Wednesday, 5 February 2014

Pickles backs down on threat to lower council tax referendum threshold

Local government minister Eric Pickles has been forced to back down from his plans to cut the threshold for council tax referendums. The figure will remain at 2% meaning that the Cornwall Council budget set in November can now be confirmed.

Two years ago, the government abolished the cap on council tax rises and replaced it with a referendum threshold. Any main council wanting to raise council tax by more than the threshold had to hold a binding referendum. The trouble is that the referendum has to take place in May, some two months after the start of the new financial year. It's all a bit of a mess and makes a mockery of Pickles' claim that this introduces more accountability and democracy.

Here in Cornwall we conducted the largest ever public consultation on our budget and got broad support for our plans to raise council tax by just under 2%. The uncertainty of a referendum after spending has started means that we cannot really take the risk of a no vote.

This year Pickles announced that he wanted to lower the threshold and the figure of 1.5% was mentioned. Everyone can take a view as to whether this is a good move or bad in principle, but keeping everyone hanging on until the last minute was fundamentally wrong. Councils, like businesses, need to be able to plan in advance. In Cornwall we set our budget in November in order to conduct a wider debate about the future shape of the council and because it enabled us to save £7 million more than a later budget would have. So a change to the threshold would have forced Cornwall to revisit its budget at great expense to services and confusion among staff, members and the public.

Thankfully, an alliance of Nick Clegg and Theresa May seems to have forced Pickles to abandon these plans. He has also confirmed that he will not be seeking to impose a referendum threshold on town and parish councils - a move which have thrown into disarray the current work to devolve many local services to towns and parishes that want to take them on.

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