Middle England will be hit by the highest possible increases in council taxes to pay for Angela Rayner‘s reforms to the system, town hall leaders have warned.
Households in the countryside will reportedly be charged at unfairly high levels to pay for residents of cities under the Communities Secretary’s ‘fair funding’ plans.
Last night, Tory leader Kemi Badenoch branded it a ‘spiteful’ move that will push more cash into traditional Labour areas.
Analysis by the County Councils Network (CNN) found rural and county local authorities will lose close to half a billion pounds in Government cash over the next three years thanks to Ms Rayner’s attempt to level up the system.
This will force them to cut vital services and hike bills for hard-pressed residents by the maximum 5 per cent allowed.
The CCN demanded an urgent injection of cash from Whitehall to fill the gap, warning town halls on the brink would otherwise be unable to provide crucial care for the elderly and vulnerable children.
It comes after almost all town halls raised bills by the maximum amount earlier this year to deal with soaring demand and costs, taking the average bill to £2,280.
Chairman of the group, councillor Tim Oliver, said: ‘Some 16 county and rural councils will see reductions in grant funding, while the Government’s proposals place a disproportionate burden on taxpayers in county areas to fund local services and redistribute funding to urban areas.
Middle England will be hit by the highest possible increases in council taxes to pay for Angela Rayner’s reforms to the system, town hall leaders have warned
Households in the countryside will reportedly be charged at unfairly high levels to pay for residents of cities under the Communities Secretary’s ‘fair funding’ plans (stock photo)
‘It’s vital the Government makes more money available to mitigate the impact of these reforms.’
Ms Badenoch said: ‘Yet again the Labour Government is showing utter contempt for people living in rural Britain.
‘The family farms tax has been devastating, and scrapping the rural services grant has put rural councils under enormous pressure.
‘This latest change will steal more money out of the hands of county councils and send it straight into Labour-run urban areas.’
Under Ms Rayner’s Fair Funding Review 2.0, the Ministry of Housing, Communities and Local Government (MHCLG) will make major changes to how English councils are funded.
Her updated formula will allocate cash based on local areas’ needs and their ability to raise council tax compared to others around the country.
The Institute for Fiscal Studies think-tank has already warned it will create big winners and losers, with those in the home counties likely to suffer budget cuts unless council taxes rise.
Tory leader Kemi Badenoch (pictured) branded it a ‘spiteful’ move that will push more cash into traditional Labour areas
In its response to the MHCLG consultation, published last night, the CCN said it would mean 16 authorities – including some in the Midlands and North – losing £470million of funding over the next three years.
In total, county and unitary councils’ grant funding will rise by just £374million. Unless 33 of the 38 town halls impose the maximum 5 per cent council tax rises, they will see a real-terms cut in funding, according to the CCN.
Metropolitan authorities will get £1.2billion, and a proposal to redistribute £1.6billion in council tax income will benefit urban areas at the expense of the countryside.
An MHCLG spokesman said: ‘We do not recognise this analysis. We are taking decisive action to reform the funding system.’
