THE EXCHEQUER is offering local authorities extra cash if they agree to freeze council tax again for the next two years, it was revealed yesterday, as part of a plan to cut 10 per cent off the Department for Communities and Local Government’s budget.
In total £833m is on offer. Any council which wants to increase its taxes by more than two per cent will have to hold a local referendum to get permission from voters.
But the squeeze on those revenues combined with a tighter grip on grants has left firms fearing councils will turn to them to plug the gap.
“Businesses on the high street will hope that the continued freeze in council tax will mean more money in the pockets of customers,” said John Allan from the Federation of Small Businesses.
“But they continue to be penalised by ever-increasing business rates – particularly last year’s 5.6 per cent increase. Business rates are the third highest outgoing for a business after rent and wages and radical reform of the tax is needed to make it fairer for small firms.”
Meanwhile the Scottish and Northern Irish administrations will see their departmental funding cut by 1.5 per cent and Wales’ authorities will be given 1.8 per cent less.
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