ANY moves to end council tax capping would be warmly welcomed in York, the city's council leader said today.

Coun Steve Galloway said the "lottery" which resulted from Whitehall council capping decisions were a "distraction" to authorities which "need to be able to devote all their attention to providing good quality services".

City of York Council's leader was speaking after a new report from Sir Michael Lyons, commissioned by Chancellor Gordon Brown and former local government chief John Prescott, said authorities should be able to raise council tax by as much as they wanted.

He questioned decisions to "cap" increases while central Government claimed to want to give local authorities more control over decision making.

Sir Michael said Ministers should let councillors "act as local government rather than handmaidens to central Government".

His final report is due in December.

Coun Galloway will meet Government bosses tomorrow to discuss the decision to designate York for capping.

Whitehall objected to York's budget increases and its decision to set its council tax at 5.49 per cent. The Case For York, the dossier sent to the Government objecting to that decision, argues that this year's council tax should remain as it is, with a 4.5 per cent rise imposed next year.

The dossier included an open letter from The Press to Prime Minister Tony Blair urging him to drop the capping threat.

Coun Galloway said: "We would welcome any proposals to end the secretary of state's council tax capping powers. Operated retrospectively, they are a lottery and a particular distraction for local authorities who need to be able to devote all their attention to providing good quality services.

"There is no way that civil servants in London can be the best people to judge whether a council is providing value for money accountability to local council taxpayers.

"Councils should provide clear information about options before setting their tax levels so that residents can understand why and how decisions are being taken. They should also have easy access to relative performance statistics which compare different local authorities.

"Most of all, the present system should be reformed so that local services are paid for through income tax, a system based on people's ability to pay.

"We hope that is what the Lyons inquiry recommends and that reform is introduced quickly."

Updated: 09:21 Wednesday, May 10, 2006