Council tax capping - Warwickshire Web

Council Tax Capping

Capping is a mechanism which allows the Secretary of State to limit the amount an authority can spend if he/she believes the locally set budget is excessive. Excessive can be defined as meaning the year on year change or the cumulative increase over a number of years. In 1998 the Government abolished “crude and universal capping” though they did retain reserve powers.

In 2004/2005 for the first time the Government used their reserve capping powers under the Local Government Act 1999 to limit excessive increases in council tax made by seven local authorities. Each year the Government will specify a variety of criteria depending on the functions the authority is responsible for, which, if exceeded will lead to capping. The Government announced, in the 2007 Comprehensive Spending Review, that it was expecting council tax increases to be below 5%, and for 2010/11 it expects the average council tax increase to be below 3%. Once an authority is designated for capping it has 21 days to make a case to Government for breaching capping levels. At the end of the 21 days the Secretary of State will determine the notional amount (taking into account any challenge by the local authority) and notify the local authority. It would be expected that this would take place shortly after nomination, around June or July.

In 2010/2011 we have set a Council Tax increase of 2.4%.

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