Copied from Local Government Chronicle
4 December, 2012 | By Ruth Keeling

District and parish councils have been left disappointed by the government’s decision to make every district negotiate council tax benefit deals with their parishes.

The move goes against the majority of submissions to a government consultation on the funding formula. Ninety-four per cent of respondents backed the creation of an unadjusted tax base which would avoid the need for detailed calculations for every town and parish authority.

Sandra Cowley, head of finance at Stroud DC and council tax lead for the Society of District Council Treasurers, described the decision as “astounding”; Michael Chater OBE, chairman of the National Association of Local Councils, expressed “strong disappointment”.

The government’s consultation response said it had returned to its original proposal because of concerns about the financial burden on districts should they be left covering parish shares of any mismatch between council tax benefit funding and provision.

The government’s apparent disregard for parish councils’ viewpoint comes after communities secretary Eric Pickles described ast month described them as “localism’s magic wand”.

Mr Chater said billing authorities had “a mixed track record of passing down finance to grassroots councils”. The decision to revert to the government’s original proposal to leave the decision to negotiation between billing and local councils would “put a strain on the delivery of localism and potentially weaken the trust local councils have in government”.

“The real risk for some local councils, is that the billing authority pays over no grant and the council tax base is reduced so resulting in an increase in the council tax rate charged for the local council without there being any change in the basic precept,” he added.

Ms Cowley said colleagues were “confused” by the government’s approach.

“I find it astounding after they have gone to all the trouble of running the consultation,” she said. Responses to the government’s consultation showed that 94% thought the unadjusted tax base was the right approach, including 77% of district councils who expressed concern about the complexities of calculating grant shares for a large number of parishes. “With the majority saying this is an issue they have chosen to go with the minority,” Ms Cowley added.

One district treasurer who did not want to be named said: “This is bad news our town and parish councils set their precepts mainly in December and they thought this issue had been resolved. How we liaise with more than 100 parishes at this time of year will be a new challenge.”

The Department for Communities & Local Government’s consultation response said: “16 respondents disagreed with the proposals with billing authorities making up the majority of those disagreeing. The general view was that the proposals would unfairly protect parish councils from the impact of localising council tax support and would put a financial pressure on the billing authority. Some billing authorities suggested this potential financial pressure would be higher where the parish has a precept larger than that of the district council.”

The response also said that taking action on the “basis of an assumption that billing authorities will not pass down funding…is contrary to the spirit of localism” and, as a result, “the government considers that greater weight should be given to the potential for the proposal set out in the council tax base consultation to increase the financial burden on billing authorities”.