THE leader of Darlington Borough Council has given his reasons for increasing council tax by 1.94 per cent for the coming year, arguing that the authority has been penalised for keeping rates low for years.

Councillor Bill Dixon said his Labour group had produced a medium term financial plan (MTFP) that would protect the services people in Darlington held most dear, while also providing an ‘exit strategy’ for facilities and services the council could no longer afford to provide.

The opposition Conservative group voted against the council tax increase, with some abstentions, and argued that the MTFP was ‘unsustainable’ and full of financial risk.

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The council tax increase of 1.94 per cent, which was passed with a majority vote of Labour and Liberal Democrat councillors, was just under the two per cent cap imposed by the Government unless a local referendum was held.

In his opening speech to the full council meeting, Coun Dixon argued that those local authorities that had been frugal by keeping council tax rates low during the boom years were being ‘shafted’ by the two per cent cap.

He said: “The whole system is flawed. The Government has never held a referendum when it wanted to increase VAT or income tax.

“If we charged the same for council tax as the highest precepting authorities in the North East we would have an extra £4m to £6m in our budget.

“Because we kept rates low, we are able to generate less with a two per cent increase than those authorities who already have a higher rate and are able to keep their position.

“Local government needs to ensure its financial basis is strong. The Government could have given us more time to do this [make budget cuts] rather than this slash and burn.”

A number of Conservative councillors spoke generally against the medium term financial plan and refused to support the measures within it, although none addressed the council tax increase specifically.

Tory councillor Alan Coultas said: “The immediate priority is to produce an MTFP beyond one which feels very much like wishful thinking and not a hard-headed operational plan showing clearly how targets are going to be achieved.”