m extra in cuts over the next two years.  Or alternatively, a further £300k of cuts this year and an even larger 4.5% council tax increase next year. The Government’s offer is not a good deal for York council taxpayers.

My administration has proposed a two year budget. This means that if the Conservative or Liberal Democrat opposition groups want to attempt to amend the budget accepting the Government’s council tax freeze funding, they must show what cuts or tax rises next year they would do to pay for it.

The truth of the matter is that this Conservative and Liberal Democrat policy means more cuts in York than Labour, or larger council tax increases in the future than Labour.

Local government minister, Bob Neill said my administration’s position based on prudence was an “incredibly inconsiderate decision”. This comes from a man who on 10^th June, 2010 said in Parliament, “Those in greatest need ultimately bear the burden of paying off the debt which this country has been left”.

Eric Pickles has also began attacking York. He said in the Times we had wasted £400k on consultants for a new Energy from Waste (EFW) plant, but he doesn’t say this is a shared service project with Conservative North Yorkshire County Council which will save York council taxpayers £60m over the next 29 years by not burying our rubbish in landfill. The scheme was voted through in York before Labour won control of the council in May.  Conservative, Labour and Liberal Democrats in York all voted in favour of the project.

York is picking up 25% of the cost, whilst Tory North Yorkshire County Council is paying 75%.  If Eric Pickles thinks York has wasted £400k on this project, then Tory North Yorkshire County has wasted £1.2m. But he doesn’t mention this.

The Conservative-led Government talks about localism until they don’t like what the local decision is and my administration will not be bullied.

Labour’s proposed council tax rise is 2.9%. This is below inflation and currently the lowest predicted rise of any Labour authority rejecting the government’s council tax funding. This is less than the proposed rises of Conservative controlled North Dorset, Dover, Taunton Deane, Tunbridge Wells, Scarborough, Surrey, Cambridgeshire, East Cambridgeshire and Peterborough.

The Government cut £16.7m from City of York Council’s funding in 2011/12 and is cutting further in 2012/13.

James Alexander is the leader of City of York Council.