Council tax increases despite government incentives

 
Council tax bill The government has asked councils to freeze local taxes for the third year running

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More than 40% of councils in England are planning to increase council tax this year, according to a survey.

This is despite local authorities being offered money by the government to freeze bills.

However the Chartered Institute of Public Finance and Accountancy (Cipfa) survey suggested that the overall average increase would be less than 1%.

The Local Government Association said it had been a difficult decision for councils in the face of cuts.

Local authorities in England are being given extra money by central government for the third year running if they freeze bills.

But this time a larger number of councils are increasing council tax (41%) - last year 85% took up the government's offer.

Tight budgets

Cipfa said 102 out of 250 authorities surveyed planned to put up council tax in April, typically by about 1% percent.

Any increase over 2% percent is supposed to trigger a local referendum - but some councils are finding ways to increase it by more than that without a poll.

These councils have taken legal advice and plan to use a loophole that allows them to increase waste and transport costs by more than the 2% cap. Others have opted to put up taxes by 1.99%.

Start Quote

All councils are having to strike an increasingly difficult balance between protecting hard-pressed taxpayers and maintaining local services”

End Quote Ian Carruthers Director of policy, Chartered Institute of Public Finance and Accountancy

A small number of authorities are managing to reduce council tax by finding more efficient ways to deliver services.

Regional variations included an average 1.2% rise across Yorkshire and Humber, and a 0.1% increase in London.

Cipfa director of policy Ian Carruthers said tight budgets meant councils had to make difficult choices between tax rises and cuts in services.

"Councillors must take council tax decisions based on local priorities," he said.

"As the pressures from this period of unprecedented austerity intensify, all councils are having to strike an increasingly difficult balance between protecting hard-pressed taxpayers and maintaining local services.

"The imminent changes to local authority funding systems are bringing added uncertainty to councils' financial management and making it more difficult than ever for councillors to take the medium and longer term decisions required."

Communities Secretary Eric Pickles said the small average increase across England meant it was "a tax cut in real terms".

'Fully accountable'

A Local Government Association spokesman said: "This has been a tricky decision for councils.

"Collectively local authorities are facing a 33% cut in funding from government at the same time as the cost of providing services like adult social care is climbing through the roof.

"The council tax grant from government is very small when set against those pressures and it lasts just two years with no certainty beyond that.

"Ultimately councils have to take a long-term view. Some have clearly decided that increasing council tax is one way of meeting current costs and alleviating pressure in the longer term.

"Councils are fully accountable to their electorates for these decisions."

The Conservative leader of one council putting up tax - Canterbury City Council's John Gilbey - told BBC Radio 4's Today the government subsidy was for a limited amount of time.

This meant, he said, that when the extra money to freeze council tax ended, "you're still losing that permanent element of a tax base".

He added: "Don't forget we've got no compensation now, ever, for inflation. Our services, cost of services are going up, we're determined to keep a high standard of those services as long as possible, and also, in the end, to keep services going."

Asked about being a "democracy dodger" by increasing council tax by just below the 2% trigger for a referendum, he said that holding such a vote would cost up to £200,000.

He questioned why the government set the 2% trigger level if they were not happy for councils to go up to that figure.

 

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  • rate this
    +21

    Comment number 60.

    49.DaveLEEDS
    I am beginning to think that it would be cheaper to go to prison...
    ---

    You think you're joking but you're spot on. Parole officers are also tasked with getting the criminals a house and a job and any benefits they "need" once released.

    Meanwhile the likes of me have struggled to find employment since being made redundant in 2010 and my household can't keep up with bills!!

  • rate this
    +9

    Comment number 59.

    There is only one fair tax and that is a tax on earnings

  • rate this
    +1

    Comment number 58.

    37 Farkyss- well if they could come up with a solution which stopped those who already avoid paying any tax (I have a neighbour who boasted he pays none since he employed his accountant) avoid paying it again I would wholeheartedly agree with you. I'm not confident it can be done though.

  • rate this
    0

    Comment number 57.

    These councils have taken legal advice and plan to use a loophole
    How much for the legal costs?
    Also loopholes? Second time I have seen loopholes on the BBC site this morning, loopholes are exploited to sell us low grade meat for sausages. Loopholes on tax avoidance, loopholes on MPs expenses .
    Instead of spending so much time looking for loopholes how about just doing your job.

  • rate this
    +4

    Comment number 56.

    It's time they extended the Council Tax bands so million-plus pound houses pay a fair share of the protection they get from police, fire and other services. This has already been done in Wales.

    It would cost about £20 per H-band house to revalue them all and earn a couple of hundred in just the first year from those best able to bear the burden.

  • rate this
    +1

    Comment number 55.

    By the way: Are you all aware that Councils, by law, must now allow their citizens to pay in twelve monthly installments, not ten. Hardly anybody knows about this because the Councils don't want to tell us.

    Make sure you DEMAND that your Council lets you pay your Council Tax in 12, not 10 monthly installments.

  • rate this
    0

    Comment number 54.

    our parish increase= 2.5%
    breckland council = 7.8%
    norfolk county council = 1.95%
    private outsourcing of services- economical?
    tells me that privatisation IS NOT WORKING ECONOMICALLY

  • rate this
    +1

    Comment number 53.

    Everyone is about to get screwed over by this government, it will leave a lot of us very angry, but fear not the same government has given you people to aim your anger at.

    I sit back and wait forr the attacks on people on benefits to begin
    Ho look it already has.

  • rate this
    0

    Comment number 52.

    My rates in 1990 were £140.00 now it's £2200. My bin gets emptied less often, the roads are crap and it took 6 months and a threat of going to the Secretary of State to get planning permission for my barn. Local councils are not short of money they are short of brains and financial acumen. Stop asking them to quit wasting my money and tell them to do it.

  • rate this
    +2

    Comment number 51.

    Why is it that elections do not bring in Councillors with the intention of controlling the voracious appetite of the unelected over paid underworked paper shufflers who slouch around chatting to their colleagues instead of getting work done quickly. Democracy is failing us, as every Councillor wants to spend more on pet projects and then proclaim how great they are to the voters. Makes me mad.

  • rate this
    -10

    Comment number 50.

    Never forget the purpose of taxation is to keep public sector workers in the manner to which they have become accustomed.

  • rate this
    0

    Comment number 49.

    I am beginning to think that it would be cheaper to go to prison. Free lodgings, free heating and food. No council tax applies. Gym membership is also free, what a terrific saving.
    Seriously though, what we need is a shake up f local authorities. Get rid of their free meals and expenses, the waste they create. They CAN make more savings without taxing us more.

  • rate this
    +3

    Comment number 48.

    Indeed. Probably for some useless projects they have in the pipeline. I want Police, Fire and Ambulance services, I want decent bin collections and well maintained roads. I also want clean public toilets and empty bins in my town centre. I don't care about anything else, most people don't so why do the council?

    And stop, STOP trying to make money off car parking. It's killing towns.

  • rate this
    -1

    Comment number 47.

    How much more of this can we take? Elec and Gas prices up, council tax up, fuel prices up, the list goes on... The only thing that doesn't go up is wages.

    I'm beginning to think that all these layabouts who don't lift a finger and live off benefit handouts and get everything paid for them (and seemingly live very happily), aren't so stupid after all.

  • rate this
    +50

    Comment number 46.

    Having started my career in Local Government in 1968 I'm horrified at the enormous salaries being paid at the top of Local Government. Our local Chief Exec as a package of £1/4million because she could get that in the private sector. I'd like to see her try.

  • rate this
    +27

    Comment number 45.

    Have you noticed all the roadworks recently?. . . . . . . . .Yes, it's the last minute rush to use up the rest of last years budget. If they use all the budget for last year, the gvt raise it for them this year. . . . .A lot of the work is not necessary, but done simply to get more cash, that local council's will use to raise their salaries

  • rate this
    0

    Comment number 44.

    10. Mister Point
    "I though the local authorities had a cash pile that they could draw on when times were considered tough."

    They did, but invested into overseas banks that nosedived back in 2008. And you thought only bankers played around with other peoples money?

  • rate this
    0

    Comment number 43.

    @6. farkyss
    NO NO NO/
    Council tax is bad DO NOT REPLACE IT!!!!
    Use central government funding - central income tax. Your democratic choice is HOW it is spent not how much.
    This is massively cheaper than yet another round of form filling, tax collecting and accountants and will save us ALL money (and stop some of the double taxation).
    Scrap ALL other council charges - ALL of them.

  • rate this
    +66

    Comment number 42.

    There's always talk of "We're having to close care services and libraries and make dustmen redundant". Funny how they never seem to moan "We're having to make outreach co-ordinators, diversity managers, municipal art consultants etc redundant".

  • rate this
    +51

    Comment number 41.

    So certain counctils wish to put up council tax. Will I see better services in my area, cleaner roads, pavements that are actually gritted during winter snow (even when councils claim they have ample grit), will I see a greater police present on the streets, and can I expect proper bins, rather than just the old black bin bags ?

    I doubt it...

 

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