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Last Updated:  Friday, 28 February, 2003, 12:26 GMT
Council tax north-south divide
House: Many household's council tax bills will be rising next year
Many households face substantial bill rises in the coming year
Huge rises in council taxes in south-east England stem from ministers diverting money from the south to the north, the Conservatives have claimed.

Households across the south-east are facing the biggest increase in bills since the charge replaced the poll tax 10 years ago.

Tories claim this is down to changes in the way government grants - which make up about 75% of council income - are handed out.

How can it be fairer to give East Sussex - one of the poorest counties - the second worst settlement of any county in the whole country?
Daphne Bagshawe
Deputy Leader, East Sussex Council
This has meant money being diverted from Conservative councils in the south to Labour heartlands in the north and the Midlands, they have claimed.

A government minister on Friday dismissed this claim as "preposterous".

But Eric Pickles, the shadow spokesman for local government, told BBC Radio 4's Today programme it was true.

"If you look at what happened in London, there's been an increase of grant to Labour authorities of 5.6%, [but] an increase of grant to Conservative authorities of 3.7%."

He said the funding changes had effectively taken millions of pounds away from some councils - which left them in the "unfair" predicament of trying to make up a spending shortfall.

"If they don't put it up they're gong to be condemned by the government, if they do put it up they're going to be hit by capping."

Grant 'increases'

The Conservative Wandsworth council has announced the biggest rises - up 45%, although still in real terms very low.

Leader Edward Lister told Today: "It does seem as though Conservative authorities are particularly hard hit by this, but I must add that all London boroughs have been hit very hard.

Wandsworth (Con): +45%
Swindon (Con): +15%
Cumbria (Con, Lib/Dem): +12%
St Helen's (Lab): +3.5%

"So from a London perspective there's no good news for anybody coming out of the government at the present time."

But local government minister Nick Raynsford told Today the claim that more money was going to Labour councils was "preposterous".

"We've given real increases, above inflation increases, to every region of the country...

"There are whole series of Conservative councils in the south getting large increases yet sadly some of these are putting their council tax up by large amounts."

'Nudging' spending up

He threatened that some of the more "outrageous" tax rises may be capped, although no decision had so far been taken.

Half of London household's bills will be above 1,000
Average households will pay 570 more, taken with April's NI increases, say Tories

Some analysts backed the government's stance.

The Greater London Group at the London School of Economic said it was not all the government's fault.


"There is always a risk that when anything changes in the local government finance system... some local authorities will take this as an opportunity to nudge their spending up a bit," said director Tony Travers.

"And there probably has been a bit of that going on here too."

Wiltshire: +8.9%
Cambridgeshire: +8.5%
Wokingham: +8%
Source: Nick Raynsford, local government minister
Councillor Daphne Bagshawe, deputy leader of East Sussex County Council, said central government funding was shifting from the south and accounted for a 19.6% rise in council tax bills.

She said: "We have been arguing our case for a fairer deal with them for months.

"The government said it wanted to make the system 'fairer and simpler'. How can it be fairer to give East Sussex - one of the poorest counties - the second worst settlement of any county in the whole country?"

Richard Knowles, leader of Oldham Council, which saw a rise of 12.3% in council tax bills, said the bulk of the increase was outside the authority's control.

Such elements include funding for services like the police, fire and passenger transport authorities.

He said: "This increase is obviously a huge disappointment to the council and one we would regret having to implement."

'Horrendous' tax rise approved
18 Feb 03 |  England
Cornwall faces cuts in services
19 Feb 03 |  England
Q and A: Council tax rise
28 Feb 03 |  UK

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