COALITION HYPOCRISY LIES BEHIND THIS WAR ON MOTORISTS

First Published by: The Guardian

CAPPED AND CUT BACK, LOCAL COUNCILS CAN'T RAISE MONEY BY ANY OTHER MEANS, SO IT'S NO SURPRISE THEY PICK ON CAR DRIVERS

A Westminster warden. For most of the last decade Westminster has raised more from parking than it has from Council Tax. I do not live in Westminster, but I declare an interest in its parking policy. At evenings and weekend I drive to the gilded city regularly, regarding the libertarian freedom to park as a boon and a blessing to life in London. 

It is an asset alike to West End businesses, visitors and those who work unsocial hours. It leads to no noticeable gridlock. It causes no harm. As of next January the policy is dead – and for reasons of greed, hypocrisy and fiscal distortion reaching far beyond the boundaries of that city. Single yellow lines will be effectively doubled at all hours. 

Car-borne visitors and workers in restaurants and theatre land must pay at a meter or find an off-street car park. Westminster has lost some £10m in fines from the advent of its admirable meter texting service, and wants to recoup it somehow.

Parking fines are big money. For most of the past decade Westminster has raised more from parking on its streets than it has from Council Tax. It is a parking corporation (privatised to a company called NSL) with a local council attached. Its home guard is composed of traffic wardens, who outnumber police on the streets. Its eyes are hundreds of CCTV cameras, marking every illegal U-turn or lane violation. And since the tap can be turned on without any by-your-leave from Whitehall, the temptation to raise ever more money is irresistible, especially as in Westminster most of the victims are unlikely to be residents or voters. 

Many residents hanker after the days when theirs was a quiet, salubrious court suburb. Anything that drives away outsiders, especially tourists, is fine by them. So far, so selfish. City centres depend increasingly on out-of-hours leisure business, and even in London this is now walking a fine line between solvency and collapse. It is hard to imagine a better route to collapse than to load restaurants and entertainments with new labour costs and inconvenience. 

Westminster may be rich, but its businesses and their workers are not, nor are all its visitors, even those who come by car. There is no way that meters and off-street parking can make up for the loss of thousands of single-yellow line spaces. A cardinal reason for Westminster's action is that cars in some shape or form are the chief source of its surplus revenue, indeed almost the only one unregulated by the government. 

The reason is that parking charges are supposedly to relieve congestion, not to raise general revenue. Yet today charges and fines cover almost a third of the city's annual £250m expenditure and are the one area of income not governed by government capping and regulation.

Cuts in central grants to meet national budget targets would, in most countries, be partly eased by local taxation. Local voters might choose to be taxed locally to keep their libraries, school visits, swimming pools and sports grounds. Successive cabinets have sought to court political gain by "capping" such taxes, whatever voters want. Central tax and spend can rise inexorably (and still does) but local taxes are held down by order. Local tax capping is the "fiscal union" that George Osborne wants to see Brussels impose on the Euro-zone states.

There is one quarry for which the fiscal hunting season is always open, and that is parking – and councils have been unable to resist. Drivers in the capital have come to regard the fining regime as licensed mugging. A two-minute overstays incurs a fine of between £40 and £60, and tow-away charges start at some £350, swiftly rising to the point where recovering a car after a week's holiday can cost more than the holiday. The reason is simple. For local councils this is easy money, with no accountability to electors.

Now for the hypocrisy. The coalition transport minister, Norman Baker, this week attacked Westminster for a "vindictive" attitude to parking charges and for its "war on motorists". The charges, he said, were "less about controlling parking and more about raising money for the council". His colleague Vince Cable added his pennyworth by demanding local councils act in a "business friendly" way towards firms struggling with recession. Eric Pickles, the local government secretary, has also been putting pressure on Westminster to abandon its plan.

These are exactly the ministers who are imposing cuts on local councils and yet refusing to let them increase local taxes to alleviate the pain. They know perfectly well that parking is the one domain remaining to local discretion. Paying to occupy a few metres of urban streets is a tax by any other name, but unlike taxes on occupied property it is not restricted by the Treasury.

Such a craze for central control is seriously distorting public finance. Local taxes in Britain are among the lowest in the world, both in number and scale and, because capped, are steadily shrinking. Government's obsession with seeking credit for stopping them going up leads to the absurdity that rich Westminster's top tax band this year is £1,375, while the equivalent rate in Gwynedd, Wales, is £2,900. Property taxes in New York vary with property values at the top end, and can be 10 times as much.

When there is supposedly a housing shortage, it is ridiculous not to allow the tax system to act as an incentive to use living space efficiently. London has the most graceful, some might say lavish, residential property in Europe. Westminster's wealthy residents, thousands of whom pay little or no income tax, pay no more than nominal property tax on what is famously the most easily taxable of assets – their houses. Any house worth more than £320,000 is charged the same. Huge sums of possible revenue are simply going begging by the failure to revalue the top bands.

Government turns instead to motorists. Drivers are fit for Morton's fork: anyone who can afford to drive is assumed to be able to pay ever more. Petrol taxes no longer bear any relation – as once – to road-building but are treated by the Treasury as like cigarette taxes, as a punishment for evil-doing. The rationing of road space is by congestion. Predicting and then meeting forecasts of need may guide policy on railways or airports, houses or hospitals, but not roads. 

They are treated as a sinful luxury, and driving and parking cars on them even more so. Ministers allow councils to levy charges on them with impunity, and then attack those who do so. Hypocrisy.

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.

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AXE COUNCIL TAX BREAKS ON SECOND HOMES, SAYS HOUSING CHARITY SHELTER

First Published By: The Guardian

SCRAPPING DISCOUNT FOR SECOND HOME OWNERS COULD RAISE £42M A YEAR TO TACKLE HOUSING CRISIS, CLAIMS REPORT

Council Tax breaks for second home-owners should be scrapped and the money ploughed into tackling the UK's housing crisis, according to a leading charity. Councils can currently reduce Council Tax for second home-owners by up to 50%, an option offered by one in five local authorities. Four in five offer the minimum discount of 10%.

Taking Stock, a report by Shelter, claims that ending the discount for the UK's 252,000 second homes would raise up to £42m a year. 

Second home ownership has grown dramatically since the 1990s, particularly in rural and coastal areas such as Cornwall, Norfolk and Cumbria, where some claim it pushes up house prices, making property unaffordable for local people. 

"The CouncilTax discount is effectively a tax break for people with second homes which often lie empty for large parts of the year," said Shelter's chief executive, Campbell Robb. "Enabling councils to charge the full rate of Council Tax, or higher, would mean they could raise vital revenue that could be used to deliver affordable housing for local people." 

The report also proposes that councils are given powers to set Council Tax higher than the standard rate for properties that are rarely in use. Shelter's call to abolish tax breaks for second homes has received enthusiastic support from some MPs. "We shouldn't be subsidising the richer people on the Council Tax tree," said Tim Farron, Lib Dem spokesman on rural affairs. "Those people who can afford to have a second home should pay the same amount of tax." 

The call may also strike a chord with the government. Business secretary Vince Cable recently floated the idea of a "mansion tax" on properties valued above a certain amount.

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.

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IS YOUR COUNCIL TAX SET TO SOAR?

FIRST PUBLISHED BY: MONEY.UK.MSN

WITH £54 BILLION MISSING FROM COUNCIL PENSION SCHEMES, BRACE YOURSELF FOR HIGHER TAXES.

Burgeoning pension fund deficits could trigger a sharp hike in Council Tax bills, a tax organisation has warned. Councils across the UK have a combined pension deficit of more than £54 billion in 2010/11, according to new research from The TaxPayers' Alliance (TPA).

Put another way, the UK's 101 local authority pension funds have total liabilities calculated at £186.6 billion and total assets worth £132.4 billion. This difference represents a huge 'black hole' at the heart of the Local Government Pension Scheme (LGPS).

Your share could be £1,125

To put this £54 billion shortfall into context, it averages out at £1,125 for each of the UK's 48 million adults. Ultimately, taxpayers will be held liable for this deficit, so we could be facing some steep increases in our Council Tax bills, plus other local taxes such as parking charges and fines.

In previous research, TPA estimated that a fifth (20%) of all Council Tax is spent on funding employer contributions to the LGPS. In other words, if your Council Tax bill this year is £1,500, then around £300 of this goes towards topping up your local council's sickly pension scheme. As a result, TPA argues that the LGPS is "much more generous than most private-sector pensions and is in urgent need of reform."

The only good news is that this huge deficit fell from £91 billion in 2009/10 to £54 billion in 2010/11, largely thanks to a sharp recovery in share prices. Then again, this is still £3 billion more than the £51 billion shortfall recorded in 2008/09, so things have got worse instead of better since the recession.

20 councils with big 'black holes

According to TPA figures, these 10 councils had the largest pension deficits in 2010/11.

COUNCIL	DEFICIT (£M)	FUNDING LEVEL	DEFICIT PER PERSON
Birmingham	£1,340	67%	£1,292
Durham	£728	63%	£1,424
Hampshire	£718	64%	£554
Leeds	£650	75%	£814
Essex	£633	67%	£448
Lancashire	£629	73%	£538
Glasgow	£625	79%	£1,054
Brent	£582	42%	£2,267
Staffordshire	£568	66%	£684
Sheffield	£563	70%	£1,014

As you can see, Birmingham has the biggest pension shortfall, weighing in at a hefty £1.34 billion, or £1,292 for each of its 1,037,000 citizens. Genteel Durham has the second-highest black hole, at £728 million (£1,424 per head). In third place is Hampshire, with a deficit of £718 million, which comes to £554 per head.

Another problem is that some pension funds are much better funded than others. The average funding level for all LGPS plans is 70% of their liabilities. However, of the top 20 councils, three have assets worth less than three-fifths (60%) of their liabilities. These are Brent (London), with a funding level of 42%, Rhondda, Cynon, Taff in Wales at 53% and Welsh capital Cardiff, with a 58% funding level.

In total, TPA identified 26 councils with funding levels below this critical 60% level. Brent was the worst by far, but other councils with pension-funding problems include Merthyr Tydfil, South Wales (50%), Craven, North Yorkshire (52%), Worthing, West Sussex (52%) and Havering, London (55%).

The biggest bills per head

TPA also identified those councils with the highest pension shortfalls per head of population. These are the 'top 10' in this category.

COUNCIL	DEFICIT (£M)	FUNDING LEVEL	DEFICIT PER PERSON
Merthyr Tydfil	£126	50%	£2,268
Brent	£582	42%	£2,267
Rhondda, Cynon, Taff	£483	53%	£2,063
Gateshead	£391	62%	£2,040
Neath, Port Talbot	£275	59%	£2,001
Hackney	£423	61%	£1,931
Hammersmith and Fulham	£322	59%	£1,899
Newham	£413	61%	£1,718
Blaenau, Gwent	£117	65%	£1,708
Lambeth	£472	61%	£1,660

Merthyr Tydfil has a shocking pension problem, with a deficit amounting to £2,268 per head, which is more than double the £1,125 average I calculated above. Brent is just behind on £2,267 per head and Rhondda, Cynon, Taff takes third place with a deficit per person of £2,063.

While London and Wales dominate the list above, the situation looks bleak across the country. This is a problem for every household paying Council Tax throughout the UK. Indeed, every one of the 434 councils in this survey - from Aberdeen City to York - has a pension deficit, although it's a tiny £3 per head at the Greater London Authority and in Chichester, West Sussex.

Pension promises we can't keep?

Frankly, I find this survey to be deeply disturbing. Clearly, councils with huge pension black holes will have to fill them somehow - and this burden will fall on ordinary taxpayers. However, with Brits struggling to pay their own household bills and pension contributions, it's a bit much to ask them to fork out an average £1,225 extra per person towards sorting out council pensions, too. Hence, Matthew Sinclair, director of the TaxPayers' Alliance, is calling on the government to urgently reform pensions.

"The deficit in the Local Government Pension Scheme remains a ticking time-bomb that's being left for future generations of taxpayers to deal with," said Sinclair. "With an ageing population and a crisis in the public finances, generous final-salary schemes like the LGPS are inflexible and too expensive, and need urgent reform. "Councils should not take false comfort in the improvement in the stock market. Their pension liabilities continue to far outweigh their assets and the situation remains worse than two years ago."

In summary, unless councils take action to increase employee pension contributions, freeze current entitlements, reduce future payouts and increase their retirement age to 65, then taxpayers could be clobbered with yet more rounds of steep rises in Council Tax.

This will not be a welcome move, especially as many councils have already ignored the call by Secretary of State for Communities and Local Government Eric Pickles to freeze Council Tax in 2012/13.

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.

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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 CouncilTax - 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 CouncilTax 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. 

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.

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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.”

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX. 

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SAVING MONEY ON COUNCIL TAX

First Published by: Mortgage Guide UK.

WHEN THE GOVERNMENT INTRODUCED THE COUNCIL TAX IN 1991, THEY RUSHED TO GET HOUSES VALUED.

They outsourced the job to estate agents and other people. Usually, they would make valuations just be having a quick look at the outside of the house and making a best guess about what value it was in.

Since 1991, there has been no re-banding. The effect is that many houses are incorrectly banded leading to a significant number of people paying too much Council Tax.

The easiest way to check is ask local neighbours what band they are in. If they are in a lower band you have a very good chance of not just getting a lower Council Tax bill, but getting a backdated rebate. A friend of mine recently was successful in getting a lower Council Tax band.

Other tips for Saving Money on Council Tax:

• Students Don’t Pay council Tax
• If you live alone, you are entitled to get a 25% discount. Make sure you tell the council though.
• If there is one adult and several students, you are entitled to the 25% discount.
• Renovation. If the house is empty for renovation, you can claim an exemption for up to 12 months.

On a personal note, I really dislike the Council Tax; it is very regressive and takes a high % of my meagre teaching income. I would like to see a local income tax which would be fairer. The thing with the Council Tax is that it was rushed through because everyone despised the poll tax. But, the solution given was not the best.

Other Extreme Council Tax Savings:

Live in an area where council tax rates are low.

Live where council services are run on the basis of good value for tax payers money or where the government subsidy is high. ‘If you’re on a low income, whether you’re working or not, and need financial help to pay your Council Tax bill, you may be able to get Council Tax Benefit. 

Beware of the potential ‘mansion tax’ beloved of the Libdems but also keep an evil eye on Eric Pickles rhetoric or reality on Council Tax 

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.

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