Feb 2009 25

Wake up and smell the discontent…3

It has been reported in the Daily Telegraph and elsewhere today that council tax is set to rise by a staggering 3% in April. The LGA issued a somewhat contradictory statement, announcing the rise and then saying that councils were working 'flat out' to keep council tax down and that they understood that 'everyone was feeling the pinch'.

What's wrong with this picture?

Firstly, this rise is far above inflation. Current RPI index shows inflation lying at 0.1% – putting this rise at around 30 times inflation. At a time when people need every spare penny to make ends meet, how can councils put this kind of additional burden on them? It is morally indefensible.

Further, it is totally unnecessary. Councils have so much fat in their budgets, they could easily implement a council tax freeze, if not cut. They need only look to the TPA's Ten Per Cent Challenge, and our Council Spending Uncovered series to find ready-made, common sense policies that will deliver real savings to taxpayers and enable councils to start cutting that sky-high council tax, right now when people need it most. 

Far from working 'flat out' to keep council tax down, many councils are so out of touch that they have not reined in spending at all. A prime example of this is Kent County Council's decision to award over £100,000 in bonuses to senior employees. This, despite the fact that they lost £50 million of taxpayers' money in the Icelandic banking crash. Time after time, we see public sector employees being rewarded for failure, at a time when they should be institutionally and personally eschewing any pay increases or bonuses.

Once again, we see councils' rheotric to be at odds with their actions. They are out of touch with the very people they are supposed to represent. Council tax has doubled over the last ten years, and taxpayers are now starting to wake up and tell their councils: no more.

As the self-titled 'voice of reason' from Gillingham wrote: "It's about time these senior council officials, like the bankers, accepted their moral responsibility amd immedately waived their right to any bonus in the light of their poor performance.

"They are getting paid market rate public sector salaries, and I believe it's totally unacceptable that these people should be receiving bonuses out of public money at all, let alone in the current climate. If they are so worthy let them find alternative, if they can!"

Quite.

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  • http://www.systemicfiscalreform.org Robin Smith

    You forgot to mention the proportion of income people pay in income tax, vat, cgt and then compare it with council tax. Tiny isn’t it? Council Tax is about 5% of income on median. So that makes a 3% increase on 5% = 0.15% or about £36 a year for those on median income.
    I agree there is huge huge waste in the LA establishment. You can only blame them for not acting, they make almost no regulation these days that matters. Its centrally driven. They have no power at all. Impotent. A scapegoat for unjust central fiscal policy. I know this as a former council officer and present Councillor
    All the best

  • Graham

    RPI includes mortgage interest so has fallen rapidly due to cuts in the Bank of England base rate.
    I doubt many councils have mortgages so either RPIX (2.4%) or CPI (3%) both of which exclude mortgage interest would be a better comparator.
    The low RPI inflation hasn’t hit wages which are still up 3.6%

  • Brian

    When I complained to my local MP Fiona Mctaggert about Council Tax rising, she told me to go and live in the Labour run council area adjacent to Slough as it was not going up as much. Such wonderful advice !!
    My complaint was regarding a wholly unneccessary 20 mph zone scheme in all of the cul-de-sacs in Cippenham. 3000 houses consulted, 200 replies, 126 for the scheme. Thats about 5% in favour. This was surely no mandate to go ahead with the scheme, especially in times of recession. This proved to me that Slough council definitely has no intention of working flat out to reign in costs. And Cameron wants to give them more control!! They’re a law unto themselves already. No wonder people are fed up with politics.