THE leader of Swindon Borough Council has backed calls to remove the cap on council tax increases.

In 2012, the government introduced a rule which means that any proposal to increase council tax by two per cent or more in England must be put to a local referendum.

Coun David Renard’s comments come ahead of a speech later today by the chairman of the Local Government Association, Lord Porter, in which he is expected to call for the referendum principle which stands in the way of excessive tax increases to be dropped.

Lord Porter will address the annual meeting of the LGA at its conference in Birmingham. With all councils facing unprecedented financial challenges against a backdrop of increased demand for statutory services and reduced support from central government, money is expected to be high on the agenda.

He will use his speech to demand that local authorities are put at “the front of the queue” for new funding if “austerity is coming to an end”.

The LGA is also calling for councils to be allowed to keep all of the £26bn in business rates collected locally each year – government plans for this to happen are in doubt after the Local Government Finance Bill, which was passing through parliament before the election, was not reintroduced in the Queen’s Speech.

On the call to scrap the referendum on council tax increases, Coun Renard said: "This has been LGA policy for some time now.

"I sit on the resources board and it is something we discussed, we felt local authorities should be in a position to make those decisions themselves.

"These things shouldn’t be dictated to them by central government."

While the fear of residents would likely be that the removal of the cap and the referendum principle would result in sudden steep increases, Coun Renard said he doubted that would be the case.

"There is a political element to this," he said.

"Conservative councils don’t like to tax residents any more than they need to so they would look to keep increases as low as possible.

"But demand is continuing to increase, all top tier authorities continue to have huge pressure on budgets.

"If government takes the view that things such as social care are to be paid for by local authorities then that will be reflected in the council tax."

Coun Renard also backed calls for greater clarity from the government about whether their plans for business rate retention are still on track.

"Nothing is coming out from central government on the subject," he said. "We do need clarity, but business rate retention was never going to be answer to all our problems on the basis that we were expecting government to devolve further services to local authorities at the same time.

"What it would have done is give is more certainty and that in itself would have been a good thing.

"In order to plan our finances for the next two or three years we do need some clarity."