POLICE PORTION OF COUNCIL TAX SET TO RISE IN CREWE AND NANTWICH

First Published by: Guardian

CREWE AND NANTWICH RESIDENTS WILL PAY MORE FOR POLICE SERVICES IN THE NEXT TAX YEAR.

But the price hike will keep 23 officers on the beat after the Government imposed massive budget cuts. The police portion of Council Tax in Cheshire is being increased by 3.94 per cent. It will add £5.69 a year or 11p a week to taxpayers’ bills for a band D home. Margaret Ollerenshaw, chairman of Cheshire Police Authority said: "We are aware of the financial strains many people are facing at the moment". 

“We looked carefully at the idea of freezing Council Tax at last year′s level. “After careful consideration, we decided this small increase would help maintain front line policing services and keep the people of Cheshire safe. "It means the reduction in the number of police officers in Cheshire during 2012/13 can be limited to 25, instead of the 48 required if we opted to freeze Council Tax." The total budget for policing Cheshire in 2012/13 will be £172.557 million, compared to £177.21 million in 2011/12.

The annual charge for a band D Home will be £150.22, compared to £144.53 in 2011/12. Police officer numbers are expected to reduce from 1998 to 1973 by March 31, 2013. But the number of community support officers is expected to rise from 215 to 222. Other police staff posts are expected to reduce from 1637 to 1510. This budget is the final one to be set by the 

Police Authority before it is replaced by a police and crime commissioner in November. Ms Ollerenshaw has described it as ‘arguably the most difficult of the 17 budgets set by the Authority’. She said, "We are working against a background of budget cuts - £33 million in savings must be found by 2014/15. 

“That level of saving is not easy. It is depressing to see the level of cuts we are having to make following the steady investment we have made over the life of the Authority to ensure the Constabulary has the capability and capacity to make Cheshire safer and to protect the public from harm.” “As more than 80 per cent of the budget relates to people, it is regrettable that the scale of the cuts means unavoidable reductions in the number of police officers and staff.

"We were offered a one-off grant to freeze Council Tax for 2012/13. “If we had accepted, the result would have been a shortfall for the following year when the grant was not available. “We must take a long term view of the impact of our decisions on policing.”  

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

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THE SLOW DEATH OF COUNCIL TAX

First Published BY: The Guardian

THERE IS A SOLUTION TO COUNCIL TAX HIKES: PUT UP THE BUSINESS RATE, SAYS PETER HETHERINGTON

Councils in England should have entered 2012 with a renewed sense of optimism. 

Frequently sidelined, ignored and attacked by ministers for inflation-busting Council Tax increases they were lauded by the Audit Commission last year for a "marked improvement" in performance over the past 12 months

The second comprehensive performance assessment (CPA) showed that almost two thirds of the biggest authorities were generally in a good state of health - a year after the commission showered praise on the best councils and noted that, when gauging efficiency and value for money, they stood comparison with the best private businesses.

At any other time, the government - which, after all, instituted the complex and expensive CPA process - might be joining James Strachan, the commission chairman, in proclaiming the "excellent news". Instead, the praise was grudging.

Local and regional government minister Nick Raynsford, are in a belligerent mood and preparing to - let's be blunt - wield the axe on authorities daring to post Council Tax increases above "low" single figures. Raynsford says it's a near certainty that some budgets will be capped.

In local government, 12 months seems an eternity. Last year, ministers were promising councils extra freedoms and flexibilities in return for decent CPA ratings. Some at the margins have been delivered, a few strings to Whitehall severed, while an innovation forum, embracing ministers and councillors, has been mulling over what further powers might be devolved from the centre to the council chamber. 

But everybody knows there is one sticking point in a key area which dare not speak its name: finance.

The method of funding local government is in a mess, bordering on chaos. Ministers have known about this since Labour came to power (and lost the last election) - which is why, last year, Nick Raynsford changed the formula governing the system that allocates government grants and the uniform business rate (together accounting for three quarters of council spending) to councils.

In political terms, this has only made matters worse for the government; a slight shift in resources from the south to parts of the Midlands and the north produced an almighty outcry and, according to another Audit Commission report last month, ministers were at least partly responsible for Council Tax rises this financial year.

The revised formula sent out all the wrong signals to marginal middle-England, the places where elections are won and lost. These days it has moved south from the West Mid lands, and parts of the north, to Hertfordshire and Kent - the very areas hammered by the marginal shift in resources.

Downing Street was not amused - especially after leaked reports from a Cabinet sub-committee last year showed Prescott insisting, under pressure from No 10, that nothing be done to penalise this important constituency by giving the impression that the north was getting more at the expense of the south.

Over the past few weeks the government has responded with almost £800m extra for town and county halls - barely a month after agreeing the annual Whitehall grant settlement - to keep average increases in the next financial year close to the low single figures. It will be a hard task.

The deputy prime minister knows that the current system, broadly in place since the poll tax was scrapped, is unsustainable. He told the Guardian as much last month. Then he acknowledged that a review currently under way and chaired by Raynsford (with the help of up to 20 experts from local government, finance, academia, unions, and business) will have to be "deeper than the relationship between central and local government."

Revealingly, he added: "I do not think the Council Tax will live up to that kind of review. I am trying to manage a difficulty that has been brought about not just since some pensioners have been kicking up [about Council Tax rises this year]. The whole way local authorities are financed is not good enough."

Councils need additional sources of funds and more revenue-raising powers. The problem is that the most sensible reform, namely addressing "underfunding" from business rates will be ruled out of order by Downing Street and probably by the Treasury because the business lobby will not wear any change.

Yet a recent report by Maureen Wellen, assistant director of local government finance and policy at Cipfa, the professional body for council finance officers, shows that in just over 10 years the contribution made by ordinary Council Taxpayers has increased by a third, while the share paid by business has fallen significantly.

This is because governments have pegged any increases in business rates to inflation - at a time, says Wellen, when the needs of local government have risen faster than inflation (pay rises, for instance, outstrip inflation).

There is one obvious conclusion from her analysis. Businesses are getting cut-price property taxes, while householders pick up the tab.

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

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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 Council Tax 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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