Mayor faces cap on 7% council tax rise

Ken Livingstone faces having his spending capped by John Prescott after proposing a rise in his share of the council tax of almost five times the rate of inflation.

The Mayor wants a rise of 7.2 per cent to help fund five extra teams of neighbourhood police for each of the 32 London boroughs under the Met's control.

This means that families living in a typical band D home would pay an extra £17.28 to Mr Livingstone from next April.

Total council tax bills, currently averaging £1,119 in London, would rise to about £1,180 after the boroughs increase their demands.

Of this, £259 would go to the Mayor, more than double the £123 when he was elected four years ago.

But Mr Livingstone's draft proposals place him on a collision course with the Government, which indicated last week that authorities failing to keep rises to below five per cent risked being capped.

A spokesman for the Office of the Deputy Prime Minister said: "If the Mayor is planning a 7.2 per cent increase there is a chance he might be capped."

Kit Malthouse, deputy leader of Conservative-run Westminster council, which sets the second lowest tax in London, called for Mr Prescott's deputy, local government minister Nick Raynsford, to intervene.

Mr Malthouse said: "We will be pressing for Nick Raynsford to cap him. It's an absolutely outrageous increase."

Baroness Hamwee, Liberal Democrat budget spokeswoman on the London Assembly, said: "So soon after the Mayor has threatened a massive increase in fares, the possibility of such a hike in council tax will come as a bitter blow for Londoners." Bob Neill, leader of the Assembly's Conservative group, said: "Despite being lower than in previous years, this increase is still a scandalous admission of mismanagement by the Mayor.

"Given Gordon Brown's preelection largesse, Livingstone should take this opportunity to cut the GLA's tax burden on Londoners."

But Mr Livingstone, who was appearing before the Assembly's budget committee today to explain his plans, said he had "every confidence" that the eventual rise would be one of his lowest ever when it is ratified in February.

He said he would search for savings across the Greater London Authority to add to the £119 million of efficiencies identified.

The extra cash will be spent on transport projects such as the East London line extension and the Thames Gateway Bridge, which has received planning permission from Newham council after Greenwich approved it on Tuesday.

The final stage of modernising the capital's 7,000-strong fleet of buses should be completed, with all being fully accessible and fitted with CCTV by the end of 2005.

Mr Livingstone said the existing neighbourhood police - three six-strong teams in each borough - was already "one of the most successful initiatives in London policing in recent times".

He added: "In the local communities served by these teams, crime is down and public confidence in their police is up. Burglary has been reduced by an additional three per cent in safer neighbourhood areas, while theft is down by five per cent more than areas not served by these policing teams.

"Police levels are at a record high of 30,624, with an additional 1,822 police community support officers."