Commenting on Proposed Council Tax Rises


Wednesday, January 30th, 2013. 12:45am

The Conservative party is split on the question of council tax rises. Conservatives in central government are saying they want to see council tax kept at its current level, but locally in Cambridgeshire we’ve got a Conservative Police and Crime Commissioner and a Conservative run County Council who are proposing council tax rises.

I have previously commented on Police and Crime Commissioner Graham Bright’s announcement that he plans to raise the policing element of council tax and it was as a result of that article I was invited to talk to the ITV national news reporter who visited Cambridge on the 28th of January 2013 to film a report on the council tax rises we are facing here.

I suggested to ITV news that they might want to speak to Cambridge Conservative Agent Timothy Haire who has publicly opposed the Conservative led County Council’s proposed council tax hike. I thought that pitching his views against those of the County Council leader, Cllr Nick Clarke, would illustrate the split at a local level.

Cllr Clarke has expressed a view that people vote for party brands; the problem when you’ve got a party’s ministers saying one thing, and councillors from the same party in power locally actually doing another is that voting on the basis of a party brand no longer makes any sense, as it’s not clear to voters what they are getting.

Police and Crime Commissioner Graham Bright has argued that he is imposing no-extra burden on council tax by with a 1.9% rise on the grounds it is below the rate of inflation. I think that inflation isn’t the key figure here, it’s not what’s important when working out what extra burden a tax rise will have on people, what matters is the people’s incomes and those in many cases are not going up as fast as inflation at the moment.

The Office for National Statistics’ latest figures report:

This was one point I made which made it onto the national news, where I featured for about eight seconds.

People on fixed incomes such as pensioners will be particularly hard hit by council tax rises.

Income Tax, where the more you earn the more you pay, is in my view a fairer tax than council tax; and while I think a local element of taxation is acceptable and helps provide a link between taxation and representation I would not like to see a greater shift towards funding local services from council tax rather than general taxation, the largest fraction of which is Income Tax.

One of the other key points which was put to me was that Cllr Clarke was defending his council tax rise by saying Cambridgeshire is growing, and more homes are being built in the County. I responded to this by noting that this means the council tax take rises automatically as more households pay the tax; it doesn’t follow that council tax rates ought rise.

There were many other points which didn’t make the TV which I’m able to expand on here:

  • I agree with Cllr Nick Clarke; a referendum would be scandalous waste of taxpayer’s hard earned cash. Councillors are elected on the basis of their manifestos and it’s at election time that people get to decide what they want. Personally I would like to see councillors come up for election more often; I’d like my three city councillors, and my county councillor, to all be up for election at the same time each year. This would mean councillors breaking their promises, or simply not performing could be removed quicker. This would not cost more, as elections are being held each year anyway – it’s just I can only vote out one of my four councillors in any one election.
  • Uncertainty about future levels of central government funding for the police and local government services appears to be driving our local elected representatives to increase council tax. Giving grants for a year, or two, at time from central government is the problem. I don’t personally agree with the view that council tax needs to be increased now, just in-case a cut in central government funding means it might otherwise need to jump in future years. I’d say take the central government money now. Imagine a domestic analogy – if central government offered to pay £200 towards your gas bill this year, would you take it, or would you refuse on the grounds that they might not give you the £200 next year so it might feel like your gas bill had gone up a lot.
  • Central government needs to put much better incentives in place to encourage local government to cut costs. Its current short term council tax freeze grants and requirement for expensive referenda are bonkers, and ineffective.
  • We need to elect councillors who will reform, and redesign, local government, making it work smarter, making better use of technology – perhaps locally looking to the Chief Constable’s approach to making policing more efficient for inspiration.
  • Local government also needs to be given the incentives to take actions which will make savings for the wider state. For example a lot of Cambridgeshire County Council spending goes on supporting older people and providing care. If the council does its role well it can keep people out of hospital saving money for another arm of the state – the NHS (as well as improving people’s quality of life). The problem is that the council doesn’t, in almost all cases, have the financial incentive to invest money into making savings for the state as a whole. Putting these kinds of incentives in place is the kind of way central government ought be reforming the way local government is funded, rather than attempting manipulation by the crude council tax freeze grants and referendum requirements.
  • Council tax freezes are very confusing. People hear ministers announcing them, but the don’t happen because local councillors don’t take action. People hear one of their councils announcing one, perhaps even the one which prints the bill and takes the money, but the bill goes up anyway because another council, fire authority, or police and crime commissioner have decided to increase their element.

Effort and Resources

The effort and resources which are thrown into a few seconds worth of TV or radio are often astonishing. For the short piece from Cambridge there was a producer working from London arranging things, a team of three in Cambridge: presenter, camera operator and producer, as well as I was told an outside broadcast team meeting up with them at some point to send the material recorded back to base.

Cambridgeshire County Council press officers were also involved in arranging the interview with Cllr Nick Clarke and ensuring the council’s strict rules, policies and practices, controlling such filming were enforced.

Filming my interview involved the crew spending £8 on drinks (in return for which they got to film in the pub, which then got shown on the national TV news); and the tea cups were carefully arranged on the table, and the crew even lit the candles specially! The professionalism was impressive and my few second includes three different types of shot – me speaking, the interviewer, and the wider shot of us talking at the table; that’s in addition to the shot showing where we were sitting in relation to the Shire Hall. (The reason we were in the pub was it was raining too hard to do the interview outside).

Caption: “Local Businessman”

The caption of “local businessman” has caused some comment, with County Council Leader Nick Clarke writing in his blog:

I was surprised to see Richard Taylor, described as a local businessman, on the feature.

Cambridge City Councillor Colin Rosenstiel tweeted

“Described as a local businessman” @RTaylorUK #chuckle

Resident Andy Bower jumped in with:

But he is, isn’t he?

I think this raises an important point about how the media portray those with views on how society is run. Sometimes describing people sensibly in a caption is easy; for example often people are speaking in a particular role, or as a spokesperson for an organisation. Often though due to the pressure of time, and the need to simplify a story in order to get it across and you end up with someone say speaking captioned a “cyclist” and someone else as a “motorist” to take a common example. People generally can’t be summed up in a word or two. Many cyclists also drive.

I actually proposed: “Council Tax Payer”, or “Cambridge Resident” as those appeared my most direct interest in the subject matter. I also offered them my web-address of rtaylor.co.uk.

The County Council’s ex press officer Andy Alsopp suggested

I think ‘keen cyclist’ is a much better description. For a start, it’s true ;-)

All the labels are true; as are “transparency activist, democracy evangelist, civil liberties campaigner” and many more.

Perhaps councillors Rosenstiel and Clarke would like all members of the public commenting on their actions to be captioned “local nutter”, and perhaps forced to inhale helium to subtract credibility from what they are saying?

As for who I am; well I’m Richard Taylor, and perhaps the best way of saying which Richard Taylor is to say the one of rtaylor.co.uk – there’s loads of background there from which anyone use to make up their own mind on how, if at all, I ought be described.

(The spelling of Rosenstiel has been corrected at various points in this article)

9 comments/updates on “Commenting on Proposed Council Tax Rises

  1. cobweb

    Using the term ‘cyclist’ does, however, give the impression that using a bike is only for certain people and not simply a mode of transport. Putting ‘keen’ in front of that is even worse.

  2. John Ionides

    AIUI, the problem is that the grant for freezing the council tax corresponds to only a 1% increase, and of course you loose any cumulative effects in subsequent years. The other main income stream – funding from central government – is shrinking (6.4% this year IIRC). In addition, the central government funding formulae do not generally take into account all of the local growth. These factors make it very difficult to set a budget on a 1% Council Tax increase. Also bear in mind that a lot of the spend is on statutory services (esp with regard to adult social care, an area which already represents a large proportion of the non-schools budget and in which the scope of the council’s duty of care is being significantly extended over the next year). Pinching the budget too hard raises the real risk of cuts being shunted onto services such as libraries where the statutory protection for the service is relatively weak.

    In terms of the impact of extra housing, central government funding means that the local spend significantly exceeds income from Council Tax; the Council Tax revenue from the additional houses only goes part of the way towards covering the additional liabilities.

  3. stephen ginns

    I wish someone could look at the City Council Income/Expenditure accounts shown on the Internet, and tell me just how much of the total Council tax income is spent (net) on housing. It seems to be an enormous percentage – but I’m not an accountant. So much that it dwarfs every other category!

    1. Richard Taylor Article author

      What do you mean by “housing”?

      Generally council housing maintenance etc. comes out of a ring fenced fund called the “housing revenue account” which is where all the money which comes in from council house rents is paid. The rent income and related charges are the source of funding there. If there is a surplus or deficit in that account it remains ring-fenced; it isn’t topped up from council tax. In 2011/12 the income from council house rents etc. significantly exceeded the expenditure on them.

      In 2011/12 central government took ~£12m of Cambridge’s £30m rental income to redistribute elsewhere in the country. This redistribution mechanism has now stopped, it isn’t happening in the current year, but the council’s housing revenue account gone massively into the red as the council has paid central government ~£200m (its share of the national housing related debt). Again though that’s still all ring-fenced and the accounts for the Housing Revenue Account are presented separately in the council’s accounts.

      If by “housing” you mean other things like supporting the growth of the city then that is in-part funded by council tax, but developers pay for a planning application to be considered so council tax isn’t the only funding source.

      In any organisation where there are multiple sources of income and multiple ways money is spent it’s hard to say which income is funding which expenditure when in effect it all goes into one pot (the Council House rents being a clear exception as that pot really is accounted for separately by law).

      Council Tax income is only one part of Cambridge City Council’s income. The latest accounts (to April 2012) shows £6.8m of income from the city’s share of council tax, and £10.1m from central government. The council also raises income from car parks, commercial lettings, trade waste collection and other services (the council’s statement of accounts are relatively poor at showing these sources of income which I think shows the lack of councillor input into the way they are presented, because a number of the leading councillors are rightly quite proud of their work on increasing this self generated income).

    1. Richard Taylor Article author

      Phil Rodgers is referring to the 2012-13 planned budget. I referenced the 2011-12 accounts which report what happened.

      The budget for 2012-13 says £2.7m is to be spent on “Housing Services (Excluding Housing Revenue Account)”

      I don’t know what that means; it could be on Housing related items which are not paid for out of rents? Perhaps things like some advice and some of the council’s work playing at policing (which it focuses on its estates of council houses)?

      screenshot showing copy and paste blocking error message

      [The Council Tax leaflet linked above by Phil Rodgers has copy and paste blocked - perhaps an attempt by our councillors to hinder people discussing how they spend our money?]

      The council’s accounts are well obfuscated; or at least not designed to help residents understand what the council is doing.

  4. Richard Taylor Article author

    The City Council’s budget is around £100m

    Even that apparently simple statement hides a huge amount of complexity.
    The 2011-12 statement of accounts states on p3 : “the Council agreed a budget for net spending of £16.9 million”

    If you include all the rental income as well as council tax and rates council collects (most of which it has to pass on to others like the county council or central government) then you can get very large total turnover figures for the city council but they don’t really reflect the size of the city council’s own budget which it has control over.

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