As councils across the country wrestle with this year’s Council Tax dilemma, here’s just one example of the dynamics involved.
To Raise or not to Raise? That’s the burning question to be answered early in 2012. Should Stockton Council accept the bribe on offer from the government to keep the Council Tax at the same level as last year, or ignore the offer and raise the tax?
On the surface it sounds like a no-brainer. Why wouldn’t we vote to keep the tax at the same level as last year when all around us residents are having to find more money to pay the gas, electric, housing and food costs? The government will hand over the equivalent of a 2.5% rise in the tax – what’s the problem?
The problem is that this borough, even under Conservative and now Labour leadership, has for years had a policy of planning ahead on a rolling three year financial plan. Three years ago senior officers saw the writing on the political wall and warned that post-election there would be huge cuts in local government finance.
The financial and political planning of the council started to prepare the ground for surviving those cuts. Last year a spanner was dropped into the works – a freeze on council tax with a grant to cover the gap for that year. Stockton council assumed that would be a one-off and planned an indicative budget to include a 3.5% increase in Council Tax in 2012 and 2013. So, if the council tax isn’t raised, and the grant is only maintained at last year’s level or reduced, then the black hole in the Council’s finances just increases. Bigger than planned cuts in services will have to be made and that will mean more redundancies, poorer pavements, and who knows what else? The council has a programme of looking at every aspect of its services and checking Value for Money and Need.
So, as Liberal Democrats, whose votes will not make a difference on the night (such is the arithmetic of the council), do we act with fiscal prudence and vote to raise the council tax to a level which will enable services to be reduced gradually and in a well planned way, explaining it to our readers in Focus? Or, do we act with political expediency and vote for the thing which will sound good to most of the voters who don’t know and don’t want to know the detail of local government settlements?
That is the question for debate in the New Year. Meanwhile, Happy Christmas one and all!
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12 Comments
In opposition I would have thought this is a clear no-brainer
“In opposition I would have thought this is a clear no-brainer”
How depressing. No room for voting for the right thing, then? I think Maureen’s right to raise it, right to think it out; and possibly (but only just possibly) wrong that most voters will want to punish them for voting to (as far as possible) maintain services.
Malcolm, thanks for the encouragement. We don’t have elections (barring accidents) till 2015 when I think our local arguments will be swallowed up in the larger fight for the Westminster vote, so thinking about doing the right thing is perhaps a luxury we can use this year.
How can raising council tax when we are heading for another recession be right ?
libby: “How can raising council tax when we are heading for another recession be right ?”
Well, if it’s to pay for services that make a real difference to people’s lives — especially those hit hardest by the recession — that might do it.
For 2012/13 there will be a 1% gap in funding. For 2013/14 onwards, the 3.5% you would have added to your base council tax receipt will be there forever. By 2015/16 you will have lost around 10% of your council tax receipt in 2011/12.
In part the answer depends on what proportion of your total income is raised through council tax receipts, how large your other cuts are, and whether there is “fat” to go for such that you can afford to make those savings with minimal impact on services that matter.
Thinking “what is best” very much depends on the impact on residents of the additional cut compared with the impact of the extra council tax payment. Neither is easy to measure.
Thinking “politically”, you are looking at opposing whatever the ruling group propose, but with a constructive alternate position. So, they propose an increase; you plead the case for cutting overhead costs, protecting services, and saving the poor council tax payer. They propose a freeze, you protest the impact the additional cuts will have on the frontline and how iniquitous it is to save the rich some money by attacking services to the poor.
But your use of the word “bribe” suggests you really agree with your Labour group on this…
Why not hold a referendum and let the people decide ?
What would you do in power? Do that. As long as its costed and you can explain your reasoning. For example if you think that the government may well offer this bribe again each year, model the impact of the different decisions that could be taken. The best for the taxpayer might be a hike this year followed by a few years of maximum rebates.
This is a valid debate and its an issue which we should all consider.
My general view is that most, but not all, council tax payers think they already pay enough/too much in taxes and that they think that taxpayer funded institutions should look to what they spend in the first instance before seeking increased tax revenue. For me that means expenditure on back office functions, not on front line services. Councils that spend large sums on communications departments, policy officers, business improvement and information provision, advertising, printing and photocopying, consultants and other such items should look at what cuts can be made in those areas of expenditure first.
The dilemma we always have is that the Council has, thanks to very good officers who convinced Labour and Tory leaders they thought of the idea first, run a fairly tight ship for a number of years. Even then, millions have been cut from the budget over the last two years through cutting services that were “extras”. Now in committees reviewing spending we’re looking at things that most people don’t see as extras.
We’ve managed to have a review of councillor allowances which is going to save money if it’s accepted by full council, so we have a small success as an opposition group but it’s token!
Constructive opposition gets harder, but I guess if we wanted an easy life we’d be in one of the big parties. Thanks for the debate everyone.
There’s no point worrying about the effect on the voters. I would imagine most of the LD councillors will lose their seats whenever the elections come. So vote for what you think is right. As you probably should anyway.
To be honest, I think it’s a no brainer. Council Tax is an unfair and unjust tax that hits the hardest. We have a moral duty to keep it as low as possible to cause the minimum amount of misery to poor and vulnerable residents. The government is offering a grant equivalent to 2.5% if you don’t raise council tax this year. It may or may not cause issues in future years (although the government has rolled over last years freezing and in my opinion is likely to do so again) but for now you are not hitting residents with a council tax increase when their wages are frozen and inflation is at 5%.
The council officers will want to build up reserves and financial cushions to stop painful cuts to themselves. At Northumberland council we have cut over 1,000 jobs from the structures and saved tens of millions. No libraries, Sure Starts, Leisure centres or recyling centres have closed and we are able to invest £20m in a new leisure facility in Ashington and a programme of £26m investment in our libraries and customer service centres. We have to make a further £30m of cuts over three years and I’m confident further savings can be found.
We have to weigh our moral duty to provide a service with our moral duty to minimse the harm from the unjust on the vulnerable. If you have a longstanding Labour council, typically there is a lot of hidden waste in the structure that can be saved, meaning (for the first few years at least) you can square the circle.