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'Buy Now Pay Later' Council Tax Scheme


12:01am 1st December 2011

Last year the Conservative Liberal Democrat Government offered councils funding equivalent to a 2.5% rise in council tax to freeze council tax for one year.

This funding has to be paid back by council taxpayers in three years time.

The Labour Opposition Group of City of York Council was the first York political group calling on the council to accept this scheme.

This year the Government is offering a similar scheme but the equivalent funding would need to be repaid immediately next year rather than in three years time.

This is leading to concern about the Government's 'buy now, pay later' council tax scheme.

Accepting the scheme this year will mean larger council tax increases next year.

Labour is committed to proposing a two-year budget rather than the usual annual, which means greater consideration is being given to this issue than in many other local authorities.

Labour Leader of City of York Council, Coun. James Alexander said:

"Last year's freeze scheme will cost council taxpayers over £1.8m in three years time. Labour supported this scheme. This year the Conservatives and Liberal Democrats in Government want another freeze but they are not telling council taxpayers they will have to pay for this immediately back next year with a double rise in council tax. The Government is encouraging a 'buy now, pay later' attitude to council finances that will mean larger increase in council tax next year.

"Some well run Labour authorities can afford to take the opportunity the Government is giving them this year but after only six months of administration, I don't feel that City of York Council has been left in a good financial position by the Liberal Democrats to make a rash decision on this issue.

"Labour's manifesto pledged to keep council tax low, so storing up larger increases for the future would not be honouring this pledge. A snap decision on whether to accept this or not before the Government has even confirmed its funding levels to the council for the coming year would be reckless. Greater consideration is needed in light of the £22m of savings required over the next two years largely due to Government funding reductions."

A decision on council tax levels in York is expected in February.

Further details on the Government's council tax scheme can be found in agenda item 6 of the next council cabinet. Details can be found here:

York's independent Fairness Commission has recently recommended a council tax increase in the coming financial year of between 3.5 - 6%. Details can be found here: http://www.yorkfairnesscommission.org.uk/report-download.html

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