Ministry of Housing, Communities & Local Government
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New people power veto over soaring council tax

The public will be given the power to veto excessive council tax rises Local Government Secretary Eric Pickles announced today.

The new Government has already committed to help councils to freeze council tax. In parallel, steps are now being taken to help prevent bills skyrocketing down the line by giving local people the final say in a vote on excessive increases. This will replace top-down council tax capping by Whitehall, which gave no choice to local residents.

The Secretary of State is determined to reverse the presumption that Whitehall knows best by making local councils directly accountable to the local taxpayer.

Let the people decide

Eric Pickles said:

"Hardworking families and pensioners were left feeling powerless and frustrated in the past thirteen years, as council tax bills doubled while their frontline services like weekly bin collections were halved.

"If councils want to increase council tax further, they will have to prove the case to the electorate. Let the people decide.

"The new Government is committed to a review of local government resource, but such reforms must go hand in hand with measures to protect the interests of local taxpayers.

"This is a radical extension of direct democracy, as part of a wider programme of decentralising power to local communities. Power should not just be given to councils, but be devolved further down to neighbourhoods and citizens."

Under the new proposals laid out in a technical consultation today, any council that set its council tax increase above a set ceiling, approved in a democratic and transparent manner by Parliament each year, would trigger an automatic referendum of all registered electors in their area.

Residents would be asked to choose between the proposed rise and a 'shadow budget', which the council must also prepare within the defined limit. A no vote would leave councils having to refund taxpayers or give a credit at the end of the tax year.

The previous Government stepped in to take capping action against 36 authorities which set excessive rises. Some of the highest rises were South Cambridgeshire who tried to set a 100 per cent increase in 2005-06 and Lincolnshire Police Authority a 79 per cent increase in 2008-09.

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