LOCAL AUTHORITIES PLANNING BIG COUNCIL TAX RISES TOLD TO HOLD REFERENDUMS

PUBLISHED BY THE GUARDIAN

THE COMMUNITIES SECRETARY, ERIC PICKLES, HAS ANNOUNCED THAT ANY LOCAL AUTHORITY PLANNING TO INCREASE COUNCIL TAX BY 3.5% OR MORE WILL BE REQUIRED TO HOLD A REFERENDUM ASKING LOCAL PEOPLE TO ENDORSE THE MOVE.

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

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

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

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

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

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

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

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

ARE YOU PAYING TOO MUCH COUNCIL TAX- CHECK HERE? 

COUNCIL TAX TO SOAR BY 30 TIMES INFLATION

PUBLISHED BY: THIS IS MONEY

COUNCIL TAX IS TO RISE BY 30 TIMES THE RATE OF INFLATION, DESPITE A PLEDGE BY TOWN HALL CHIEFS TO HELP STRUGGLING FAMILIES. 

On the rise: People could soon be paying more for Council Tax. They promised 'enormous' efforts to keep bills down yesterday, saying: 'Councils understand that people are suffering' – before warning the tax would rise 3%, even though inflation stands at 0.1%. 

The increase will mean an average bill in England will go up by £34 from £1,145 to £1,179.35. The tax for a benchmark Band D house will rise by £41 from £1,373 to £1,414. The figures from the Local Government Association are based on information provided by 52 local authorities. 

Councils are under pressure from ministers to keep increases down when the bills land on our doormats next month. Those who impose unreasonable increases will have their spending capped. 

The 3% increase compares with inflation of 0.1% as measured by the Retail Prices Index, which is regarded as the most reliable measure because it takes mortgage and housing costs into account. 

The government favours the Consumer Prices Index, which does not include mortgages. This was at 3% last month, but is expected to fall below 2%. Matthew Elliott, of the TaxPayers Alliance, said: 'Council Tax rises are totally unacceptable when people are struggling to put food on the table.' 

Local authority chiefs said income from charges had fallen because of the fall-off in construction and the housing market, and because fewer people were using car parks and swimming pools. 

However, Council Tax bills have more than doubled since 1999. The LGA said: 'Town halls are making enormous efforts to keep bills down.' But a quarter of the tax pays for town hall pensions. 

Councils also lost nearly £1bn in October's Icelandic banks collapse. Local Government Minister John Healey said: 'There is no excuse for excessive tax rises or service cuts. We will take capping action where necessary to protect taxpayers.'

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

ARE YOU PAYING TOO MUCH COUNCIL TAX - COUNCIL TAX CHECKER  

COUNCIL TAX KEEPS ON CREEPING UP

PUBLISHED BY: THIS IS DEVON

CAMPAIGNERS HAVE MADE FRESH CALLS FOR A RADICAL OVERHAUL OF THE COUNCIL TAX SYSTEM AS THE AVERAGE ANNUAL HOUSEHOLD BILL IN DEVON CREEPS TOWARDS £1,500.

Residents in Cornwall will pay just over £1,200 this financial year, after the rate was unified under the new county-wide local authority. But for those living in the former district areas where Council Tax was previously lowest, it represents a rise of just below 5 per cent.

The economic downturn has seen some Devon district councils freeze their precept to try to ease the burden on residents. But, as the inflation figure used to determine wages turned negative for the first time last month, and the credit crunch continues to bite, many will struggle to make the payments.

Elderly people and those on fixed incomes can be particularly hard-hit by the tax, which is calculated according to the value of property. Many believe a system based on income would be fairer.

Albert Venison, chairman of the Devon Pensioners Action Forum, which has long campaigned on Council Tax, said those who had been prudent savers throughout their lives were now finding they could not afford simple luxuries because their of the tax burden, coupled with the plummeting value of their assets.

He said: "The average rise across the board is about 3 per cent this year, but you have to remember that that's on top of all the other increases that we have seen in the past. It means people who have been careful savers are suffering."

The warning came as the Government hailed the lowest rise in Council Tax for several years. Local government minister John Healey said: "Most councils across the country are tightening their belts, which is exactly what the public wants to see."

Teignbridge District Council has prided itself in keeping Council Tax low, and managed to freeze its precept in 2005. But this year's rise of 3.5 per cent is one of the highest of any Devon district. Leader Alan Connett said the recession would leave the authority around £300,000 worse off this year, but said councillors had frozen parking and leisure charges to boost business and tourism.

He said his own view was that the current system was a "disaster". "In areas where the average salary is quite low, you can't have a uniform system of property tax," he said. "It should be based on a much fairer system of people's ability to pay. "It's a rubbish system and it should be scrapped."

Earlier this month, the WMN revealed that 40 per cent of local government funding now comes from Council Tax, compared to 30 per cent when Labour came to power. Any drop in Whitehall's funding to local authorities means councils are forced to make up the difference by raising their precept of the levy.

Devon County Council has imposed an increase of 2.89 per cent, an increase of just under £30 to the new rate of £1094.67. In the unitary areas of Torbay and Plymouth, residents do not pay the county council. Instead, this year they will pay £1,227.40 to Torbay Council, an increase of just under 4 per cent. Plymouth residents will pay £1,209.71 – 3.5 per cent up on last year.

The police precept has risen by 4.94 per cent – just below the level at which it could be capped by the Government, forcing a costly recalculation process. It means the average home will pay £149.22, £7.02 more than last year. In Devon, residents will also pay £69.18 towards the fire service, up £2.60 on last year – a rise of 3.9 per cent. In Cornwall, the service is provided by the county council, and included in its tax income.

This year, an average band D property in Cornwall will pay £30.64 more than last year under the new unitary authority. But for areas such as Penwith, which previously enjoyed low Council Tax payments, it represents a rise of 4.9 per cent.

Penwith District Council leader Roger Harding said he had fought for the increase to be phased in, adding that people are "almost at breaking point".

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

ARE YOU PAYING TOO MUCH COUNCIL TAX - COUNCIL TAX CHECKER 

BUDGET: OSBORNE IS WARNED AGAINST 'SENSELESS' CUTS

First Published by: BBC

THE BUDGET IS LIKELY TO PROVE A CRUCIAL MOMENT FOR THE GOVERNMENT

The coalition government has been warned against making "senseless" cuts in spending ahead of Tuesday's Budget. Unions said harsh action was not needed, while Labour accused the Tories of cutting for ideological reasons and using the Lib Dem partners as "cover". 

But Deputy Prime Minister Nick Clegg said cuts were needed as the economic situation in Europe had got a lot worse in recent months. These would be "difficult" but done "with care", he insisted. In an e-mail to party members, the Lib Dem leader acknowledged that the Budget - expected to be dominated by announcements of spending cuts and tax rises - was likely to be "controversial".

But he said the "mountain of debt" that the coalition had inherited from Labour needed to be dealt with. "Without action on the deficit, we will carry on racking up unaffordable debts our children will have to pay off," he said. "And we will undermine the economic growth needed to create jobs and opportunities for all of us. There is nothing fair, liberal or progressive about any of that." 

The problem facing George Osborne is that he knows where we're spending all our money - public sector pay, pensions and benefits - but getting much of it back any time soon is going to be incredibly difficult. Take welfare. Yes, there are potentially huge savings but welfare reform is a long, slow slog. 

All the evidence from the United States, where they've already gone down this road, is that in the short term welfare reform actually costs money. Why? Because you have to provide more support, advice, training, childcare and so on to move people off benefits and back into work. Similarly with pension reform - Yes, you can reform the system for the future, but there's not much you can do about those already receiving what Nick Clegg called "gold-plated pension pots."

So while the coalition is keen to press ahead with pension and welfare reform, it isn't going to solve our immediate budget crisis. The bad news is that can only mean - in the short term - steeper cuts and tax rises elsewhere. Chancellor Mr Osborne has said the Budget will lay out "tough" but necessary plans to bring down borrowing - set to total £155bn this year - over the next four years. 

The opposition, unions and employer groups have all expressed their concerns ahead of the chancellor's statement at 1230 BST (1130 GMT), as speculation continues that it could contain a rise in VAT and a public sector pay freeze beyond the one year already proposed. Other measures expected to be included in the Budget are a levy on banks and an increase in non-business capital gains tax.

Mr Osborne has refused to say whether there will be a multi-year freeze on public sector pay, or confirm newspaper reports that welfare payments may be frozen although he has ordered a review of public sector pensions.

Prime Minister David Cameron has already suggested public sector pay and pensions will be hit, saying the deficit could not be dealt with by "just hitting either the rich or the welfare scrounger". Updating MPs on Monday on the outcome of last week's EU summit, Mr Cameron said there was "unanimity" among European leaders about the need for prompt action on cutting national deficits, saying any delay would entail "major risks" to economic recovery.

All EU countries were having to take "painful action" to cut borrowing but it was the "right thing to do" for future confidence and prosperity. And Mr Clegg insisted that while "cuts must come", they were born out of economic necessity not driven by political dogma. He said the economic situation in Europe had deteriorated significantly in recent months and accused Labour of both making unfunded spending promises and "covering" up details of post-election cuts they were planning.

"We have taken the difficult decisions with care and with fairness at their heart," he said. "But nonetheless, it will be controversial. This is one of the hardest things we will every have to do." One Liberal Democrat MP, Bob Russell, has already said he will vote against any package of measures which risks leaving children worse off.

The BBC's political editor, Nick Robinson, said Mr Clegg's attempts at reassurance reflected the fact that this Budget would be a "bigger test" for his party than the Conservatives. It is very, very important indeed that voices are raised against... unfair cuts that endanger not just our society but our economy as well” Shadow chancellor Alistair Darling said the Conservatives were "using the current circumstances" as an excuse to make "ideologically driven" cuts they had planned anyway and said they were "using" the Lib Dems "as cover". And Mr Miliband, one of the contenders to be Labour leader, said the coalition cuts risked turning Britain into a "slow-growth economy". 

"It is very, very important indeed that voices are raised against senseless cuts, unfair cuts that endanger not just our society but our economy as well." General secretary of the TUC, Brendan Barber, said the chancellor's approach was "based on a series of myths". "Deep urgent cuts are not needed, and run the risk of the double dip [recession] - especially now much of Europe has signed up to the same deficit fetishism," he said. The TUC also warned against a VAT rise, saying such a move would be "deeply regressive" and those on low incomes would "barely be able to absorb" the cost. 

CouncilTax freeze:

Local authorities said they would face "very, very difficult decisions" in the future as central funding was reduced. "It makes things very difficult in terms of how we prioritise our services," Sir Steve Bullock, chairman of Local Government Employers, said. In a move intended to partly soften the anticipated blow of cuts and tax rises, it is understood the government will press ahead with plans to encourage a Council Tax freeze in England next year.

The Conservative manifesto proposed a two-year Council Tax freeze paid for "by reducing spending on government consultants and advertising". That plan involved providing extra funding to councils who proposed only small Council Taxincreases, so they could then freeze them. It is not entirely clear yet how the coalition government's plans would work, or how much it will cost. 

But as well as the Council Tax freeze - and the decision to axe Labour's plan to raise more money from a National Insurance increase - the Budget will also provide a partial National Insurance exemption for new firms based outside the south-east of England.

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

ARE YOU PAYING TOO MUCH COUNCIL TAX - COUNCIL TAX CHECKER

TAXPAYERS' ALLIANCE ATTACKS SURREY COUNTY COUNCIL'S TAX DECISION

First Published by: THE TAXPAYERS ALLIANCE

THE TAXPAYERS’ ALLIANCE HAS CRITICISED SURREY COUNTY COUNCIL FOR PLOUGHING AHEAD WITH A COUNCIL TAX INCREASE. 

Councilors voted through the decision to increase its portion of the CouncilTax by 2.99 per cent at a meeting on Tuesday. All the Conservatives present voted for the increase, while all the Liberal Democrats voted against. 

Resident Association members and independent councilors voted no to a rise or abstained. The Taxpayers’ Alliance hit back at the authority after the vote and suggested areas where savings could be made in order to keep Council Tax down, which has increased by 72 per cent over the past 10 years. 

They included looking at pay based on the fact Surrey’s chief executive received a total remuneration of £253,133 in 2010/11 – more than the Prime Minister – and councillor allowances for the same time period cost taxpayers £1,582,000.

Matthew Sinclair, director of the TaxPayers’ Alliance, said: “The council have let people in Surrey down by imposing a big hike in Council Tax on residents, so many of who already struggle to pay. “Over the past 10 years there has already been a drastic increase in Council Tax bills and, with so many other pressures on their finances, this is the last thing families in the county need.  

“Surrey needs to follow the example of other local authorities who have shown it is possible to combine quality services with lower bills, and deliver much better value for money.”

The Government offered all councils a one-off grant of 2.5 per cent for 2012/13 if they froze Council Tax for another year. But Surrey declined the grant on the grounds it was a short-term gain for long-term pain and accepting it would lead to a financial black hole – a £70m shortfall over five years Leader of the council Councilor David Hodge said: “For many other councils in the country, the Government offer is a good one. 

“But after exhaustive analysis, my cabinet and I believe that this one-off CouncilTax grant is not in the medium to long-term interest of Surrey residents. “We must do what is right for the residents of Surrey over the long-term and not accept short-term assistance that will imperil our financial stability in years to come. 

“While the rest of the country may suffer hard times in the coming years if the economy continues to stagnate, I can assure everyone that the whole team at Surrey County Council is working to achieve the best of times for the residents of Surrey.”

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

ARE YOU PAYING TOO MUCH COUNCIL TAX - COUNCIL TAX CHECKER