THE proposed increase in council tax this year is the lowest for a decade, but Labour’s record is nothing to be proud of .
Council tax bills have gone up by 94 per cent in 12 years, almost double the increase in average earnings and more than three times the rate of inflation. Since the introduction of council tax in 1993, year-on-year increases have been well above inflation, peaking in 2003-04 when the average council tax bill went up by 12.9 per cent.
Successive Conservative and Labour Governments felt that householders could swallow rises in local taxes as long as they remained in single figures, and this proved largely correct, with average increases of up to 8.6 per cent and usually above 6 per cent.
In 2003, however, a slight redistribu-tion of the level of central government grant from one authority to another proved a huge miscalculation and sent bills soaring to 12.9 per cent.
Aimed at shifting money from the southern counties to the midlands and northern councils, the move resulted in those authorities that received bumper grants from central government simply spending it without passing on the benefits to tax payers, while those with less cash felt they had no option but to hike up the council tax rate to keep in line with spending policy. This led to the “grey revolt” in 2003. In 2004-05 a few extra grants coupled with the threat of capping took the rise back down to 5.9 per cent but a long-term solution has yet to be found.
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“The redistribution in 2003 was a mistake by the Government, and since then it has made jolly sure the average increase has come down,” said Tony Travers, local government expert at the London School of Economics.