9.3 The Secretary of State has announced that Council Tax increases in excess of 3.5% will have to be supported by a positive referendum result as a replacement to the previous capping regime. This seems unfair to Council’s with low tax levels as they will effectively be caught in a “poverty trap” of very small cash increases thus requiring higher levels of service reductions than in the high taxing Councils. The Leader has therefore written to the Secretary of State proposing that the referenda limit be based on a cash sum equivalent to a percentage of the average District Council level.
Low taxing/Low spending councils will not be caught in a "poverty trap". Low taxing/High spending Councils are caught in a trap. That was the same with capping. Unlike capping HDC has a way out of this situation by holding a referendum and letting the electors decide on whether they want to pay a higher Council Tax rate. This is what this Conservative run Council wants to avoid because they don't think the electors want to pay more!
As is says further on:
9.5 Overview & Scrutiny recommended that the Council should not accept the freeze grant as future referenda limits may prevent the Council ever being able to increase its Tax level to compensate for the freeze.
If the Conservatives want to up the Council Tax to a much higher rate they need to have the balls to hold a referendum. This, of course, will mean they will have to face the electorate which this council doesn't want to do. The Conservatives have already won the next election. Yet they are trying to find ways around putting this issue to a binding referendum.
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