Magazine article Public Finance

When the Cap Doesn't Fit

Magazine article Public Finance

When the Cap Doesn't Fit

Article excerpt

Once, not long ago, to be capped was seen as an honour and a privilege. Every young sportsperson dreamt of playing for their country. How times and the meaning of words change.

Currently, there are eight council leaders and eight chief executives who are rightly hopping mad at being capped by the government. Even the chair of the Local Government Association and its four group leaders are hopping mad. That's no mean feat.

The capped authorities, all district councils and Conservative-controlled, are: Aylesbury Vale; Daventry; Hambleton; Huntingdonshire; Mid Bedfordshire; North Dorset; Runnymede; and South Cambridgeshire.

Why has this created such feelings of anger, frustration and despair? Perhaps it is because capping is so nonsensical that I am tempted to compare it to a board game. Unlike a normal board game, however, capping has no clear rules to determine success or failure.

In the capping game one would expect to escape penalisation by being an excellent or good authority; by consulting and listening to constituents; by being committed to delivering high-quality public services; by being commended by the Audit Commission for sound financial management; and by being committed to medium-term financial planning.

These attributes are shared in whole or part by the eight councils caught up in the capping regime. These authorities have played by the rules, but they have still been capped.

So what was their mistake? They believed the government's talk of freedom and flexibilities; they set council tax levels at below the average; they were lulled into thinking that the government would use the same rules two years running. What's more, they thought that presenting a sound case to ministers would make a difference to their decisions. Instead, the government has micro-managed and bullied them - all in the name of protecting council tax payers.

The difficulty with the capping game is that only one side knows the rules - and that side can change them as it sees fit.

The government, in announcing the capping of the eight authorities, commented: 'We are keeping our promise to protect council tax payers against excessive increases.'

But what of those authorities that spent time and effort consulting their residents to ensure the quality of services delivered and the level of council tax were acceptable? …

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