Tees councils defy government by rejecting tax freeze

Richard Moss
Political editor, North East & Cumbria

image captionLocal Government Secretary Eric Pickles is not likely to be pleased when he finds out that council tax will be rising in some areas

There's good news for many council taxpayers ahead as for the second year the charge is likely to be frozen in many places.

But not it seems if you live in large parts of Teesside.

A survey by the BBC's Sunday Politics has discovered that four councils there are planning to put council tax up by 3.5% despite being offered a government incentive to freeze it.

Middlesbrough, Stockton, Redcar and Cleveland and Darlington say the government's offer would cause more problems than it would solve.

That's because Local Government Secretary Eric Pickles isn't offering quite as good a deal as he did last year.

Extra money

For 2011/12, councils were given a grant worth around 2.5% of their budgets in return for freezing the tax.

But crucially that extra money was on offer for five years.

This year, councils are again being offered 2.5% of their budget for agreeing to a freeze, but that grant will only last for one year.

Some local authorities say that would leave them trying to plug a budget black hole in subsequent years. They say that could only be filled by raising council tax, or making deeper cuts.

Redcar and Cleveland Council estimates it would have got £1.4m from the government for agreeing to the freeze.

But the local authority would then have had to cut that amount the following year as the grant disappeared, or raise council tax by enough to replace it.

The council has decided it can't face that and has opted for a 3.5% rise instead.

Council leader, Cllr George Dunning, said: "If we were to take this one-off grant, we'd end up in future years having to cut more jobs and more front-line services.

"We'd be looking at possibly closing libraries, questioning whether we could keep our Sure Start centres open - all those facilities would be under threat."

More pain

Other councils believe that a freeze is essential though in an economy where incomes are static while so many other bills are rising.

Carlisle City Council says it is planning to hold the council tax rate and accept the government grant.

Leader, Cllr Mike Mitchelson said: "I think it's about being fair to the residents of our area. Everybody's facing economic hardship, and we don't want to give them any more pain."

The irony is though that people in Carlisle might still end up seeing bills rise as the bulk of the tax they pay goes to the county council. It hasn't yet decided whether to accept the government grant.

You can be pretty sure though that no council will look to raise tax by more than 3.5%.

The government says any local authority considering that sort of rise would have to put it to the public in a referendum.

No council leader is likely to risk that in the current climate.

But many who decide on a lower rise will still need to put in a huge effort to explain why they are putting up council tax when most local authorities are freezing it.

North East and Cumbrian councils intending to freeze tax: Northumberland, Newcastle, North Tyneside, South Tyneside, Durham, North Yorkshire, Carlisle, Eden, South Lakeland, and Ryedale.

Councils planning a 3.5% increase: Darlington, Middlesbrough, Redcar and Cleveland and Stockton.

Yet to make a decision: Gateshead, Sunderland, Hartlepool, Cumbria, York, Scarborough, Richmond, Hambleton, Allerdale, and Copeland.