Three Conservative council leaders in London have written to Andy Burnham, accusing the Government of “devolving blame” for council tax hikes.
The leaders of Westminster, Wandsworth and Kensington & Chelsea councils say they are being forced to significantly increase council tax or slash services to plug a hole left by cuts to central government funding.
It comes after the “fair funding” review of council allocations resulted in a formula that redirects cash to more deprived areas.
Shadow local government secretary Sir James Cleverly said Londoners are facing a “Burnham penalty on their council tax”.
The Tories are calling for Local Government Secretary Angela Rayner to urgently review the funding changes that they say are “set to worsen the lives of local residents across London and the South East”.
However, a Government spokesperson said they are “fixing an outdated funding system” whereby some of the wealthiest parts of the country “benefitted from exceptionally high levels of government support, while communities facing greater pressures lost out”.
They added that the reforms make the system “fairer for taxpayers across the country”.
In a letter seen by the Press Association, Westminster City Council’s Paul Swaddle, Wandsworth Council’s Robert Morritt and Kensington & Chelsea Council’s Elizabeth Campbell said the Government’s funding formula “punishes low tax councils”.
The Tory council leaders said: “If our councils do not impose council tax rises, our communities face considerable cuts in funding for local services.
“This is not just devolving blame, it is devolving council tax rises and government cuts.
“This is fiddled funding, cooked up in Whitehall but leaving town halls to carry the blame.
“These tax rises are in addition to the new top-up council tax on many homes in our councils – and none of the revenues from this tax penalty will be retained by councils or by the Mayor of London.
“There is nothing local about it.”
Six councils have been granted two-year “funding realignment powers”, which enables them to increase council tax beyond the 5% threshold.
The three Conservative leaders said their councils were “singled out” for this, alongside the City of London, Hammersmith & Fulham and Windsor & Maidenhead.
They argued that the Ministry of Housing, Communities and Local Government (MHCLG) “assumed massive rises in council tax” in their areas to compensate for cuts to central government funding when publishing its Local Government Finance Settlement.
“It’s clearly not a local decision if the tax rises have already been baked into the finances by the Government,” they said.
Tory frontbencher Sir James said “true devolution” cannot mean imposing high council taxes “from on high”.
He told PA: “London’s taxpayers are being forced to pay a Burnham penalty on their council tax.
“The Prime Minister talks a lot about devolution. But by slashing funding for councils with lower tax rates, he is forcing them to raise taxes drastically or cut services severely.
“True devolution cannot mean imposing higher taxes across the board from on high. Burnham should direct Angela Rayner to urgently review Labour’s fiddled funding changes.
“Otherwise his commitment to make lives better in every post code will be a dead letter.”
However, a Government spokesperson said: “We’re fixing an outdated funding system so funding goes where need is greatest.
“For too long, some of the wealthiest parts of the country have benefited from exceptionally high levels of government support while communities facing greater pressures lost out.
“Our reforms will make the system fairer for taxpayers across the country, while protecting councils through the transition and ensuring no area faces a cliff edge.”
The letter comes just weeks after the Prime Minister announced that English mayors will be allowed to keep a share of the taxes collected in their area.
Mr Burnham said allowing mayors to keep a share of income tax and business rates will help to promote growth “in every postcode”.
The council leaders of Westminster, Wandsworth and Kensington & Chelsea claim that “the reverse is happening here”.