The Government stands accused of scuppering a £1bn investment in Leeds’s transport network with a new law forcing council chiefs to hold an annual referendum if they wish to fund it through council tax rises.
Labour have accused Ministers of “reneging” on last year’s Leeds ‘City Deal’ which gave council leaders the power to add a small levy on council tax bills in order to fund a massive investment programme in local roads and railways.
“The Government signed City Deals to improve transport infrastructure and boost local growth by allowing specific transport authorities to raise money for specific schemes,” said Labour’s Shadow Local Government Minister, Andy Sawford.
“A year on, that agreement is being torn up. It is damaging for our cities and our economy.”
When the Leeds ‘City Deal” was announced in July 2012, it was hailed by Ministers and council bosses as a “transformational” moment for the regional economy. For the first time, West Yorkshire transport authority Metro would be allowed to put a small levy on council tax bills to create a 10-year investment fund to spend on local roads and railways.
Council bosses across West Yorkshire had already drawn up a list of more than 30 major projects which they hoped to enact over the coming decade, including a raft of station and city centre improvements in Leeds, several new link roads and bypasses, a new carriageway to Leeds-Bradford Airport and an extra motorway junction to relieve congestion on the M62.
But a new Bill passing through the Commons states any such levy which pushes a council’s annual increase in council tax above two per cent must now be put to a local referendum.
Leeds City Council leader Keith Wakefield said the move would leave the scheme effectively dead in the water.
“This is extremely disappointing,” he said.
But Local Government Minister Brandon Lewis insisted the Leeds plan will only raise council tax bills by up to 0.9 per cent.
He therefore suggested the council must manage to keep its own individual council tax hikes down, so that the scheme could still go ahead.
“The largest estimate for a city levy in Leeds is still well below the two per cent referendum principle,” he said.