Local authorities across the Isle of Man are warning that a controversial clause in a government Bill could lead to significantly higher rates for households and businesses - with low-income residents and pensioners hardest hit.

Local Government (Amendment) Bill is due to receive its final reading in the House of Keys on Tuesday (January 13).

Under the provision of its clause 5, central government would be allowed to impose new duties on local authorities by regulation, including requiring them to fund or deliver services, without the need for new primary legislation or guaranteed funding.

Critics say the clause, which was not in the original Bill but was added in a House of Keys amendment by Ramsey MHK Lawrie Hooper, would create an ‘onerous financial burden’.

But proponents, including Infrastructure Minister Dr Michelle Haywood, say it will prevent local authorities from ‘walking away’ from services.

When the Bill came before the Legislative Council in November evidence was received from more than a dozen Commissioners boards and Douglas City Council who all oppose the move.

MLCs subsequently voted to introduce new safeguards and protections. These aim to ensure local authorities are consulted before any such changes are made, and financial impact reports provided to show how functions will affect their budgets.

But this has not gone far enough to allay the concerns of local authorities.

They warn that clause 5 could result in significantly higher rates and reduced local accountability.

And they argue that taxpayers who are also ratepayers could effectively end up paying twice for the same services.

With a general election approaching, they say it is vital that MHKs fully consider the real-world impact on ratepayers before the Bill receives final approval.

A spokesperson for one local authority said: ‘This is not about resisting reform. It’s about who pays, who decides, and whether households end up footing the bill.’