BARROW BOROUGH COUNCIL TAX HIKE ROW ERUPTS

First Published by: North West Evening Mail

A GOVERNMENT MINISTER HAS BLASTED LOCAL POLITICIANS FOR INCREASING COUNCIL TAX IN BARROW.

Members of Barrow Borough Council voted on Tuesday to increase Council Tax from April by 3.49 per cent. The administration said it needs to respond to government cuts on a long term basis, and the Council Tax freeze could not be guaranteed throughout the three year period, so tax has to be raised gradually to protect town hall services and keep job cuts to a minimum.

But over 300 authorities in England (around 80 per cent) have chosen to accept the Council Tax freeze. The move to increase Council Tax has been condemned by local government minister Bob Neill. Mr Neill said: “Every local resident will be dismayed by Barrow Borough Council’s decision to dodge a referendum by raising Council Tax next year to a hair’s breadth below the level that would give taxpayers a democratic vote.

“Turning down our £108,789 grant which allows Barrow-in-Furness to freeze Council Tax is enough of a kick in the teeth at a time when residents deserve a cost of living break. It’s a cynical move that is simply treating the local electorate with contempt. The council can expect voters to show their displeasure at the ballot box.” At Tuesday’s meeting Barrow Borough Council leader, Councillor Dave Pidduck said his group had chosen to reject the Council Tax freeze as they are preparing a long term strategy. He said: “We asked the officers of this council to prepare all the figures for us so we could weigh up what accepting the Council Tax freeze would mean.

“We asked what would it mean for the people of this borough and the council. They produced a set of neutral figures and then we took the decision.” All six Conservative members of the council voted against taking the freeze, and accused Labour of going against their pre-election promises. Councillor Ray Guselli said: “We simply must stop spending other people’s money and reduce local taxes. “This Labour council has even denied the public a proper say, by increasing Council Tax a ridiculous one hundredth of a per cent below the amount which triggers a referendum. “Perhaps they don’t want to hear what people say.”

Speaking after the meeting, Councillor Brendan Sweeney said the decision had been a tough one but was a result of the tough government cuts. He said: “It is not a fair choice. The problem we have got is that the government cutbacks are so big. “We are losing £12m, although have been given a transition grant of £4m but we have to spread this right through to 2015/16 because by then our government funding will be almost halved. “We are always conscious this is public money, but it is the public’s services that we have to provide and protect.” Leader of the opposition, Councillor Jack Richardson, said the refusal to take the grant proves the council is out of touch.

He said: “The national perspective is that we are out of sync. “Over 80 per cent of authorities are taking the grant. “They (Labour) had made their minds up that they were going to put up the rates and increase charges. The increased charge means they will bring in an extra £448,000 which is equivalent to a 10 per cent increase in the rates.”

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COUNCIL TAX FREEZE SPLITS TORIES

First Published by: BBC

COUNCIL TAX FREEZE SPLITS TORIES

The government's drive for a Council Tax freeze has brought tensions with council leaders to the surface. Tory council leaders have long been privately voicing their exasperation and that's putting it politely - with Local Government Secretary Eric Pickles and his handy hints and tips as to how they should be doing their jobs.

This centres on what they would see as his overly optimistic view of their ability to maintain essential public services in the face of dwindling finances. The government's drive for a country-wide Council Tax freeze next year has brought these tensions to the surface. Mr Pickles is offering councils a one-off payment - equivalent to a 2.5% rise in their Council Tax - if they agree to a freeze for the coming financial year.

Ministers, of course, have no power to enforce a freeze. Indeed there are few things they like talking about more than all the decision-making powers they are returning to local communities.

Balancing act. 

At the same time Mr Pickles - and his lieutenant Local Government Minister Bob Neill - are making it quite clear that in their opinion councils have a "moral duty" to take the money and freeze the Council Tax. Not to do so, they say, would be a "kick in the teeth for Council Taxpayers" and to "treat the local electorate with contempt".

So it's not a great time to be leading a Conservative council which takes the view that it can't balance the books without putting up Council Tax. South Hams District Council leader John Tucker is one of many council chiefs facing new challenges

Most Tory councils are toeing the line. But authorities like Surrey County Council and South Hams District Council in Devon are kicking back. Surrey is implementing a 2.99% increase. So councillors there clearly don't feel the government's 2.5 will even cover this year - let alone the longer term.

South Hams is putting Council Tax up by just 2.5%. On the face of it, this is more puzzling: wouldn't it be cleverer to accept the government's generous offer, give your electors a little Council Tax holiday and then put up Council Tax the following year if you really felt you had to? It's not that simple, though, for councils like South Hams or Surrey. They clearly see Council Tax as something which - like hot air - has an inexorable tendency to rise.

Accordingly, their financial planning is obviously based on at least a vague presumption of cumulative increases in the years to come. South Hams' 2.5% increase will roll over automatically into the council's base funding in the following year and the years after that.

Taking Uncle Eric's short term shilling would have thrown things into disarray because the money simply wouldn't be there to roll over into the next year. A council could, in theory, simply whack up the Council Tax the following year to fill the hole. This, though, would present a major headache in practice. Maintaining the funding level provided by the expired government grant would mean a 2.5% Council Tax rise just for starters.

Throw in the additional rise calculated for that year itself (let's say another 2.5% or so for the sake of argument) and the council would be in real trouble. Demanding an increase of 5% or more from taxpayers at one fell swoop would have run the risk of capping under Labour. Now, councils face an even more formidable obstacle: any increase above 3.5% would have to be subject to a local referendum. And the government has made it clear that threshold could change in future.

Eric Pickles reportedly told the Local Government Association's finance conference that refusing the Council Tax freeze money because it would not be part of the base funding in future years was a "ludicrous argument". Not because the proposition is untrue, but because the "whole idea" of the freeze is to get councils' financial bases down.

That would seem to leave those Tory councils with their hearts set on year on year tax increases in direct ideological conflict with their colleagues at Westminster. That's one of the points I put to South Hams District Council leader John Tucker this week in the film below.

We also touched on a general feature of the government's much-trumpeted localism agenda. On the one hand, ministers going out of their way to bang on about local authorities having the freedom to make the judgements they see fit.

But, on the other, making it emphatically clear what they think those decisions should be and publicly excoriating those councils who dare to use their freedom to disagree. 

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LOCAL AUTHORITIES PLANNING BIG COUNCIL TAX RISES TOLD TO HOLD REFERENDUMS

Published by The Guardian

The communities secretary, Eric Pickles, has announced that any local authority planning to increase Council Tax by 3.5% or more will be required to hold a referendum asking local people to endorse the move.

Pickles described the move as a radical extension of direct democracy, but it is also likely to deter many councils from risking the judgment of their council-tax-payers.

The government says it has set aside £675m for a second year of Council Tax freezes. The Department for Communities and Local Government said if councils agree to the freeze, local taxpayers living in an average band D home in England could save up to £72 a year in Council Tax.

The power to trigger referendums was contained in the Localism Act and in some ways replaces the power to impose caps. Parliament will be asked to endorse the final vote threshold before councils set their annual budgets in the spring. Pickles said: “Since 1997 people have seen their Council Tax more than double, pushing typical bills to £120 a month.

“We are getting to grips with this with another Council Tax freeze deal and by radically extending direct democracy over big bill increases with a new local tax-lock. “Councils have a moral obligation to help hard-working families and pensioners with the cost of living. “If they want to hike taxes on their local residents above 3.5% they’ll now need to get a direct democratic mandate to do it.”

The government also set out its provisional second-year funding settlement for English local authorities as announced a year ago. Councils will have an average spending power of £2,186 per household at their disposal. £27.8bn will be distributed in 2012-13 in a fair and sustainable way across all parts of the country, the department said.

For example, the average spending power per household in Hackney will be £3,050, compared with £1,537 in Windsor and Maidenhead, reflecting the fairness of the settlement, it said. Overall, the average spending power reduction for councils in 2012-13 is expected to be limited to just 3.3%, or £75 per household, less than last year’s comparable figure of 4.5%.

“The second year of our fair and sustainable settlement will mean councils still have on average £2,186 for every household they serve, enough to safeguard the most vulnerable, protect taxpayers’ interests and the frontline services they rely on,” Pickles said.

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TWIN COUNCILS TAKE DIFFERENT VIEWS

First Published by: BBC

TWIN SUFFOLK DISTRICT COUNCILS BABERGH AND MID SUFFOLK TOOK COUNCILTAX DECISIONS YESTERDAY WHICH SET THEM ON DIFFERENT TRACKS.

Babergh decided to increase its Council Tax by 3.5% while Mid Suffolk chose to freeze its demands after a lively debate. Babergh has no overall political control and Mid Suffolk has a Conservative majority. Last year a referendum on a full merger of the councils was lost (a majority of Babergh voters were against). But the integration (we have had joint refuse collections for some time) of services and administration goes ahead.

So both councils had similar advice on which to base their decisions. After a strong debate, Mid Suffolk decided to take community secretary Eric Pickles’s shilling. The government has offered a one off grant, equivalent to a 2.5 per cent tax rise, this year to councils that freeze their demands. That means that a 3.5 increase results in a 1 per cent rise in spending power. And any rise of more than 3.5 percent would trigger a costly referendum.

A report from the joint management board to the Executive Committee of Mid Suffolk in January suggested that accepting the Government’s offer could result could higher rises in the future. Like all local government finance it is a complicated issue, but that report puts the issues as clearly as as I have seen anywhere. Here is the relevant section (full report):

Earlier in the year, the Government announced its intention to offer local authorities a grant to enable Council Tax to be frozen again in 2012/13. The grant will again be equivalent to a 2.5% increase in Council Tax but will only be a one-off (whereas the 2011/12 grant is for 4 years).

Unlike 2011/12, not all councils are likely to take the grant due to the ‘knock on’ financial implications in future years of only receiving a one-off grant. Although the main options appear to be to either take the grant or increase Council Tax by 2.5% (or slightly more), it is important to understand the impacts in future years of different percentage increases in 2012/13. 

A further announcement has been made that any Council Tax increase of more than 3.5% will be subject to a local referendum. A 2.5% increase equates to £3.78 a year for a Band D property (3.5% = £5.29). If the one-off Government funding is accepted, that will have the same overall impact on the 2012/13 budget as a 2.5% Council Tax increase.

The reasons for having a Council Tax increase in 2012/13 and not accepting the Government’s grant of £136,000 are as follows: As the Government grant is a one-off, that amount would then have to be added to the savings that are required in 2013/14. A 2.5% increase in Council Tax just to stand still in 2013/14 would then be needed A 5% Council Tax increase would be needed in 2013/14 or subsequent years to ‘catch up’, but this would be subject to a local referendum, which would be costly.

Not increasing the Council Tax by 2.5% in 2012/13 would mean that there is a lower tax base for future years and the £136,000 is lost each and every year in the future – unless that can be recouped through higher than normal increases in subsequent years, either as indicated above or by gradual year-on-year phased increases e.g. of around 0.8% a year over 3 years.

Suffolk County Council and Suffolk Coastal District Council have also decided to freeze their taxes. But every Council Tax payer in the county faces increases because the police authority precept is increasing by 3.75 per cent and many town and parish councils are pushing up their shares (average rises of nearly 4 per cent in Mid Suffolk).

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SLASHING BENEFITS IS A BREEZE WHEN YOU DISREGARD THE DETAIL

First Published By: The Guardian   

WARNINGS OVER THE UNFAIRNESS OF CUTS TO CHILD BENEFIT AND OTHER PAYMENTS ARE SIMPLY BEING IGNORED BY THE GOVERNMENT

The government is wobbling over its child benefit cut, but problems with the detail were exposed from the off. David Cameron recently went on the record to acknowledge that his plans to snatch child benefit from higher-earners could create rough justice around the edges – edges he is keen to get smoothed. 

The first thought this stirs is the stark contrast between the prime minister's concern with top-rate taxpayers and the abject disregard for the millions of poorer households who will be hit by wider social security cuts.  

Last week the reversal of seven separate Lords government defeats over welfare were rammed through the Commons: closely-argued points that peers had made about protecting vulnerable people were simply swept away. But the coalition's prioritising of the comfortably-off is now well familiar. The second thought about the child benefit wobble, exposed last week by the Institute for Fiscal Studies, is more instructive. Namely, the breezy lack of concern with getting the detail right. As Robert Joyce – the institute's research economist – put it, the precise problems that are suddenly nagging at Cameron were apparent from the off.

The first – in Cameron's phrase – is "a cliff edge". A modest pay rise that just pushes a parent into the top bracket will leave them worse off, as they suddenly lose a payment worth £1,750 a year for a parent of two, or more for bigger families. Cameron's second concern is being unfair to families with one breadwinner. A parent on £45,000 with a stay-at-home partner loses everything, whereas a couple on £40,000 a piece – or £80,000 in combination – will keep the benefit.

The good news is that these snags are, in principle, soluble. The cliff edge could be smoothed by withdrawing benefit gradually as income rises. And there could be a switch from individual to joint family income assessment by merging child benefit into the tax credits. The bad news is that the policy becomes effective next year – and to get such modifications right, there needs to be time to think them through. The latter option, for instance, would represent a U-turn for a coalition that has been hacking away at tax credits; it would confuse broader welfare reforms if it were not melded properly with these.

Having worked in Whitehall, I feel sure officials would have spotted these problems and warned ministers before the policy was set. But even if the civil service failed on this occasion, the IFS flagged up both issues on the very day the policy was announced – and yet ministers initially paid no attention. These ignored problems, remember, affect families on decent wages, most of whom will vote. It seems a safe bet that problems with myriad other reforms affecting the marginalised will not be on the ministerial radar. Half-baked replacements for the social fund and for Council Tax benefit are only two examples of disasters waiting to happen.

The bigger fear, perhaps, concerns the software systems that are meant to start paying the universal credit from next year: glitches could sink the policy. Whispers about this abound in Whitehall but, so far, are only rumours. Certainly, the failure to think through a child benefit cut for the middle classes inspires no confidence about how policy will be implemented when it comes to the poor.

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COUNCILS DEFEND 'FAT CAT' PAYMENT FIGURES UP 13%

First Published by: Burton Mail

COUNCILS HAVE DEFENDED THEIR TOP EXECUTIVES’ PAY AFTER THEY APPEARED IN A LIST OF ‘LOCAL GOVERNMENT FAT CATS’ PRODUCED BY A LOW-TAXATION PRESSURE GROUP.

The Taxpayers’ Alliance (TPA) claimed executive pay in UK town halls was ‘isolated from economic reality’ but the figures in its annual Town Hall Rich List were questioned by councils in the Mail’s circulation area and a union chief. 

Matthew Elliott, TPA chief executive, said: “Taxpayers will be astonished so many council employees are still getting such a generous deal while everyone else in the public sector is facing a pay freeze. Council executives must ensure they have the moral authority to lead necessary spending cuts and in many cases that will mean taking a pay cut themselves.”

East Staffordshire Borough Council chief executive Andy O’Brien was among 658 council employees across the UK to have received remunerations of between £150,000 and £249,999 in the 2010-11 financial year, the last for which figures are available.

But the figure of £151,439, a 17.82 per cent increase from the £128,535 he received in 2009-10, included £15,551 ‘relocation expenses’ to fund his family’s move to the area, a sum which has previously been disclosed. Julia Jessel, the council’s deputy leader, said the TPA figures failed to state that the authority had ‘deleted’ six chief officer positions following a departmental restructure in October 2010, which would save £2.5 million during the current Parliament. 

She said: “This and other efficiency savings have allowed the council to freeze and reduce Council Tax over the last three years.” South Derbyshire District Council, whose chief executive, Frank McArdle, received £133,835 in salary, fees and allowances and pension contributions, disputed figures which appeared to show increases in the cash received by its senior officers.

A spokesman for the authority said the figures in the TPA document related to ‘the creation of a radically reduced management structure’ in April last year when 12 senior posts were reduced to six, saving £2.2 million over five years, while it was ‘not known’ where TPA figures citing unnamed directors — who received £112,500 and £122,500 — had been produced from.

A North West Leicestershire District Council spokesman said the 2.45 per cent increase in remunerations for its chief executive, Christine Fisher, who received £145,856, was accounted for by additional payments she received in her role as returning officer during last year’s elections, and that all its staff were subject to a pay freeze.

Meanwhile, its former head of street management’s 69 per cent increase in payments was due to redundancy costs due to the post being axed as part of a review of its senior management structure, which saw it make savings of £470,000. 

Ravi Subramanian, West Midlands regional secretary for the public sector union Unison, said the Taxpayers’ Alliance had taken ‘a far too simplistic look at a complex issue’ and that councils had to pay the going rate to attract ‘the best calibre’ of senior officers.

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LOCALISM BILL: IN PURSUIT OF LITTLE PLATOONS, PICKLES UPROOTS THE STATE

First Published By: The Guardian

LET LOCAL PEOPLE DECIDE!' SOUNDS FINE IN RHETORIC BUT REEKS IN REALITY. THE CONSEQUENCE IS SERVICES SOLD OUT OR GONE FOREVER

Eric Pickles ... the powers he is conferring on ministers makes them into latterday Henry VIIIs.  Here is a great example of what pollsters call the public's "cognitive polyphasia". In plain language it means we want impossibly contradictory things. As the localism bill returns to the Commons for report stage today, the government should be warned that while people love the Ambridge sound of localism, they deplore the postcode lottery it brings.

Brave would be the politician these days who refused to pay lip service to the localist idea: who could be against local people taking making local choices, until you ask what and how? Labour in power was utterly conflicted, pouring out initiatives for community action while raining down centralised diktats.

Now here comes Eric Pickles, not conflicted but deceiving. Tory devolution hands down responsibility for failing to finance local services, devolving the blame for cuts. His bill squares the problem: if the money doesn't cover all that councils are obliged to do, this bill gives him the power to revoke any inconvenient duty on councils. 

Parliament has painstakingly passed laws obliging councils to do things we regard as essential to civilisation, but this gives ministers Henry VIII powers to strike any of them out at a stroke.

There may be daft regulations on the statute book, but this includes everything from the duty to protect children at risk to providing libraries, free parking for the disabled or enforcing food safety laws – all lumped together as "burdens" that ministers could scrap without further debate. From protecting ancient monuments, wildlife and hedgerows to the mental health act, child poverty act, homelessness act, adoption and children act, the chronically sick and disabled act – hundreds of laws will become open to summary removal.

Labour has no chance of winning its Commons amendment to stop this legislative vandalism, but the Lords may yet rebel. If you find it hard to believe how much of the fabric of social protection could be snuffed out at the whim of ministers, pause to scrutinise the official list of "burdens", listed on the Communities and Local Government website.

This act is a powerful mechanism for shrinking government, amid Pickles' ritual abuse of "bureaucrats" and "town hall busybodies". Let local people decide! Let them vote for councils that provide whatever services they want. That sounds fine in rhetoric but reeks in reality. Recent local elections show that council elections are mainly a barometer of national, not local, politics. If people rarely vote on local issues, they certainly don't get much involved: Ipsos Mori finds one in five people claim they might get involved – but only 2% do, no change, despite years of Labour's community efforts by Hazel Blears and others. 

Of course participation could and should be better, but people know well that most funds – and most cuts – come from Westminster, where blame usually lies for shortfalls in local services. Pickles stopped reform of Council Tax and George Osborne capped it, while the Lib Dems gave up on local income tax. In polls people say they want services to be fair. Equality always trumps local autonomy. Mori's Ben Page says "Fairness is a strong British value. 

They say state provision should be the same everywhere – and the buck always stops at the top with ministers." How extreme is their wish for equal services? Mori found 91% thought the grass in public parks should be cut with equal regularity everywhere. This country thinks nationally when it comes to rights to services.

Unpicking all those laws that protect the weak and ensure citizens can trust the food they eat, the water they drink and the air they breathe goes against the grain in a country where these are part of the natural history of social progress. Francis Maude says centralism never did away with local variation, but just see how extreme his postcode lottery becomes. 

Remember all this happens while the government massively redistributes council funds from poorer to richer areas. The cuts hit the poorest councils hardest – Liverpool worst – and the richest like Dorset are barely touched. Pickles' plan to let councils keep their business rates will make the rich very much richer at the expense of poor areas.

Currently business rates are centrally collected and handed out according to need. Once keeping their own business taxes, the City of London gains £517m, Westminster and Chelsea gain £1.6m each while the great losers are Birmingham, cut by £175m, Hackney by £116m and Liverpool by another £104m. When the government lets councils decide how much – if any – Council Tax credit to pay poorer households, what will rich areas do? Without geographical sharing we stop being a nation in any meaningful sense. But that is the logic of localism: the little platoons all thriving or struggling on their own.

There is more danger in this bill: Sir Robin Wales, the mayor of Newham, also worries the bill will be a charter for the planning corruption it took so long to stamp out. Developers can get up a small local group to front their plan, with unseen backhanders. Meanwhile the bill lets nimbys stop plans for necessary social housing or unpopular services on their doorsteps.

There is more: any small group can call for public services to be put out to tender. Naturally, this is dressed up in "big society" disguise, promising local people can run their community centre or take over their library and leisure centre. The reality is that the door to everything is being opened to "any willing provider", as David Cameron revealed in a recent speech.

Yesterday the head of Capita, the outsourcing company, told the Financial Times he had been assured by Francis Maude that the "big society" would not get in the way of large firms taking the lion's share of contracts. Eyeing one giant £2.6bn contract, he came away saying: "There is absolutely no way on the planet that is going to be let to a charity or a small- or medium-sized enterprise ... the voluntary sector will not be a massive player as they simply don't have the scale and can't bear the risk.

" Exactly that happened with the Department for Work and Pensions DWP welfare to work contracts: 38 of the 40 contracts went to a handful of big firms with success records worse than the jobcentres. So much is being torn up in a whirlwind, with uprooted services outsourced or gone forever. This government is making sure it leaves behind ineradicable change. As Margaret Thatcher disposed of utilities, David Cameron is disposing of the state.

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