Tuesday, 30 September 2008

Tough financial times ahead for LG

Yesterday’s announcement at the Conservative Party Conference by shadow chancellor George Osborne, that the Conservatives would freeze Council Tax for the next two years, sets a potentially worrying financial scene for Local Authorities.

Although the scheme is based on “you limit your tax rise to 2.5%” and the Government “will give you enough cash to take it down to zero”, old stalwarts of local government can read between the lines to see even more financial pressure being placed on councils over the coming years.

Did this announcement have the backing of Conservative councils? A quick check around seems to suggest not, indeed I’m informed that there is some speculation on whether Margaret Eaton, the newly elected LGA Chairwoman, was even aware of it.

No matter how much Tory councils were aware of it, or indeed how long it may take for a general election to be held, given the way the current Government has been spooked by Conservative proposals (and found the need to adopt some of them), and given the current general financial environment, there can be little doubt that the pressure will be on councils to reduce their spending even more – making cost savings perhaps even more than currently advocated – in the next financial year and beyond.

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