The National Association of Local Councils (NALC) has accused Mid Sussex District Council of withholding Government funding from parish and town councils.
Nationwide NALC has identified just 17 councils which are refusing to pass on £3.8m of Government funding to parish and town councils, defying advice from local government minister Brandon Lewis MP.
The Association is urging them to rethink their “short-sighted decision”.
Speaking at NALC’s ‘What Next for Localism?’ conference, local government minister Brandon Lewis MP, said: “I do recognise the challenges that you (parish and town councils) face and I know some of you have concerns about dealing with the impact of the localisation of council tax.
“I’m really determined to make sure that the money is passed on and we’ll do all we can to support you to make sure it’s passed on.”
Mid Sussex is the only local authority in Sussex named and shamed by NALC, which states parish and town councils have been forced to consider cutting vital services for their communities or to increase their precept (tax charged by parishes on residents) as a result of decisions out of their control taken by another tier of local government.
Cllr Ken Browse, NALC’s chairman, said: “The vast majority of billing authorities have paid over funding to parish councils but I remain bitterly disappointed in the short-sighted actions of 17 authorities refusing to pass on any funding to parishes in their area, which undermines relationships between tiers of local government.
“This must not happen again next year, I am strongly urging government to identify this funding in the financial settlement and consider either introducing statutory guidance or funding parish and town councils directly.”
Parish and town councils in Mid Sussex have not been forthcoming in their criticism of MSDC’s decision, except for the Labour group in Burgess Hill.
They claim taxpayers in Burgess Hill will have to find almost £30,000 after the district council failed to pass on money to the town.
Leader of the Labour group cllr David Andrews said: “This seems to be typical of the way in which Burgess Hill is treated by the district council.”
Mid Sussex District Council declined to make any comment when Burgess Hill Labour group initially raised the issue, but upon NALC’s public admonishment Peter Stuart, MSDC head of finance, personnel and CenSus ICT said: “Last year, the Government made significant changes to the system of Council Tax Benefit.
“We’ve worked hard to help town and parish councils with the change to the new system, including providing transitional funding last year.
“Town and parish councils were aware that this funding was only available for the first year and planned ahead with this in mind when setting their budgets for 2014/15.
“The district council has maintained grant funding to town councils for the provision of a number of community services and is actively supporting town and parish councils with the preparation of neighbourhood plans.”