Published:

12 comments

judyterr

Judy Terry is a marketing professional and a former local councillor in Suffolk.

Inequality across the country is about to get worse when, within the next few weeks, we’re told how much our council tax will increase. As usual, the burden will fall on the lower and middle earners, already under pressure from rising train fares and supermarket charges, because those in the most expensive properties don’t pay their fair share.

There is something wrong with a system which allows someone in a provincial town to pay the same council tax for their small terraced house worth around £150,000 as someone in a multi-million pound property in one of the more affluent parts of London, or a mansion in the country.

Surely it’s time to review banding for all properties worth more than £500,000? In contrast with the labour intensive and expensive physical drive-by valuations required for previous reviews, it could be done easily and quickly, because valuation data is already available on Rightmove and Zoopla; modern technology, even employing drones, could also enable desktop valuations of individual properties which pass from one generation to another, or haven’t come to the open market in years.

A successful outcome would increase income by many millions, and a percentage (50-60 per cent?) could be diverted to a special fund reinventing the idea of ‘twinning’, to support partnerships between the best and poorest authorities.

Ironically, the richer areas are usually better managed by their local authorities, yet troubled councils rarely seek their advice on how to improve and streamline services, unless put into special measures by the Government, which takes years.

Putting up council tax in the poorest parts of the country – the British ‘rust belt’ of former industrial and coastal towns – produces negligible additional income because property values are low, and a higher than average proportion of residents will be exempt from paying. Consequently, their economies won’t see any of the improvements so freely promised by politicians elsewhere because there isn’t the money or – more importantly – the vision to transform them. They lack ambition and focus, and can’t attract the best professionals, whether administrators, doctors or teachers, let alone entrepreneurial businesses with substantial funds to invest in new ventures, creating skilled jobs.

With the right incentives, ‘twinning’ successful towns with those in depressed locations could be the solution, despite being a cultural challenge for both parties!

In the meantime, the proposed two per cent council tax rise to be ‘ringfenced’ for elderly social care, will undoubtedly be matched by at least a further two per cent to meet the increased costs of managing the public services we all expect, despite extensive cuts which have reduced bin collections, libraries, and bus services in many areas, whilst car parking charges are now so expensive, the High Street is suffering, with retailers deprived of custom.

Whilst many councils have substantial reserves, they continue to commit themselves to excessive borrowings to buy sites and build more council housing, which would be largely unnecessary if they worked with developers constructively and pragmatically to speed up the planning process. Modern prefabricated construction methods can deliver more affordable homes for people to buy more cheaply in a few months, rather than years. In the meantime, the bill for such borrowings, as well as providing more housing at well below the actual cost of building and managing it, falls on communities. Too many decisions seem to be made on impulse, without a long term business plan evaluating the risks and benefits, linked to strategies to attract more jobs.

We should remember that one of the reasons that the Thatcher government introduced Right to Buy was because so many council properties, including housing, hadn’t been maintained and the public sector simply couldn’t afford the cost of bringing them up to standard. This was certainly the case in Ipswich, when I first became a councillor in 2004, when the Conservatives inherited a £25m backlog on building maintenance from Labour. So a business plan is essential.

Although 1.4 million people are on council housing lists, most people want to own their own home rather than being dependent on the State; public housing actually reduces choice, trapping people because they can’t move their families to seek better job opportunities in other areas.  As they age, many still live in family homes instead of downsizing but cannot afford the rent, whereas homeowners can usually pay off their mortgages on retirement. This means ever greater subsidies are required to compensate, adding to the council tax bill. It creates a downward spiral, stifling aspiration and independence. It also inhibits beneficial development, because demographics matter when retailers and entrepreneurs are choosing where to locate their businesses.

Council housing is essential for those who have no choice, but it should not be regarded as the only option, especially given tenants’ eventual right to buy at a discount. Instead, ownership gives people some equity which means greater freedoms over the longer term, so shared ownership schemes should be more widely offered as part of the mix, alongside Government schemes.

So, with the inevitable rise in council tax, it seems that the ‘man in the street’ is a cash cow, unable to do anything other than suffer further raids on personal budgets. It is too easy for those making the decisions to overlook the fact that their victims are usually paid a fraction of what they themselves earn.

Inevitably, the detail is buried in incomprehensible finance reports quoting percentages instead of actual figures (two per cent is meaningless to most people unless presented as a sum of money), given to Cabinet and Full Council. Since most councillors don’t understand, or bother to read the proposals, it’s hardly surprising that they are rarely challenged with valid arguments, so are waved through.

Instead, councils should be required to publish key data in an easily understood format so they can be held to account by the public, including the media, for their decisions, including:

  1. The amount of money held in ‘reserve’ and for what;
  2. The total number of properties within a council area, identifying the number in each band and the amount of council tax paid per band in each year for the previous decade;
  3. The extra sum for each band being proposed for the next financial year Identifying where the money goes, i.e. Police Service, County Council, Borough Council (and as appropriate for London and other city boroughs);
  4. The number of single or other residents, eligible for a discount;
  5. The number of households which do not have to pay any council tax, and the reasons;
  6. The number of households which have been prosecuted within the last decade for non-payment, the total sum involved and how much remains outstanding and/or has been written off (this can run into millions of pounds);
  7. And, finally, total income from council tax over the last decade, year by year, and projected income with the proposed increase.

Councils should also include data on the number of subsidised housing units they provide, both council owned and housing association; the total rental income, as well as the number of units where residents don’t pay any rent, or only a percentage. The total annual costs to the public purse of maintaining and managing these properties should also be identified.

Such transparency would enable residents to judge value for money, and compare with other authorities. It would also concentrate the minds of officers and the decision-makers. Should ‘twinning’ be introduced, the authorities in most need, as well as those best suited to help, would be easily identified for the scheme.

12 comments for: Judy Terry: Council Tax hikes hit the working poor hardest

Leave a Reply

You must be logged in to post a comment.