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Reading the Red Book I see the Council Tax freeze for England is budgeted for one year (at a cost of £625 million after changes in Council Tax benefit are taken into account.) The policy is to apply it for "at least" one year. I hope that it will be possible to extend it for more than one year but the money for this has not been found yet.

Of course this year we had lots of Councils ( including most of the London boroughs) freezing or cutting Council Tax even without this boost. So what impact will this extra help – equivalent to 2.5% of Council Tax -have on those councils?

The Red Book says:

The Government will work in partnership with local authorities to implement a freeze in council tax in England in 2011-12. The Government will clarify in due course the terms under which local authorities that commit to freeze or reduce their council tax will be compensated.

Would a Council that would otherwise have achieved a freeze find that, with this extra money, they could bring in a 2.5% cut? Of course it could be that next year the tougher general grant settlement will make it tough for Councils to achieve anything better than a freeze even with this deal the Government are offering them. On the other hand reduced ring fencing and demands for data from Whitehall should help to reduce costs. As should spending transparency.

Other Red Book news is that the Government will:

consider the most appropriate framework of incentives for local authorities to support growth, including exploring options for business rate and council tax incentives, which would allow local authorities to reinvest the benefits of growth into local communities;

Also:

promote the role for a simplified planning consents process in specific areas where there is potential or need for business growth, through use of Local Development Orders.

9 comments for: Council Tax freeze only budgeted for one year

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