Jonathan Werran is the chief executive of Localis.
Council tax has been accused of many things and many sins. An ossified patch and repair job on the doomed Poll Tax from the early months of John Major, it is routinely dismissed as ‘outdated and unfair’. Public finance experts deride it as ‘dramatically regressive’.
However, despite the brickbats, council tax could be the platform for civic renewal and community empowerment. Here’s how.
Currently, adult social care and statutory services are taking the bulk of council budgets – 56p of every pound paid in council tax in 2019 / 20 will be spent on adult and children’s social care. Your average council taxpayer would be well-minded to query what services they are actually getting for their money.
This is why the council tax cap is no longer fit for purpose. During the early years of the Coalition, while money from the Treasury could fund a council tax freeze, the imposition of a two per cent referendum trigger as a policy made perfect sense. As solid a slug of retail politics, it showed due sensitivity to the cost of living agenda as you could wish to see.
In an exercise in being seen to do something to plug the unbridgeable social care funding gap, we have seen the cap rise to six per cent.
But now the freeze money has melted away, it’s time for centrally imposed caps on council tax charges to end and for the abolition of referendum triggers enshrined in the Localism Act.
This is the conclusion of Localis’s new report – Monetising Goodwill – which found the majority of people would be willing to pay more in council tax or voluntary one-off levies to better fund local services.
Failing that, James Brokenshire as Secretary of State for Housing, Communities and Local Government, should set council tax referendum thresholds at a rate that enables places to set hypothecated taxes and levies more freely.
Like the social care precept, the Secretary of State should stipulate that greater freedoms are used specifically for hypothecated taxes and levies, and for services and issues that reflect public will.
And to that end local people must be given the right to choose and vote on local spending priorities.
For example, people living in the East Midlands – the region most keen to pay extra tax, show a marked preference to pay for better roads and to repair potholes. Support for homeless people and faster Wi-Fi speeds would get the Yorkshire pound while social housing and clearing up dog mess are top priorities for those living in the North East.
Local authorities should use their existing council tax platforms to give citizens the opportunity to direct new and existing funding in line with their priorities.
This could mean enabling residents to direct up to twenty percent of total revenue raised to specific services and for achieving certain outcomes.
Following the lead from Westminster City Council, authorities could include the voluntary option to pay higher funding directed to specific services, on top of the core bill.
They could also allow residents the opportunity to vote on specific spending packages. There is a willingness to pay extra to fill gaps in local provision. And as the nation reaches a tipping point on austerity in local services, local areas should be provided with the freedoms and platform to monetise that goodwill.
This agenda isn’t about raising ever higher taxes and increasing the power of the local state. It is, rather, an opportunity to renew civic bonds. To this end, any extra funds which are raised by voluntary levies should be allocated to community groups for the purpose of delivering local services.
Community-led organisations can be entrepreneurial and creative with a vested interest in a way that a council cannot. They are also more likely to attract a higher level of public support for higher contributions raised through hypothecated local taxation.
This could be an opportunity to convert local patriotism, pride and sense of place into something tangible and real in a way the Big Society and latterly the Shared Society have failed to accomplish. It is a chance to put Edmund Burke’s fabled ‘little platoons’ into the field of civic battle.