An intriguing consultation paper has come out of the Department for Communities and Local Government (DCLG). It proposes that if a council wishes to raise council tax above the level that the Secretary of State caps it at then they can ask the people if they want to increase it that much in a referendum.
This is interesting in a number of ways. Firstly, it is good to see that the government is considering applying a local ability to circumvent capping of council tax rises. It is wrong, in my view, that the government can cap council tax rises. I think councils would have to have amazingly good reasons to raise local tax excessively but it removes local accountability when they can not do so. One of the problems is that some councils are pretty stale one party states (fortunately not a problem in No Overall Control Northumberland where I am a Councillor!) and do not worry about getting booted out. That however is more of a problem about the unfair electoral system used in Local Government Elections.
However, I am personally very uncomfortable about the increasing use of referenda in a representative democracy where we elect people to make the hard decisions. Electing them and then constantly regulating their behaviour through referenda potentially gives you the worst of both worlds, i.e. politicians who can't do what they want but who can hide behind referenda as a reason for failure.
Interestingly, the power is proposed to be extended to local councils, i.e. Parish and Town councils. Up to now they can increase their part of the precept by whatever they want. In small parishes, this is understandable as they have very small budgets and increasing the precept by a Pound for a band D household could be a 30% increase. However, bigger Town Councils are growing in size and council tax precept. I have seen a few adverts for Town Clerks in this region advertised at £55kpa and some have seven figure budgets and band D precepts of £100+. My Town Council recently increased it's precept by 20%+ despite opposition from the community (and me - I lost a vote for a more modest 3% rise 11-1!). So I think its right in theory that if the secretary of state has capping powers they should include parish and town councils. However looking at all parish and town coucnils and taking a mature view of an acceptable rise in precept would be a nightmare - there are more than 100 in Northumberland alone.
So really I think the problem is that we need to make all levels of local government more democratic with contested elections that are proportional and fair and then let them set what ever tax they want and face the consequences from the electorate. It would help if the tax was a fairer system than the grossly unfair council tax too.
But until that Liberal nirvana happens is this proposal a good idea? Well I can see the good intentions but I am unsure.