Low interest rates could add £50 to the average Council Tax bill - Goldsworthy
Low interest rates for council investments could lose councils almost £900m compared to last year, the equivalent of £50 on the average Council Tax bill, research by the Liberal Democrats has revealed.
Draft data from the Chartered Institute of Public Finance and Accountancy (CIPFA) on local authority investments in 2007/08 suggests that the average rate of investment on all external investments in England and Wales was around 5.58%. South Yorkshire has budgeted for an investment return of just 1.5% on investments in 2009/10 compared to budgeting for a return of 5% on investments placed during 2008/09.
Commenting, Liberal Democrat Shadow Local Government Secretary Julia Goldsworthy said:
“This will put even more pressure on people paying the already high Council Tax.
“Many families are struggling to pay the bills and any increase in the Council Tax could be a burden too far. The economic crisis is hitting household and council budgets from every angle.
“The real problem here is that the Council Tax hits those who can least afford it, like pensioners, the most. Because of this unfair system, any attempt to protect local services from cuts through Council Tax rises will put more and more pressure on low income households.
“We need to scrap the Council Tax and replace it with a fair tax based on ability to pay.”
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