Westminster council plans 'zero' tax bill

A pledge by a top ranking London borough to reduce its council tax charges to zero within eight years has been described as 'barmy'.

The denunciation came from Labour opposition leader Paul Dimoldenberg after Westminster council's Conservative deputy leader, Kit Malthouse, claimed that the local authority's prudent approach to local authority finances could allow it to stop billing residents by 2012.

All that would remain for local residents to pay would be the precepts billed by the mayor of London, Ken Livingstone, and the policing and fire services, he said.

Mr Malthouse first aired his aspiration to the council's managers last week, suggesting that current rates of efficiency savings put the authority on track to meet this ambitious aim.

His comments come ahead of today's provisional finance settlement for local government, which will determine how much central government grant councils will receive to help them keep down their council tax.

While many councils are jittery about the ramifications of the settlement on budgets and subsequent council tax increases, Westminster is demonstrating a relaxed approach to future council tax bills.

Mr Malthouse cautioned that the 'zero' council tax bill was an 'aspiration' rather than a fixed plan. He said a repeat of the ?40m savings the council has made over the past four years could see the council's tax levy dwindle to zero. "We already deliver the best services in the country according to the [comprehensive performance assessment local government] league tables for half the council tax of anyone else," he said.

"We do that by contracting out to the private sector and generally being more efficient in what we do, with an eye on bureaucracy... If we get new powers from government to trade, and if we get a removal of government ringfencing, particularly passporting in education, and if they stop loading us with new responsibilities without the money... there is no reason why we can't drive out of the budget the same amount of savings as the money we raise in council tax."

Mr Dimoldenberg dismissed the claims: "Westminster Conservatives will cost residents a lot of money if this barmy council tax plan goes through," he said. "There is no such thing as a free lunch or 'something for nothing'. If the services are not paid for by the council tax they will be paid for by residents digging deeper into their pockets to pay for increased or new charges, together with big cuts in services.

"It is totally irresponsible for the Conservatives to fuel a 'something for nothing' culture that tricks people into thinking they can pay nothing yet still get vital services," he said.