Labour town halls vow not to rock boat on council tax

In a remarkable display of party loyalty, most Labour big city councils, including many former citadels of the hard left, are planning to keep 1997's council tax increases to a minimum in order to avoid the charge of Labour "profligacy" in the critical pre-election period.

Council tax will still rise by around 6 per cent - at least twice the rate of inflation. But this is less than even the Government expected on the basis of its November Budget, which implied council tax rises of 8 per cent this year and similar rises next year and the year after.

Cuts look likely to fall heavily on street repairs, home helps and other social services. Libraries and education support services may also be hit, though Labour councils are making strenuous efforts to support the party's emphasis on education by protecting teachers' jobs and classroom spending.

The Government will today lay before Parliament its Revenue Support Grant orders for the financial year 1997-98. The squeeze on councils will tighten if the teachers' pay review body, due to report after the RSG orders are approved, recommends a education pay rise of more than the 2.8 per cent most councils have allocated.

But to avoid damage to Tony Blair's election campaign, Labour councils have promised Sir Jeremy Beecham, the chairman of the Local Government Association, not to make too much of a fuss about the cuts they will inevitably have to make. Their watchword is the New Labour slogan adopted by Theresa Stewart, leader of Birmingham and once a left-wing stalwart: "We must be realistic about the resources available." In Birmingham's case that looks as if it will mean 350 posts being cut.

Solidly Labour Sheffield is probably typical. To keep the services it is providing this year going into 1997-98, it would need pounds 12m more than the pounds 415m government limit it has been set. But whereas in previous years, a senior official said, "there would have been a feast of shroud waving, this year they are taking it on the chin". Sheffield will be dirtier as a result: the cuts will fall on waste disposal and street cleaning.

Birmingham is even considering selling off its stake in Birmingham International Airport in order to minimise its call on council tax payers.

It is a different picture in the shire counties, especially where no single party has overall control. Bedfordshire - where the Tories are the largest party but are outvoted by combinations of Labour and Liberal Democrat councillors - says it faces cuts of pounds 15m and is thinking of putting through a 21-per-cent increase in its council tax precept. Overall, the English counties may shed some 50,000 staff to make ends meet.