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| Council tax: Referendum needed for bill rise above 3.5% | Council tax: Referendum needed for bill rise above 3.5% |
| (40 minutes later) | |
| Any local authority in England wanting to raise council tax by more than 3.5% next year must consult the public in a referendum, the government has said. | Any local authority in England wanting to raise council tax by more than 3.5% next year must consult the public in a referendum, the government has said. |
| Under plans unveiled by Local Government Secretary Eric Pickles, councils losing a referendum would have to revert to a lower increase in bills. | Under plans unveiled by Local Government Secretary Eric Pickles, councils losing a referendum would have to revert to a lower increase in bills. |
| Councils seeking to raise bills in tough economic times needed a "direct democratic mandate" to do so, he said. | Councils seeking to raise bills in tough economic times needed a "direct democratic mandate" to do so, he said. |
| Ministers have offered English councils cash to freeze bills next year. | Ministers have offered English councils cash to freeze bills next year. |
| However, at least one council - Brighton and Hove Council - has said it intends to raise council tax saying government budget cuts have made this necessary. | |
| Powers to hold local referendums over council tax were approved as part of the Localism Act, passed by Parliament recently. | |
| Mr Pickles announced on Thursday that the trigger for a council tax vote would be any council proposing a hike in bills of more than 3.5%. | |
| 'Moral obligation' | |
| This threshold, which must be approved by Parliament, would only apply during 2012-3. In future years, the level will be decided by ministers at the time. | |
| Mr Pickles said the plan would stop "big" bill increases and was a "radical extension" of direct democracy. | |
| "Councils have a moral obligation to help hard-working families and pensioners with the cost of living," he said. "If they want to hike taxes on their local residents above 3.5% they will now need to get a direct democratic mandate to do it." | |
| The BBC's local government correspondent Mike Sergeant said the referendum threshold had been set lower than expected - some way below the current rate of inflation which stands at 5.0%. | |
| Most English councils have frozen council tax for the past two years, receiving subsidies from government if they choose to keep bills down. | |
| But Brighton and Hove City Council, which is run by the Green Party, said earlier this month that it would have to increase council tax by 3.5% each year for the next two years in order to protect key services and the most vulnerable residents. | |
| Under current proposals, the council would not be obliged to hold a referendum unless it proposed a 3.6% rise. | |
| Annual Whitehall funding for local government is due to fall by about 7% between 2011 and 2015 as part of the coalition's deficit reduction drive. | |
| Labour have accused the government of front-loading cuts on town halls so they are forced to reduce services and staff. But a recent report by the Local Government Association suggested the majority of councils were managing the budget squeeze and not facing immediate financial difficulties. |