Hackney, together with other borough councils, has been urged to resist implementing the Government’s council tax freeze.
The call comes from the UK’s largest union, Unison, which says the measure will create a ‘black hole’ in Town Hall finances.
The union’s opposition has brought into question Hackney’s policy of freezing council tax, which it has done for seven years in a row.
The Chancellor George Osborne has offered councils a grant equal to a 1 per cent increase in their council tax if they agree to freeze the tax in 2013-14. But Unison has warned that the offer is a short term attempt to ‘bribe’ local councils.
“The Government is plunging councils into further economic meltdown,” said Heather Wakefield, Unison Head of Local Government.
“Offering a 1 per cent ‘bribe’ to freeze council tax will leave a financial black hole that can only be filled by cutting more jobs and vital services. It is a bad deal for council taxpayers who are losing quality services and cuts to everything from elderly care to libraries, children’s services and swimming pools,” she said.
Ms Wakefield suggested councils follow the example of Peterborough, Surrey and East Cambridgeshire, who “rejected the freeze grant last year because they wanted more control over their finances.”
A Hackney Council spokesperson said: “Raising the council tax by 2% will result in the loss of the 1% freeze grant, placing the council in exactly the same financial position as if it had frozen the council tax and accepted the 1% grant.
“Any rise in council tax higher than 2% now legally requires a referendum, costing £400,000, which is unlikely to be approved by residents already struggling under the Government’s austerity measures.”