Councils warned not to use loophole

Eric PicklesCommunities Secretary Eric Pickles has warned town halls against "cheating" council tax payers by using a loophole to dodge referendums on hikes.

The coalition has been urging local authorities to freeze the levy again this year, insisting a public vote should be held to approve any increase above 2%.

However, only around a third are expected to hold council tax steady amid claims that services are becoming too stretched.

There is speculation that many could impose a 1.99% rise, while others are looking at pushing up the waste and transport elements - which lawyers suggest may not be included in the cap.

Writing in the Daily Telegraph, Mr Pickles warned that "those who put up their stealth tax by 1.99% in a bid to avoid our 2% referendum threshold need a reality check".

"We will take into consideration anybody cheating their taxpayers," he said. "Anybody using loopholes will lose out next year."

He went on: "What residents really want is cuts to taxes not bin collections; potholes filled not pockets. Councils that put their people first will get the idea. To those that don't we're sending out a message loud and clear. The days of the knee-jerk tax and spend hike are over."

Mr Pickles said he was not completely opposed to tax rises - but insisted council should have to win the public over.

"Authorities have a duty to support their residents," he said. "I don't have a problem with councils that want to put up council tax if they have a good reason, to fund local opportunities.

"If the public believes you've got a sensible case they might well listen. But councils should also stop treating residents with contempt."

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