LOCAL feelings are running high following a warning from Hampshire County Council over possible inflation busting council tax rises for the 2006-7 financial year. There are fears that council taxes may have to rise by around 7.5 per cent, more than twice the current rate of inflation, and that local residents could be facing cuts in the services it provides. The threat has caused anger amongst local council tax campaigners who believe the council has to face up to the fact that it cannot serve two masters - the government and the electorate. And it has resulted in a call from North East Hampshire MP James Arbuthnot for the government to put a stop to all thoughts of revaluation and to look at providing a tax system which is run and administered in a more fair and open manner. Concerned that a reduction in government grant funding will force another unpopular council tax hike, Hampshire County Council has promised residents that it will not take the threat lying down. A statement last week assured residents that the council would be "taking every opportunity to fight, at a national level, for a fair deal for Hampshire residents". And it intended to undertake "extensive consultation" with residents to ensure that their views are taken into account before setting the budget next spring. It was explained that while the government grant currently pays for around 60 per cent of the county council's services, the rest has to be paid for by residents through council tax. The county council, the statement continued, "was facing some of its hardest ever budget decisions in light of uncertainties over government spending plans in 2006/07 because of the way government calculates how much grant to give councils. "Everything is pointing to an inflation-busting council tax rise next year, as a result of further anticipated government grant change. If government continues with its policy of capping councils that set rises above five per cent then the county council will have to consider service cuts on top of efficiency savings it is already making." Furthermore, Hampshire was unlikely to see a repeat of the one-off extra grant it received in 2004/05 and 2005/06, despite having to meet the cost of implementing the Children Act and other new legal requirements. County council leader Ken Thornber explained: "In the recent past, the government has not favoured Hampshire when allocating grants to local authorities. All the signs are that next year we will once again receive one of the lowest grants for county councils because of the way the government works out the distribution of grant. "Changes to the way education is funded means that it is likely there will be only around a 1.7 per cent increase for other services such as social care, roads and libraries, when their inflation rates are much higher than this. Unless government puts more money into the pot for local government then nationally we are looking at council tax rises of around 7.5 per cent. "In recent years the government has recognised the need to do something to help councils and stop residents facing the burden of higher council tax rises by awarding one- off additional grants, but all this has done is to defer council tax rises to 2006/07. "In 2005/06 the one-off grant and £15 million in efficiency savings helped us to bring in the county council's lowest council tax rise in 35 years. The county council will continue to make efficiency savings where it can, but without the additional grant and with the threat of capping hanging above our heads, there may be a need to make cuts in services. "Neither high council tax increases or cuts in services are desirable and we will be exploring every avenue to avoid them. To ensure that residents views are taken into account we will be consulting on the budget at the earliest stage possible." East Hampshire District Council leader Andrew Pattie told The Herald he blamed the trend of central government which was moving money away from the South East towards Labour heartlands in the Midlands and North. "We will do what we can to mitigate the substantial rises," said Mr Pattie who confirmed the five year pledge by EHDC to only raise council taxes by the rate of inflation. James Arbuthnot MP accused the government of implementing another "stealth tax" by burdening local authorities with more responsibility but without compensation, and by moving money to the north. Hampshire County Council had, he believed, done its best to maintain a reasonable level of council tax but, faced with government manipulation, was being forced, like others, into yet another tax hike. While he did not favour abolition of a property-based system, Mr Arbuthnot was calling for a system which was more fairly and openly administered. And he was vehemently opposed to the proposed revaluation exercise.
