The Audit Commission has issued a report on how local authorities are dealing with the credit crunch. For the most part, it’s not too bad. From the press release:

By and large councils knew this downturn was coming and have planned for it. The pressures are real but councils are coping with them well

However, pressure is increasing on councils as well:

The commission’s findings show that:

• Two thirds of councils are reporting increases in applications for housing and other benefits as a direct result of the downturn.
• A quarter of England’s councils have seen increased demand for elderly care
• One in ten councils are experiencing increased demand for state school places – often as parents pull their children out of private schools
• One in seven has made compulsory redundancies, or plans to do so.
• Many councils are reviewing recruitment, or seeking savings by leaving posts unfilled.

Not long ago, one Mr G Osborne (c/o the House of Commons, London SW1), at his party’s annual conference, said

The next Conservative government will freeze your council tax for at least two years. Every council tax bill of every family in every council that takes part will be frozen.

That is a real terms revenue cut for two years. Now, there may be an argument for some councils (say, those that didn’t invest in Iceland) for cutting taxes. I would say that there is an equally good argument for councils to make sure that they can provide (say) meals on wheels and should be able to raise taxes to ensure those services when tax receipts might otherwise be falling. Either way, it is a decision that should be taken locally.

The Audit Commission’s complete report is available as a PDF.

xD.

Posted on Friday, December 19th, 2008 at 11:18 pm
Categories: Tories.
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The wrong time to freeze council tax