Forum Brief: Council tax increases

Many local authorities are imposing huge council tax increases from next month because of a shortfall education funding from central government, reports today's Times.

Forum Response: National Union of Teachers

A spokesman for the NUT told ePolitix.com: "The big worry for teachers, pupils and parents in areas where there is a shortfall is that schools will use classroom assistants to take over the work of teachers, putting children's education in jeopardy.

"Classroom assistants cost less to employ and schools strapped for cash may see this route as the answer to their problems. The recent agreement between the government and the other teachers' organisations make this a real possibility but it is one which the NUT will not countenance.

"Children's education is too important to be left in the hands of non-teachers and it is a route that head teachers must resist. The union will work with both local authorities and schools to protect children's futures."

Forum Response: Local Government Association

A spokesman for the LGA said: "Council tax increases are for each local authority to decide based upon the needs of local communities, but the grant settlement from central government for 2003/04 is in reality based on an assumed rise of 6 per cent in council tax.

"Although an overall general grant increase of 5.9 per cent for local government was announced for this year, there are significant variations for individual councils, with many only receiving the basic increase in grant of 3 per cent (shire districts, police and fire authorities) or 3.5 per cent (education, social service authorities).

"The LGA has expressed alarm at the increasing amount of government intervention over how councils spend their money. For example, the Department for Education's insistence this year that councils "passport" increases in schools provision direct to schools, has in many cases absorbed most if not all of the increase in grant. Increases in Police Authority precepts have been particularly severe in the light of extra police numbers and the continuing pension problems.

"For many local authorities specific local factors may contribute towards council tax increases. But, there are also a wide range of general cost pressures impacting on local budgets. For example, the 1 per cent increase in National Insurance contributions that employers will have to pay from April will absorb 8 per cent of the total increase in grant. Councils are also having to fund above inflation wage and salary increases, and in many parts of the country face additional cost pressures to recruit and retain staff. The requirement to finance pensions and the rapidly increasing costs of insurance are also contributing to council tax increases, as are the additional costs of meeting government policies and central targets.

"In order to meet the needs of their local communities, most councils already spend more than the government provides on services such as education and social services. The high degree of `gearing' in the current local government finance system - so that a one per cent increase in spending leads on average to a five per cent increase in council tax - means that relatively small increases in local spending can lead to significant rises in council tax levels.

"These budget pressures, coupled with the government's practice of ring-fencing increasing amounts of council grant money, are forcing many local authorities to make very difficult decisions, either to raise council tax - or cut key services. As such any government move to impose capping on local authorities that have decided to increase their council tax would be strongly opposed by the LGA, which has stated its opposition to capping in any form. It would conflict with the policy of extending freedoms and flexibilities."