HDC whines on about a Poverty Trap

In the budget report to Cabinet the following is stated:

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.

But Councils which are low tax/low spending shouldn't have a problem. The problem is HDC is a low tax/high spending Council. It is still spending reserves to keep the budget from falling apart. Capping has ended. Under the capping regime HDC was caught in the "poverty trap" anyway. Now HDC has a way out! HDC could hold a referendum. But won't. Mainly because the Conservatives don't have the balls to put this to the voters.

The report goes on:
9.5 Overview and 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.


The only way to get out of the problems that HDC faces is to get a budget together and put it to the voters. HDC is deluding itself about the "poverty trap" case. Unlike capping there is a way out of the "poverty trap" and that way needs the approval of the electors through a referendum.