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Local Authorities: Budgets

Volume 670: debated on Thursday 3 March 2005

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asked Her Majesty's Government:Following the letter from the Minister of State for Local Government and the Regions (Mr Nick Raynsford) to local authority leaders of 8 December 2004, which stated that "we expect all local authorities to budget prudently, and that the average council tax increase in England will be less than five per cent next year", whether they will cap the Greater London Authority following its decision on 14 February to set a precept of 5.5 per cent. [HL1422]

Legislation requires that capping decisions are based on principles determined by my right honourable friend the Deputy Prime Minister as Secretary of State. In reaching his decisions, he must make a comparison between an authority's budget requirement with that of a previous year. He can also determine other principles, such as increases in council tax.No decisions on capping principles have been taken. My right honourable friend the Deputy Prime Minister will take decisions on capping after authorities have informed the Office of the Deputy Prime Minister of their budget information for 2005–06 which they must do by 18 March 2005.