INFLATION-BUSTING COUNCIL TAX RISES AHEAD

FIRST PUBLISHED BY: THE IS MONEY 

COUNCIL TAX BILLS WILL GO UP BY MORE THAN 4% THIS YEAR, IT EMERGED YESTERDAY.

The rise, which is 50% above the rate of inflation, will mean that local taxes will have all but doubled. Local government officials confirmed yesterday that estimates putting the spring increase at less than 4% were too low. Ministers had hoped that large dollops of Treasury cash given to councils had kept the lid on increases.

Town halls last night blamed the Government for the impending hike and one official warned: 'There will be more pain than people had anticipated.'

Lord Bruce-Lockhart, head of the Local Government Association, said: 'Government grants have failed to keep pace with the demands placed on local government, including coping with the needs of an ageing population and the costs from new legislation. 'Now is the time for Government to be honest about what it is prepared to fund in the future and what impact this will have on local services and the Council Tax payer.'

The Department of Communities and Local Government is expected to announce a figure of 4.2% at the end of next month. The Chancellor favoured measure of inflation, the consumer price index, stood at 2.7% in January. An average bill in England would go up by £44 to £1,100. In 1997 the figure was £564.

The benchmark band D Council Taxpayer would have to find £1,321, up by £53 and, over the decade, a 92% increase. The elderly have suffered the most from higher bills, largely because many have good-sized homes in highly-taxed areas while having to make do on fixed incomes.

Two supporters of the pressure group Is It Fair will be in court this week for non-payment of Council Tax.

Spokesman Christine Melsom said: 'Once again the Council Tax rise will be order to meet Council Tax demands. One in 12 had cut back on heating. Charity finance expert Anna Pearson said: 'This injustice is made worse by the fact that despite the increases in Council Tax, many older people are seeing the services they rely on most facing cutbacks.'

Tory local government spokesman Caroline Spelman said: 'Council Tax bills are now edging closer and closer to being double what they were when Labour came into power and every year brings a nasty shock as higher and higher bills arrive. 'An increase of 4.2% is the equivalent of £110 a month out of someone's pension or take-home pay.'

The property revaluation could leave many owners paying even more in Council Taxes. A report into local government finances is due this spring.

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

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GREEN PROPOSES COUNCIL TAX RISE ‘FOR TOUGH TIMES

FIRST PUBLISHED BY: THE ORACLE

GREEN PARTY LEADER ROB WHITE ASTONISHED FELLOW COUNCILLORS ON MONDAY BY CALLING ON THEM TO PUT UP COUNCIL TAX.

The minority Labour administration is proposing a zero Council Tax increase, but needs the support of one of the other parties for it to be passed. Cllr White cast aside the tradition which puts off debate on the budget to the full council meeting – this year on Tuesday, February 21.

Leader of the council Jo Lovelock was reluctant to call on him to speak at the cabinet meeting, citing “tradition” and the need to avoid debating the budget twice. Promising he would only take a minute, Cllr White pressed on, saying these were “extraordinary times”. He described the £3.4 million grant from Government to pay for the Council Tax freeze as a “bribe”.

He proposed a 3.5 per cent increase in Council Tax, which would cost each household 87p a week. After the meeting Cllr White acknowledged his proposal might not be much of a vote winner “but it is the right thing to do”. He explained his thinking, quoting from a consultation document produced by the council’s education and children’s services department: 

“We need a fair budget for tough times".

The council is facing unprecedented cuts to its funding and is proposing to reduce services and cut staff in areas such as special needs transport, learning disability support and respite care. “In the staff consultation, learning difficulties managers said that ‘the service level cannot be maintained’.

“In school improvement, responses included that cuts would ‘push work from the administration staff to others’, overloading them. “In safeguarding, officers said ‘there is no longer capacity to provide effective maternity and sickness cover’ and most worryingly of all is that the good work completed since the service was deemed inadequate in 2008 ‘will be lost’.

“We think that this is unfair, unacceptable and as we said in our manifesto last year, we think public services are important and we will defend them. “For 87p per week – not per head, but per household – it is possible to limit this damage in the coming budget and to avoid finding ourselves in a massive hole next year.”

He continued: “We understand these are difficult economic times and so we feel that an increase in Council Tax has to be modest and below inflation. “This applies not just this year, but next year too, whereas a freeze this year would need a massive hike next year to make up lost income.

“This will also allow us to defend jobs and support the local economy. “Twenty-seven councils around the country, including 11 which are Conservative controlled, as well as the Greens in Brighton, are also raising Council Tax instead of taking the one-off freeze money. “We want Reading councillors to consider this option.” The budget contains cuts and increased fees totalling £12.6 million and the loss of around 30 posts.

If the Greens do not support the Labour administration, the ruling group will have to look to either the Liberal Democrats or the Tories for support. Cllr Lovelock said yesterday she had so far arranged meetings with Cllrs White and Daisy Benson, the leader of the Lib Dems, to discuss the budget before next week’s meeting.

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

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CALL FOR CLARITY ON COUNCIL TAX 'CONFUSION'

FIRST PUBLISHED BY: LOCAL GOVERNMENT CHRONICLES

OFFICIAL GUIDANCE ON COUNCIL TAX REFERENDUM

Calculations have been described as “confusing” and ministers have been asked to issue a clarification. Some finance directors have warned the new rules on Council Tax could see authorities trigger a referendum even if they put up Council Tax by less than 3.5%.

The issue centres on the government’s decision to calculate increases based on the “relevant basic amount of Council Tax”, which excludes from the Council Tax requirement the ‘levies’ councils pay to outside bodies such as the Environment Agency or the London Pension Fund Authority, rather than “basic amount of Council Tax”, which is the amount charged to residents of the borough.

The LGA’s Special Interest Group of Metropolitan Authorities has suggested that the approach which is a complete change on previous the previous method of calculating tax rises – could hit councils with larger levy payments than others, such as those who have set up joint delivery bodies with neighbours for services such as transport and waste.

Sefton and St Helens MBCs, which both pay a levy to the Merseyside Waste Disposal Authority, have calculated they would trigger a referendum with increases of around 2% while Tonbridge & Malling BC have calculated their trigger point would be “a fraction over 2.9%” because of drainage board levies. “We have been to DCLG about it and we got what I see as a rather confusing answer from them,” Stephen Jones, the LGA’s head of finance, said.

Former local government minister John Healey has called on Mr Pickles to clarify how the referendum system is to work. “The new system is beset by confusion and uncertainty. A clear public statement of the way the system works is essential and urgent,” he said. “In practice the trigger point for a referendum will not be 3.5%, it is likely to be lower and to be different in every local authority,” he said.

At a conference last month, Steve Freer, chief executive of the Chartered Institute of Public Finance and Accountancy, said the levies problem “just demonstrates how complicated and complex” the situation is. However, the body believes the exclusion of levies is the right approach in order to avoid councils triggering a referendum simply because a levying body increased its charge.

DCLG argues the removal of levies from the calculation is justified because a reduction in any levy on a council should be passed on to Council Tax payers. In effect, this means that councils which experience a reduction in levy payments cannot chose to reinvest that saving in services without it lowering the amount by which it can raise its Council Tax.

In a letter to Mr Healey, housing minister Grant Shapps wrote: “If, instead of taking the burden of a levy off taxpayers when that levy is reduced, an authority chooses to increase its own expenditure to “soak up the slack”….a referendum would then be required, and I am entirely happy that this outcome is justified.”

DCLG has also sent councils a note warning them to check their calculations carefully: “Authorities which are planning a Council Tax increase just below the [threshold] should take care to ensure that they do not inadvertently increase their relevant basic amount of Council Tax by marginally more this level.”

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

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YVONNE FOVARGUE MP

FIRST PUBLISHED BY:  PARLIAMENTARY COMMUNICATIONS LTD

COUNCIL TAX CHANGES WILL HIT THE WORKING POOR

The government's proposal to localise Council Tax benefit (CTB) while cutting funding by 10 per cent will hit hardest the working poor, writes Yvonne Fovargue MP.  This reform is part of the decentralisation agenda and its aim is to create stronger incentives for councils to get people back into work and so support the work incentives that will be introduced through the government's plans on universal credit. 

The communities and local government select committee expressed scepticism over the level of local control that councils will actually have saying, 'the proposals for the localisation of Council Tax support seem to us to provide an illusion of delegation with a minimum of real discretion, virtually guaranteeing that the funds available to support working-age unemployed people will be squeezed'. However, the decision to abolish the national CTB from 2013-2014 and instead provide local councils grants to create their own systems will leave them struggling to design replacement schemes. Government has proscribed that existing and future pensioners are protected at current levels leaving no discretion in this area and in determining a scheme councils must also leave untouched the single persons discount. 

Therefore the cash funding cut, which equates to £2.6million for my local authority, Wigan in Greater Manchester will fall onto 18,000 local working-age households, already struggling against a backdrop of the current difficult economic conditions. The 10 per cent cut in the £5bn spent on CTB means that local authorities need flexibility to target support to the poorest and most deserving in society. Government inflexibility poses the danger that those on higher incomes will receive discounts at the expense of the needy. 

The timescale to completely redesign the existing scheme, consult, agree, put in place the administrative process and ensure that IT can deliver the scheme is very tight. Existing working age customers receiving CTB will see a reduction in amounts awarded – before any protection is applied for locally defined vulnerable groups. There is a potential for reductions in collection rates for Council Tax – Council Tax will need to be collected from customers who are receiving a decrease in their existing Council Tax benefit – this could be the first time that some people have had any liability to pay. Collection could be difficult and involve high levels of direct contact to recover the debt. 

This change compounds the effect of other welfare reforms. Households renting in the private sector will have seen a reduction in their housing benefit by December 2012. There are further reforms to housing benefit due in the social sector in April 2013. Local authorities will have to design schemes where very difficult decisions will have to be taken about caps on entitlement, minimum awards, amended capital limits and income tapers and even changes to disregarded income (child benefit, war pensions), or find money from within existing resources to plug the shortfall – politically difficult and at odds with child poverty strategies. 

Hard working families are already squeezed, councils are squeezed and it is inevitable that, yet again, the poor and vulnerable will suffer at the hands of this government.

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

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NEW PROPOSALS MEANS SOME KINGSTON RESIDENTS COULD BE FORCED TO COUGH UP MORE COUNCIL TAX

FIRST PUBLISHED BY: THIS IS LOCAL LONDON

COUGH UP MORE COUNCIL TAX UNDER NEW PROPOSALS

Landlords, second home owners and more than 400 residents of working age could be forced to cough up more Council Tax under new proposals. Kingston Council’s new Council Tax benefit scheme aims to charge higher rates to those who can afford it, while protecting the elderly, disabled and vulnerable in a bid to make up a £1m shortfall.

The deficit comes after central Government decided to abolish the national Council Tax benefit scheme and cut funding by 10 per cent by April 1 next year, leaving the local authority in the lurch. Currently 9,600 Kingston residents are claimants of Council Tax benefit, that is means tested and helps people with low or no income to pay their Council Tax.

The plans aim to encourage people to work by rewarding those who do, while still protecting people on low incomes who are already struggling to make ends meet.Under the new scheme £100,000 will come from 400 people of working age who live with other working adults and will be asked to contribute more. The rest of the shortfall will be met by removing Council Tax exemptions and discounts on certain properties, including those that are not occupied as a main home. An empty homes premium of 50 per cent will also be charged on properties left empty for more than two years.

Councillor Rolson Davies, lead member for finance and resources, said: “We understand that our proposals will not be popular with those who we would be asking to pay more, but we have a responsibility to protect those who are vulnerable, including those people relying on our frontline services.” Tenants may have to pick up the shortfall after changes to Council Tax benefits, according to Chris Norris, head of policy at the National Landlords Association (NLA).

However, Mr Norris said good communication with both groups and the council could minimise any negative effect. He said: “Landlords will be keen to sustain long-lasting tenancies, so it is important that tenants and landlords work together to agree the best way to continue rent payments and sustain their tenancies.”

Pippa Mackie, chief executive of Kingston citizens advice bureau, said one problem area could be for former owners of repossessed houses, as building societies will be taxed after repossession and they could try and pass the cost on. She said: “I think that most people who are reliant on welfare benefit are concerned about the impact that changes might have on them. “There are going to be changes which may cause confusion so we will be working to make sure that as much information as possible is out there.” People who are of pension credit age or who are receiving a disability related benefit will not be affected by the changes.

A consultation on the proposed changes will start on July 2 and run until September 9, before being considered by the council’s policy and resources committee and full council in December.

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

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LGA DEMANDS CONTROL OVER COUNCIL TAX RULES

FIRST PUBLISHED BY: LOCAL GOVERNMENT CHRONICLES

THE GOVERNMENT MUST SCRAP BLANKET COUNCIL TAX DISCOUNTS OR THE POOREST WILL FACE HUGE BILLS.

That warning has come from the Local Government Association, which said more than two million people who are either low earners or young and unemployed could have to pay an average of £247more in Council Tax each year. Control of entitlement to the benefit is due to pass to councils next year. But the government will impose a £500m cut, equivalent to 10% of the total available.

And it has ordered that discounts cannot be reduced for single people regardless of income or for currently eligible pensioners, as well as suggesting that vulnerable groups such as families with children should be protected from any reductions. Ministers have claimed that councils could make up the shortfall by cutting discounts for second homes and empty properties.

But LGA chair Sir Merrick Cockell (Con) rejected this: “The poorest regions and the most vulnerable people will be hardest hit by this cut unless the government offers councils more flexibility over all forms of Council Tax discount. “It is the only way that councils can ensure that the greatly reduced funding for Council Tax benefit is targeted at the local people who need it most.” Without this, the £500m cut would prove “impossible to deliver” except through service cuts, higher overall tax rates or the higher charge for working poor people and the young unemployed, he warned. Sir Merrick added: “The Treasury has made the cut and left councils to make incredibly tough decisions and face the inevitable fallout.”

The LGA arrived at its £247 figure by taking Department for Work and Pensions statistics, published only at UK level, which show 5.9 million Council Tax benefit recipients, of whom 2.2 million are aged 65 or over and 1.7 million are families with children. The first group must be protected, and it has assumed that councils would wish to protect the second, leaving 2.0 million working age benefit recipients to share the £500m cut, an average of £247 each. For England, the figure would be roughly £210. David Magor, chief executive of the Institute of Revenues, Rating and Valuation, said: “The shortfall in England will be £437m, and the government has said second and empty home discounts could be worth some £420m. “The trouble with that is that it is ‘lumpy’ at local level. If you have not got many second homes you will have to cover the gap from something else.”

Councils in places such as the south west, with both low income levels and high numbers of holiday homes, might make the equation work, but those in older industrial areas could struggle, he said. Local government minister Bob Neill said: “The government has no intention of letting councils abolish vital discounts like those for single person homes.

“Spending on Council Tax benefit has more than doubled since 1997. The Local Government Association needs to realise that councils accounts for a quarter of all public expenditure and they need to play their part in tackling the deficit.” He added: “We are giving councils a strong incentive to put in place a better and fairer local Council Tax support scheme based on local priorities that means they can help more residents get back into employment, protect the vulnerable and reduce the spiralling benefits bill.”

The Local Government Finance Bill, which would give effect to the changes in Council Tax benefit, is due for debate in the House of Lords this evening.

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

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£2BILLION OF COUNCIL TAX LEFT UNCOLLECTED BY TOWN HALLS WHO THEN MOAN ABOUT CUTS BY WHITEHALL

FIRST PUBLISHED BY: THE MAIL ONLINE

COUNCILS IN ENGLAND HAVE FAILED TO COLLECT BILLIONS IN COUNCIL TAX – WHILE COMPLAINING ABOUT CUTS TO THEIR BUDGETS FROM WHITEHALL.

The total arrears – much dating back several years – is spread across 31 local authorities and stands at £2.3billion. Eight out of the ten councils with the worst record on collecting Council Tax are Labour-run. Liverpool had the highest amount of arrears, with nearly£108million in Council Tax outstanding – about £500 per household in the city.

Biggest debts: Liverpool City Council is owed £108million in unpaid Council Tax. Earlier this year, the city’s Labour leader Joe Anderson said he was ‘so angry and so devastated’ that the council had to find £91million in savings. 

That amount is less than the total in uncollected Council Tax. 'Angry': Liverpool's Mayor Joe Anderson was 'devastated' the council had to make savings in other areas to make up the shortfall. Manchester’s plans to cut services were criticised last year by David Cameron when he told the Labour-run local authority it should first cut its chief executive’s £200,000 salary. Labour regained control of Birmingham from the Tories and Lib-Dems in May and Croydon, also among the ten with the worst record, is controlled by the Tories. Local government minister Bob Neill unveiled the figures in a parliamentary answer to Labour MP Helen Jones. He said: ‘Every penny of Council Tax that is not collected means a higher Council Tax for the law-abiding citizen who does pay on time. 

‘These figures show that there is a significant source of income which councils could use to support front-line service or cut Council Tax bills.’ Lambeth, which has £48million of uncollected Council Tax, last year used taxpayers’ money to fund a poster campaign complaining about central government spending cuts. The posters said: ‘The Government has cut our money so we are forced to cut services.’ The Government has ordered a freeze of Council Tax across the country and has refused to pour in more cash to profligate councils.

'Shameful': Secretary of State for Communities and Local Government Eric Pickles accused local authorities of squandering millions by failing to collect Council Tax Local authorities have also expressed outrage over the Government’s 28 per cent cut to their funding. But Local Government and Communities Secretary Eric Pickles yesterday hit back, saying: ‘This roll call of shame is familiar reading, with Labour councils year in year out topping the table of local authorities who squander millions by failing to collect our Council Tax.

‘If these Labour authorities stopped complaining about the legacy of cuts left by their own party and actually chased up Council Tax dodgers they could use the money to protect hundreds of front-line jobs.’ The worst collection rate in England for last year was the London borough of Newham, where 8.3 per cent of Council Tax was not paid. It was followed by Manchester, Salford and the London boroughs of Southwark, and Barking and Dagenham. In total, £612million of Council Tax was not collected in 2010-11 across England.

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

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