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Local referendums to veto excessive council tax increases

30 July 2010

Background

The Coalition Government is proposing to allow local referendums to veto excessive council tax increases as an alternative to capping by central government.

This consultation document sets out the basic principles underpinning such a scheme and seeks views on the practicality and technical feasibility of the mechanisms for triggering and holding a referendum.

Basically each year the Secretary of State will ‘determine’ a principle based on a comparison of a local authority’s level of council tax with the level in the previous year. Any local authority which exceeds the principles will be required to hold a referendum of all registered local electors.

If the electors refuse to vote for a rise in council tax the local authority will be required to adopt a ‘shadow budget’. This budget must be based on the maximum council tax increase allowed by the Secretary of State’s principles. The local authority will then issue new bills immediately, offer refunds at the end of the year or allow credits against liability in the following year.

Relevant provisions will be included in the Localism Bill, which will be subject to a full impact assessment. This legislation would cover both England and Wales but the administration of council tax in Wales is a matter for the Welsh Assembly Government.

Closing date for responses

The closing date for responses was 10 September 2010.

More information

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