COUNCIL TAX BILLS SET TO DOUBLE

FIRST PUBLISHED BY: MAIN ON SUNDAY

AT LEAST HALF OF ENGLISH HOUSEHOLDS FACE HUGE COUNCIL TAX INCREASES UNDER A NATIONWIDE REASSESSMENT OF PROPERTY VALUES BY A 'BIG BROTHER' COMPUTER.

The Government has tried to play down the effects of the survey of 21m homes, but The Mail on Sunday has learned it will add hundreds of pounds to most bills. The American company which designs the system the Government will use to update property values has been forbidden from disclosing details of the project. But bosses admitted its method of assessing properties nearly always found them undervalued.

Ben Story, the vice president of Cole Layer Trumble, said: 'Generally, we find that most properties have been under-evaluated. It is normally in excess of 50% of the properties looked at. But in some cases, it has been as much as 100%.

'Data is often missing, incorrect or out of date. Some places we have been called into in the States have shown the information to be 50 years out of date. Our process updates this information and typically applies a higher evaluation to the property.' The company has won a £45m contract with the Valuation Office Agency in Whitehall which, in the New Year, will begin its work on what has been dubbed a 'nice home' tax.

Teams of inspectors will record costly home improvements such as loft extensions, double-glazing and conservatories,using aerial and satellite photographs to spot home improvements. Good schools, low crime rates and clean streets will also be taken into account to assess new levels of Council Tax.

Ministers will use the American software to rate a neighbourhood on the quality of local services and the type of people living there. The Tories have described the computer firm's warning of a widespread hike in bills as 'staggering'. And there were further indications that the new assessment will bite hard. In Northern Ireland, where a similar scheme has already begun, residents complained bitterly at being hoodwinked over the size of increases. Some say that their bills have doubled.

The computer software provided by Cole Layer Trumble uses information bought from retail giants and credit card firms, and will allow inspectors to calculate a precise value of a home based not only on its size and features but also its location. Ministers have divided Britain into 10,000 neighborhoods. But these are not based on existing local authority areas and Government officials have refused to disclose where their boundaries lie.

The Government awarded the contract to the American company despite bids from British firms. The headquarters of Cole Layer Trumble is a windowless two-storey building on an industrial estate in Dayton, Ohio. It has no UK or European office and no functioning website. There, the Mail on Sunday was refused entry to an area where teams of programmers were working on the British project. General Manager Jim Keenan said: 'We have been supplying software and consultation since 2003. It has been adapted for use in the UK. We are strictly directed by our contract not to discuss what we are actually doing there.'

Tory communities and local government spokesman Caroline Spelman said she was 'staggered' by the admission of the extent of the increases. 'When homes in Wales were reassessed about one third of them went up at least one Council Tax band,' she said. 'It looks as if the experience in England is going to be even worse. The Government may deny it but the gut instinct of the taxpayer is that this exercise is really about raking in more money.'

In Northern Ireland, bills were previously calculated according to the rental value of a property. Now they will be determined by its value, mirroring the English system. Ministers have claimed that more than half of Northern Ireland residents will see either no increase or a decrease. However, it has admitted that there will be some 'exceptional percentage increases', with some householders seeing up to a fivefold rise in their bills.

The Department for Communities and Local Government said: 'Any claim that this company plays a role in determining Council Tax levels in this country is total garbage. To make any link between a company that have simply supplied a software system and how Council Tax is set is nonsense and irresponsible.'

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COUNCIL TAX: THE NEW BATTLEFIELD

FIRST PUBLISHED BY: THIS IS MONEY

RIOTING OVER THE POLL TAX, OFFICIALLY THE COMMUNITY CHARGE, SHOCKED THE NATION 15 YEARS AGO.

It fatally damaged Margaret Thatcher's premiership, leading to her resignation. There are ominous parallels today as anger over soaring Council Tax bills emerges as a major factor at the General Election. Financial Mail looks at the tax that won't stop rising.

WITH thousands of others, Chris and Kate Wheal marched in protest against the poll tax at a rally in London on March 31, 1990. But the couple had the frightening experience of seeing a peaceful demonstration suddenly explode into violence.

Chris says: 'We were near one corner of Trafalgar Square when there was a mounted police charge. Kate was swept away by the crowd and I was left on a wall, watching fighting erupt all around me.' Though neither was injured, arrested or caught up in the violence, that day still leaves a vivid impression on the Wheals.

'This was before mobile phones and it took hours to find each other again,' says Chris. 'We went back to the square the next morning and it was like a battlefield.' Fifteen years on, Chris and Kate, both now 39, have children Joe, 10, and Molly, 7, and together run a contract publishing business. Ominously, they can see history repeating itself, with Council Tax becoming a running sore for the Government.

Chris says: 'We wanted to protest because the poll tax was unfair. It took no account of ability to pay. The situation is similar today with a rising tax that is not linked to income.' This year, the Wheals will pay £1,199 in Council Tax for their band D home in Lewisham, south London, up 5% on £1,141 last year.

Council Tax is set by local authorities to pay for services. On the average band D home in England, it was £688 when Labour came to office in 1997. It has soared to £1,214 for the year that started on Friday - a 76% increase. Inflation over the same period is just over 20 per cent. In Scotland, Council Tax is up 3.9% this year, with the average band D home paying £1,094.

Wales, too, has seen average bills rise, with added pain coming from a revaluation of property that took effect last week. That exercise has seen about one in three homes move into a higher band. And that is just the start. A similar revaluation is taking place in England over the next two years, with all properties being slotted into new Council Tax bands based on their value last Friday, April 1. Bills based on these new bands will be dropping on doormats in 2007, though details of the revaluation have yet to be decided.

There are two main criticisms of Council Tax. The first is that it is a crude measure of wealth. Properties are split into eight bands (nine in Wales) based on value in 1991. Bills for the lowest band A are two-thirds of the middle band D. Bills for the top band H are twice those of band D. This means that a stately home owner pays only three times as much as a person in a tiny flat in the same local authority area. Yet the property might be worth 100 times as much.

The second objection is more fundamental. The tax takes little account of ability to pay. There is a 25% discount if only one person lives in the house and there are automatic concessions for students and those with disabilities. Other than those exceptions, everyone must pay unless they qualify for means-tested benefits. Targeting Council Tax benefits to the poorest households. The Chancellor announced a £200 payment in last month's Budget to help those aged over 65 with Council Tax. The one-off benefit will be paid later this year. Meanwhile, the Government is pressing on with its plan to revalue all homes in England, taking account of price rises since 1991.

Though politicians say the total tax take will not increase as a result, the balance of where the tax comes from will alter. Areas where property prices have risen faster than the national average will be saddled with a bigger share. Nationwide building society estimates that the average home has increased in price 2.8 times over the past 14 years, from £54,547 to £153,778. Regions of higher growth include London (3.1 times), the South-East and South-West (both 2.9 times).

The West Midlands, Yorkshire and Humberside have all seen slower growth, with the average house increasing 2.6 times in value. One study from a Labour-linked think tank, the New Policy Institute, says that revaluation should go further. It wants to split Council Tax into 13 bands to reflect more accurately the wide range of differing property values. The top band would pay ten times the tax of the bottom band.

However, the Government has also commissioned a wide-ranging review of all local government finance by academic Sir Michael Lyons. His report, due and will consider a range of alternatives, including reform of council tax. The Liberal Democrats are the only main party to have made a firm promise to scrap Council Tax. They propose instead a local income tax, which would be collected by the Inland Revenue along with income tax. Each council would set its own rate, based on Inland Revenue estimates of how much income its residents had.

Chris Wheal says: 'I think we would be significantly better off under a local income tax and so would many others who are self-employed. But I would want to be sure that all the savings were being passed on to the council. 'As a school governor, I know how stretched local authorities are and would favour a system that gets more money to them, not less.'

THEY are neither poor nor wealthy, with a modest private pension to boost what they receive from the state. But Arthur and Gladys Brace have seen Council Tax soar way ahead of any pension increase they could dream of. They married early in the Second World War before Arthur, a Spitfire pilot, was posted to Africa by the RAF. Both 83, they live in Weston Super-Mare, Somerset, and will pay £1,081 in Council Tax on their band C flat this year, an increase of 4.7%.

Arthur's small occupational pension comes from his career in the ceramics industry. He says: 'My private pension goes up three per cent a year and the state pension rises very slowly. But Council Tax has increased in leaps and bounds and we have to think very hard about managing our money.'

Politicians have latched on to Council Tax as a key election issue. The Conservatives have pledged a discount, regardless of income, for the over-65s. It would halve bills up to a maximum discount of £500 a year. They estimate 3.8m homes would gain. Council Tax itself would remain. 'I don't want to look a gift horse in the mouth,' says Arthur, 'but this Tory move is another election sop. It gets away from the idea that we should have a decent state pension, not a random bunch of handouts.'

RISES started to bite in Wales last week after the revaluation in Council Tax bands. Bills there are based on nine new Council Tax bands, replacing the original eight. Each home has been re-valued over the past two years, reflecting changes in house values since 1991. About one third of homes have moved up a band, with a few jumping two or more bands. Eight per cent of homes drop to a lower band. The increase in bills for some homes is so dramatic that the Welsh Assembly has had to find extra money to soften the blow. This means that Council Tax increases will be limited to one band a year, rather than being imposed all in one go.

Retired head teacher Maureen Jenner's bill rises by 23% this year. Maureen, 68, a widow, lives in Ferryside, near Carmarthen. Her house has been re-valued and moved from band E to F. Her bill this year, after allowing for a 25% discount for being the sole occupant, is £988.50. Last year, she paid £803.25. The extra £3.56 a week more than wipes out the £2.45 rise in the basic state pension.

Maureen says: 'I am not wealthy. I moved to this house because it had a big garden and at the time I had three dogs.' She still looks after crossbreed Kim plus her cat Kitty pus. Like other pensioners of 65 or over, Maureen will receive a one-off payment of £200 from the Government this year to help with Council Tax. But she is dismissive. 'Special payments put pensioners apart from the community,' she says. 'We don't want special treatment, just a tax that is fair and is related to ability to pay.'

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IMMIGRATION 'TO FORCE UP' COUNCIL TAX

FIRST PUBLISHED BY: THIS IS MONEY

COUNCIL TAX WILL HAVE TO RISE BECAUSE OF THE GOVERNMENTS FAILURE TO GET A GRIP ON IMMIGRATION, TOWN HALL CHIEFS HAVE WARNED.

They insisted there was no way local government could afford the public services that hundreds of thousands of immigrants from Eastern Europe would demand. Lord Bruce-Lockhart, head of the Local Government Association, has written a scathing letter to Home Secretary, placing the blame squarely on the Government.

In a devastating critique of the governments performance on immigration, he warns the crisis has created 'severe problems' that will lead to Council Tax rises, local job losses and cuts in services. Official estimates of the number of immigrants arriving in Britain have badly underestimated the pressure on the communities where they have settled.

The LGA claims the governments inability to calculate the scale of the problem has left local authorities out of pocket. Lord Bruce-Lockhart's anger stems from the massive influx of migrants that has stretched services to breaking point in Slough, Berkshire - a situation he says is replicated nationwide. According to figures provided by the Office for National Statistics, only 300 immigrants are settling in Slough each year. But the local council says there are at least 10,000 migrants alone living there.

Of 9,000 new National Insurance numbers handed out over the past 18 months, only 150 went to British nationals. Since local councils receive central government funding according to the number of residents living in their areas, failure to calculate the number of immigrants can lead to critical financial shortfalls.

This leaves the entire community suffering as schools and hospitals are overstretched. The LGA believes the arrival of immigrants could lead to a 6% rise in Council Tax - which has already soared by more than 70%. In his letter to government, Lord Bruce-Lockhart, the former Tory leader of Kent County Council, stresses that the same problem is affecting local communities nationwide.

Twenty-five councils from around the country were represented at a seminar a week ago at which they expressed concerns at the Government's inability to get its numbers right. He writes: 'There are a number of local authorities for whom the current system of measuring the number of migrants in specific council areas is failing to ensure adequate funding to keep council services to local people maintained. Councils are finding it difficult to provide services to growing populations that are not recognized by government statistics.

'Working migrants have become an invisible population whose children need school places, who need to be housed appropriately and in some cases need social services. Official statistics have failed to reflect this.' In his letter to, Lord Bruce-Lockhart demands to know when the Government will establish a system that can gather accurate information.

'Unless accurate, up-to-date figures on migration are produced, so that the proper funding to councils can be reflected, this could pose severe problems in the future as services get cut, or Council Tax has to rise disproportionately,' he warns. He also tells the Home Secretary existing workers are being forced out of the workplace by eastern European immigrants. He concludes: 'Chief executives, from places like Slough, are happy to welcome EU accession state migrants and recognize their contribution to a thriving local economy in many parts of the country. 'However, there is evidence that migration is displacing existing resident labour.'

Ministers claimed just 13,000 immigrants would come to Britain when its borders opened to migrants from the new states of the European Union. But since 2004, around 700,000 economic migrants have arrived to work here. The letter is a crushing rebuke, who used a weekend interview to call for a mature debate about immigration and indicated that an independent body could draw up limits on the number of immigrants Britain is prepared to accept.

A spokesman for the Department of Communities and Local Government, said: 'Government distributes formula grants to local authorities using the best statistics that are available on a consistent basis.'

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BINS LEVY U-TURN ADDS £100 TO COUNCIL TAX

FIRST PUBLISHED BY: THIS IS MONEY

THE GOVERNMENTS PROMISE TO ABANDON PAY-AS-YOU-THROW BIN CHARGES COULD ADD £100 OR MORE TOO COUNCIL TAX, IT HAS EMERGED.

Rubbish tax:
£100 may be added to council tax
 to pay for bin collections

Rubbish tax: £100 may be added to Council Tax to pay for bin collections. Town hall chiefs warned bills may be padded with 'rubbish premiums' if councils are banned from raising bin taxes to cover the growing cost of burying waste in landfill sites.

Powers to let councils charge families for putting out too much rubbish are in the Climate Change Bill, which is going through Parliament. Trials are due to start next year in five areas. Those who do not recycle enough will face bills of at least £50 a year.

But, No10 suggested the rubbish taxes would be axed once the trials end. One source said: 'People made it clear that they don't like a punitive rubbish tax, so it's natural for us to jettison the idea.' But by 2012, The Governments landfill tax escalator, which makes councils pay the Treasury for the waste they bury, will have risen to £60 a ton and EU fines for exceeding landfill targets will have hit £100 a ton. Paul Bettison, of the Local Government Association, said: 'The only thing that councils can do is increase the Council Tax.

'It may be the case that Council Tax is capped. If that happens, there will be difficult decisions about services. 'The Government is going to have to be prepared for old people seeing day centres closed, for swimming pools shut down, and for roads full of holes.' Fears over the Council Tax came as ministers appeared to be falling out with them over dumping pay-as-you-throw taxes.

The Department of Environment, Food and Rural Affairs yesterday suggested Downing Street's comments had been premature. It said: 'We will evaluate the impact of those pilots before making a final decision.' Critics said the Prime Minister promised twice last year to ditch bin taxes. Tory local government spokesman Eric Pickles said: 'Unless ministers pledge to dump bin tax laws, the public should not trust a word Labour say.

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WOMAN JAILED OVER COUNCIL TAX

FIRST PUBLISHED BY THIS IS MONEY

SHE PAID HER TAXES THROUGHOUT HER WORKING LIFE, RECEIVED NO BENEFITS AND HAS NEVER BEEN IN TROUBLE WITH THE LAW.

7 days - sentence for
refusing to pay her horrible
Council Tax bill

But today 73-year-old Sylvia Hardy was jailed for refusing to pay her full Council Tax bill. The former social worker from Exeter is angry that her bill has soared way above the rate of inflation and is holding back £53.71 a year. She appeared before magistrates this morning and was handed a seven day sentence for refusing to pay.

Miss Hardy's defiant stance will heap shame on the government which has failed to tackle the problem of spiralling local government expenditure. 

Pensioners across the country are growing increasingly angry as Council Tax bills rise faster than increases in their pensions. 

One, 71-year-old clergyman Alfred Ridley, has already been sent to a Category A prison for 28 days after refusing to pay £63 of his tax. Miss Hardy visited him last week and is now more determined than ever to make a stand. Yesterday, she confessed that she is 'terrified' of going to prison but said she was determined to go through with her protest as it 'is the only way to get our voices heard'. 'I have thought for a long time that this government is completely out of touch. 'What we are campaigning about is just one issue but there are many more. I hope the politicians take notice of what is happening. Ordinary people like us are so angry.

'We are worried for our future and our ability to cope. 'No one takes any notice of us when we write to our MPs and lobby them, that's why I am taking this drastic action. What else can I do?' Miss Hardy's time in prison will cost taxpayers around £700. She decided to withhold part of her Council Tax after seeing the bill for her £130,000 flat in Exeter rise six times higher than the annual increase in her pension.

Her annual Council Tax bill is £708.26 - which has risen 38% in the past four years, compared with a 6.8% rise in her pension. This year she has paid 1.7% more than last year's bill, in line with inflation, but has held back the rest of the increase. At a previous hearing at Exeter magistrates' court she was given 56 days to pay up or face custody. That time is now up. Miss Hardy joked that she had been to jail once before, to sing The Yeomen of the Guard at Exeter prison with the local operatic society.

She said she was apprehensive about spending a week at Eastwood Park prison in Gloucestershire. 'My doctor says my blood pressure is quite high and has told me to inform the prison authorities. I am determined to do this and I just hope my nerve holds out when I'm stood in the dock. 'The two things I will miss most will be making my own food and a comfortable bed. I have lots of food allergies so I probably won't be able to eat much. And I have a back problem which will probably cause me some pain on the prison bed. 

I will do this for the people of England so they will fight for their human rights.

'Mr Ridley told me when I visited him last week that the beds in prison are very hard so he has to get up very early in the morning.'

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CALLS TO FREE JAILED COUNCIL TAX REBEL

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THE SON OF THE RETIRED VICAR JAILED FOR NOT PAYING HIS COUNCIL TAX DEMANDED HIS FATHER BE RELEASED LAST NIGHT AFTER IT EMERGED THAT HIS ARREARS WILL BE WRITTEN OFF.

Alfred Ridley, 71, who suffers from a heart condition, was sentenced to 28 days in one of Britain's toughest prisons for refusing to pay a £64 annual increase in his Council Tax bill.

His local authority yesterday announced it will waive his debt butonly after he has served his time alongside murders, terrorists and gangsters in the Category A Woodhill Prison. Last night, Joel Ridley, 30, said: 'He should be freed because, in the minds of many, the matter is now closed.

'My father is in a category A prison and he is 71 years old. The council has wiped out his debt and he still finds himself in prison. I am angry about the whole affair.' The National Pensioners Convention described South Northamptonshire Council's decision as 'vindictive'. Spokesman Neil Duncan-Jordan added: 'The council could have expressed a view to magistrates beforehand. Perhaps they are feeling the backlash of public opinion and don't want to be remembered as the council that put pensioners in prison, particularly retired vicars.' A Help the Aged spokesman added: 'The decision by South Northamptonshire Council is welcome but smacks of closing the stable door after the horse has bolted.

'Older people across the country continue to struggle with unreasonable increases in Council Tax despite the services they rely on day-to-day facing swingeing cuts. 'It is little wonder that so many poorer pensioners feel the need to protest.' Mr Ridley - who lives with his wife Una in a rented home in Towcester, Northamptonshire, on an income of £530 a month - became the first Council Tax protester to be jailed after he refused to pay an 8.5% rise in his bill. Instead he paid the equivalent of a 2.5% increase and withheld £64, eventually running up arrears, including court costs, of £691.

Magistrates sentenced him on Wednesday after he continued to withhold payment despite being given a suspended sentence in July. The jail term will cost taxpayers £3,000. Last night Mrs Ridley said she was delighted that the council had wiped out the debt. 'The council rang me and said they were prepared to write off the debt but in return Alfred's punishment will be 28 days in prison.

'We both feel that is fair. I know some people will say that now the debt has been cleared Alfred should be freed, but the price - or the punishment - he has to pay is to serve his time in prison. Mr Ridley has spoken to his family in a brief phone call from the Milton Keynes prison, where Soham killer Ian Huntley attempted suicide in 2003. Son Joel said his father told him the prison was 'grim', that he was sharing a cell with a prisoner 'a little bit older' and would 'just have to see things through'.

Mrs Ridley, 72, added: 'He is level-headed and is bearing up. He does not regret anything. He is keeping calm and steady to pass this thing through. 'But of course I am concerned. There is a gap next to me in bed and there is this guy who I talk to quite a bit and I miss him very much.' Mrs Ridley said she thinks her husband, who has been taking medication for his heart condition in jail, will be treated as a remand prisoner during his time behind bars, and will be able to wear his own clothes, rather than a prison uniform.

An inmate released from Woodhill yesterday said he saw Mr Ridley looking 'worried' while waiting to hand over his personal belongings. 'He was looking depressed, he was looking shaken up. He was sitting down with his head looking at the floor,' said the 20-year-old, who called himself Brown. 'We could not believe a vicar was coming in. My advice to him would be to keep himself to himself.'

The decision to jail Mr Ridley, who did his National Service with the Marines ( A War Hero), provoked fury among MPs and charities for the elderly. It threatens a repeat of widespread Council Tax protests two years ago. South Northamptonshire Council said it took no satisfaction in the outcome of the case but had a duty to collect taxes. 'The reason Mr Ridley is in jail was not because of the money. It was because he failed to comply with a court order. It was the magistrates that sent him to jail,' said a spokesman. 

'comments from the local council' lets blame everybody else?

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COUNCIL TAX RISE TO BOLSTER STAFF PENSIONS

FIRST PUBLISH BY: THIS IS MONEY

COUNCIL TAX PAYERS WILL HAVE TO PAY AN EXTRA £20 NEXT YEAR TO MEET THE PENSION DEMANDS OF LOCAL GOVERNMENT EMPLOYEES.

They are already facing increases of 10% or more in the first rises in Council Tax after the General Election. Figures leaked yesterday showed that the cost of paying the guaranteed and inflation-proofed pensions will rise to £3.75bn this year. This is an increase of nearly £250m on last year.

Most of such costs are picked up by national and local taxpayers.Contributions by local government staff meet only a fraction of the total. Critics say this means that local tax payers, some of them with little or no pension provision, are funding generous schemes based on final salaries for council workers.

David Willetts said: 'Labour has presided over an absolutely preposterous situation in which people with modest incomes and no pensions are paying ever higher Council Tax to provide good pensions for other people. The Government claimed that it was starting to tackle the problem but gave up as soon as it faced union opposition.' The £250m extra costs faced by Council Tax payers will mean their bills will go up by around 1.5%, or roughly £20 for someone paying the average tax for a benchmark band D home. News of the extra bill comes as the Government and councils continue to hire bureaucrats at an extraordinary pace, all with guaranteed pensions. In recent months State organisations have been taking on workers at the rate of 560 a day, five times that at which private companies are recruiting.

Six-figure salaries have become the norm for senior officials, even though their jobs are cushioned from the risk faced by private sector executives. Many of the appointments appear to Council Tax payers as obscure or unnecessary - such as 'strategic' executives and equality officers, 'five-a-day coordinators' to encourage the eating of fruit and vegetables and 'real nappy' officers.

Average contributions to their pension schemes represent around 19% of the value of their monthly salaries. The terms are so generous that local authorities have a £ 30bn gap to make up between the value of the scheme and the cost of paying out the inflation-linked pensions. Attempts by Deputy Prime Minister to curb taxpayer spending on their pensions collapsed earlier this year after strike threats by unions. The government wanted to raise the council retirement age from 50 to 55 and make executives take pensions based on their average career salary rather than their final year's pay.

Council Tax bills, which have gone up by 70% since Labour came to power in 1997, went up by only 4% in this year's rises because the Chancellor handed £1bn extra from the Treasury to councils. But local government leaders have warned that there will be no similar bailout next year and that as a result Council Tax bills are likely to go up by 10% or more. Extra pension payments would mean a further 1.5% on top of that.

Before 1997, six out of ten workers had final- salary pensions which guaranteed that pension payments would always stay at a fixed proportion of their pay when they retired. But the Chancellor £100bn stealth tax on pension funds and falling stock markets have squeezed companies so that two-thirds of final-salary plans have been replaced for new workers by less costly stock market-based schemes. These provide much lower pensions and are less reliable.

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