London boroughs challenge PM on council tax hikes

Three Conservative council leaders in London have written to Andy Burnham, accusing the government of "devolving blame" for council tax hikes.

The leaders of Westminster, Wandsworth and Kensington and Chelsea councils said they were being forced to significantly raise council tax or cut services to plug a hole left by cuts to central government funding.

It follows a reform of council funding, which means more cash is directed to deprived areas.

The Tories want the change reviewed, claiming it will "worsen the lives of local residents across London and the South East". But the government said it was "fixing an outdated system" that benefited wealthy areas while poorer communities lost out.

The reforms made the system "fairer for taxpayers across the country", ministers added.

In a letter, Westminster City Council's Paul Swaddle, Wandsworth Council's Robert Morritt and Kensington and Chelsea Council's Elizabeth Campbell said the government's funding formula "punishes low tax councils".

They said: "If our councils do not impose council tax rises, our communities face considerable cuts in funding for local services.

"This is not just devolving blame, it is devolving council tax rises and government cuts.

"This is fiddled funding, cooked up in Whitehall but leaving town halls to carry the blame."

The three leaders added: "These tax rises are in addition to the new top-up council tax on many homes in our councils – and none of the revenues from this tax penalty will be retained by councils or by the mayor of London.

"There is nothing local about it."

Six councils have been granted two-year "funding realignment powers", which enables them to increase council tax beyond the 5% threshold.

The three Conservative leaders said their councils had been "singled out" for this, alongside the City of London, Hammersmith and Fulham, and Windsor and Maidenhead.

They argued that the Ministry of Housing, Communities and Local Government "assumed massive rises in council tax" in their areas to compensate for cuts to central government funding when publishing its Local Government Finance Settlement.

Backing the council leaders, shadow local government secretary Sir James Cleverly said "true devolution" could not mean imposing high council taxes "from on high".

He said: "London's taxpayers are being forced to pay a Burnham penalty on their council tax.

"The prime minister talks a lot about devolution. But by slashing funding for councils with lower tax rates, he is forcing them to raise taxes drastically or cut services severely."

However, a government spokesperson said: "We're fixing an outdated funding system so funding goes where need is greatest.

"For too long, some of the wealthiest parts of the country have benefited from exceptionally high levels of government support while communities facing greater pressures lost out.

"Our reforms will make the system fairer for taxpayers across the country, while protecting councils through the transition and ensuring no area faces a cliff edge."

The letter comes just weeks after the prime minister announced that English mayors would be allowed to keep a share of the taxes collected in their area.

Burnham said allowing mayors to keep a share of income tax and business rates would help to promote growth "in every postcode".

The council leaders of Westminster, Wandsworth and Kensington and Chelsea claim that "the reverse is happening here".

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