May 28, 2018

UK tax OUTRAGE: Millions face double whammy of higher bills and bigger public service cuts

THE CONSERVATIVES have been accused of declaring war on the middle classes over plans for swingeing cuts to county council budgets.

Council tax bills are also expected to rise by nearly four per cent, with those in the highest bands hit hardest.

The proposal would see well-off rural areas bear the brunt of the cuts as Government funding is slashed by almost half in some places.

Tory heartlands including Dorset, Buckinghamshire and Leicestershire are making contingency plans to cut jobs and services.

Under Government proposals, central funding will be scaled back according to how much cash local authorities can raise through council tax.

Because middle-class areas have more expensive homes and can raise more revenue, they will be worst affected.

Up to now cuts to the Revenue Support Grant have been made at a flat rate across the board, regardless of council tax revenue.

But the Government announced surprise plans to change the funding formula in December, leaving county councils facing cuts of £184million on top of the £854million already planned.

David Cameron is facing his first major rebellion of 2016 over the issue.

Last night it was revealed that more than 40 backbench Tory MPs have signed a letter to Communities Secretary Greg Clarke urging the Government to think again.

One potential rebel said: “There is a lot of anger about this. It seems the party has declared war on the middle classes and is now making a grab for the Labour vote at the expense of Tory voters.”

According to documents seen by the Sunday Express, the changes would see rural counties facing an average funding cut of 33.7 per cent in 2016/17.

This compares with an average cut of 24 per cent in metropolitan areas and an average of 27.6 per cent across all local councils in England.

Critics say the situation is made worse because it comes after years of underfunding for rural areas.

Rural counties already receive 37 per cent less per head than urban areas.

Under the proposals, this gap would grow to 90 per cent by 2019/20, with rural county residents receiving just £6.85 per head, compared with £66.82 in metropolitan areas.

Deputy leader Byron Rhodes said: “This is the most challenging budget the council has faced for a generation.

“We were already the lowest funded county council but now the funding formula is shifting even more money away from counties to cities. We will have to take tough decisions such as cuts to early help and public health services and rural bus subsidies if we are to deliver the savings we need.”

Under plans announced by Chancellor George Osborne in his autumn statement, the Revenue Support Grant will eventually be phased out.

Instead local authorities will be able to keep all the money raised from business rates.

The Department for Communities and Local Government has defended the proposals, which it claims will result in a 0.2 per cent increase in spending power for rural areas.

A spokesman said: “We recognise rural communities face particular challenges and are increasing funding from £15.5million this year to £65million by 2020.”

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