2 days ago
Rural council tax to rise by £380 under Rayner plan
While helping to bolster coffers in cities, the group said this would lead to less money for local authorities in the country – despite their households facing higher council tax bills.
The warning comes after Ms Rayner launched a consultation on the new funding formula in June. This closed on Friday, with changes expected to be introduced from next year.
The CCN represents councils mainly covering rural towns, home to nearly half of England's population.
As part of its research, it found that £1.6bn in council tax income from dozens of rural authorities would be effectively redistributed to other parts of the country, including major towns and cities in the North.
Surrey County Council stands to be the biggest loser from the overhaul, according to the CCN.
Tim Oliver, leader of the council and chairman of the CCN, said: 'Surrey county council will lose something in the region of £160m of funding over three years.
'Our residents will pay the highest level of council tax but we'll see no increase in our funding over the next three years. That is going to put real pressure on services.
'In the meantime, money is flowing out of Surrey to other parts of the country.'
He added: 'Every year we look to make efficiencies. There is not a lot left to cut other than frontline services. So there is a very real risk that a number of councils across the country will either cut services or actually won't be able to balance their books and then will effectively declare bankruptcy.'
Mr Oliver warned that the reforms would punish councils that could raise more council tax, which were typically those in 'more rural counties'.
He said: 'They have bigger houses so they are in a higher tax band. It disproportionately affects higher value houses that already pay more council tax.'
The reforms go some way to helping rural areas by factoring in that their public services are typically costlier to provide.
But the CCN warned that they would place a 'disproportionate burden' on rural taxpayers.
'It's no surprise'
Kemi Badenoch, the Tory leader, said: 'Yet again the Labour Government are showing utter contempt for people living in rural Britain.
'This latest spiteful change will steal more money out of the hands of county councils and send it straight into Labour-run urban areas. Only the Conservatives are serious about standing up for our rural communities.'
Richard Tice, the deputy leader of Reform UK, added: 'It's no surprise that Ms Rayner's trying to gerrymander council tax but the truth is that councils across the country are spending money very badly and they don't need more money, they need to stop wasting it and get better value for money on what they're spending.
'The bottom line is governments can't keep foisting extra requirements and services on councils and expect people to just continue to pay regardless. You can only squeeze the pips to a certain point before they ping out of the fruit.'
It comes as Rachel Reeves is mulling a property tax raid targeting wealthy households in the South as she scrambles to fill a black hole as large as £50bn in the public finances ahead of the autumn Budget.
A spokesman for Ms Rayner's department said: 'We do not recognise this analysis. The current, outdated way in which local authorities are funded has left communities behind and damaged local services.
'This must change and is why we are taking decisive action as part of our Plan for Change to reform the funding system so we can improve public services, while maintaining the previous government's referendum threshold on council tax rises so taxpayers have the final say and are protected from excessive increases.'
