At the Conservative Party Conference, we held a session looking at practical ways councils can reduce spending and cut Council Tax. This took place in the Freedom Zone, which was open for all to visit. Some great ideas were discussed, such as sharing services and never accepting the first offer on contract negotiations.
Carl Thomson, a Councillor from Woking, discusses his experiences of delivering value for taxpayers’ money below.
If you are a Councillor and would like to share your experiences, please email [email protected]
Carl Thomson is the Conservative Councillor for Mount Hermon East on Woking Borough Council, where he has been a member of the executive and is chairman of the licensing committee.
Residents in Woking believe the Council is delivering real improvements through redevelopment of a tired and dated town centre, provision of modern leisure facilities and new affordable housing. But they also know that we are achieving this by sticking to simple principles like cutting costs, getting rid of unnecessary bureaucracy, keeping Council Tax low and working with private sector partners to give people more efficient services and better value for money.
The financial situation has not been good for councils in the past few years. With the further 10% reduction in local government funding announced during the recent Spending Round, Woking will have seen its central grant cut by 40% over this parliament, and it is unlikely to stop there.
However, prudent local authorities will have seen far in advance that economic conditions were likely to be challenging for some time, and will have thought seriously about how to get more for less long before the Coalition’s first spending review in 2010. As far back as 2007, Woking introduced an ambitious target for a reduction in the number of council employees. As a result the Council has seen the number of Full Time Equivalent staff members fall from 510 in 2006-07 to 350 in 2012-13.
This reduction of the Council’s workforce by one third was achieved through a freeze in recruitment, combined with reducing numbers through natural wastage, terminating temporary and contract staff, considering different work patterns and practices, merging positions and redeploying staff with retraining if necessary.
One of the biggest drivers of efficiency in Woking has been the willingness of the Council to embrace outsourcing and private sector provision where this can be shown to improve services and achieve savings for taxpayers. The Council has outsourced management of a significant proportion of its services, such as environmental maintenance, leisure and housing management. In 2011 the Council transferred the management of its sports and leisure facilities for a period of ten years, sharing the cost of improved services for residents. On housing, we have outsourced income, tenancy and estate management, lettings, asset management, inspections and investment works.
We have also been looking at other ways of getting the best out of the Council’s estate – vacant desk space in offices has been taken up by the neighbourhood police and community groups, giving the police a more visible presence in the town centre, reducing the need for larger grant payments to help meet the accommodation needs of voluntary organisations, and allowing the Council to gain an income from an otherwise unused resource.
It would have been difficult to ask council officers to make sacrifices if councillors were unwilling to do the same – so the executive abolished taxpayer-funded food and refreshments laid on for councillors before meetings, and the Council has rejected proposals for special responsibility allowances to be paid to committee chairmen and portfolio holders. We have also sought to reduce the cost of democracy in the borough. Prompted by the forthcoming review of local government boundaries, last month the Council voted to reduce the number of councillors by 18% from 2016, a move that will save the taxpayer more than £60,000 a year in expenses and allowances.
Those councils which protest about cuts leading to reductions in grants and frontline services need to reflect on the fact that such payments represent only a small proportion of the money local government spends. The biggest amount is on staffing and administrative overheads. Thanks to the approach we have taken, Woking Borough Council has been able to freeze Council Tax in three of the last five years – starting, incidentally, before the Coalition introduced a centrally-funded grant for local authorities which kept rises below 2%. Where the tax has been increased, we have kept this below the rate of inflation, and we have done all this with no reduction to services, and no reductions in grants or funding to voluntary organisations.
There are several lessons Woking has learnt in our efforts to become leaner and more efficient. The first is the need to establish political leadership and priorities early on. Our business plan made clear that we expected to see any increase in Council Tax kept below the CPI rate of inflation; that we wanted to see improved cost efficiency in all the services the Council provides; and that we wanted to restore the Council’s reserves to a position of financial health. By providing these objectives, we gave officers guidance and direction in their work as well as making clear what was expected at the end of the financial year.
The second lesson – and one which might sit uncomfortably with some readers – is that cultural change in large organisations can only happen when there is buy-in and support from those affected. Council officers aren’t the enemy. There is genuine talent and business expertise at all levels of local government. Council bureaucracy can rise to the challenge admirably when it is given purpose and direction, but do not underestimate the time and effort that needs to be put into making the case for change.
Woking is far from perfect – we are in the process of deleveraging our high borrowing against income-generating assets, and the symbolic but important cut in Council Tax has thus far eluded us; but I am confident that we have responded impressively to the new financial climate and the growing desire of our residents to provide services in the most cost-effective way possible, to become more self-reliant and less dependent on central government, and to promote the economic vitality of the borough.
HMRC published new data on Stamp Duty this morning which show increases in all regions. The biggest increase was in the North East, where HMRC took 25 per cent more from home buyers in 2012-13 than they did in the previous year.
The data also showed that a record-breaking amount was taken from home buyers in London, where receipts rose by 23 per cent to over £2 billion.
This confirms previous research by the TaxPayers’ Alliance showing how punitive rates of Stamp Duty are causing real problems for an ever-growing number of taxpayers. We also commissioned research from Walbrook Economics which found that cutting Stamp Duty would have a minimal effect on the revenues raised, due to the nature of the housing market. Lower rates would mean more people would move, increasing revenues not just from Stamp Duty but other taxes, too.
Responding to the publication of the Public Accounts Committee’s report, The rural broadband programme, Dominique Lazanski, Digital Policy Analyst at the TaxPayers’ Alliance, said:
“The Public Accounts Committee is absolutely right that no more taxpayers’ money should be spent on this scheme until the DCMS has delivered meaningful competition for the contracts and ensured that value for money is being achieved.
“There needs to be far more transparency about BT’s costs, take-up rates and roll-out plans to ensure that taxpayers are not being fleeced and so that other broadband suppliers can get on with filling the black spots not being covered by BT.
“Taxpayers should be deeply concerned that the broadband programme in its current form has seen hundreds of millions of pounds of their money wasted as a result of a centralised, one-size-fits-all scheme for fixed-line only internet connections.
“It would have been far better to let the private sector – including mobile and satellite providers – compete in an open market in different areas, each with their own communities and needs.
“Fortunately, a number of private companies and community groups are already addressing the need for internet access in spite of the Government’s bungled programme.”
Writing for The Spectator’s Coffee House, Matthew Sinclair argues that under Labour’s new energy plans, politicians will effectively renationalise the energy sector.
First politicians banned cheap energy. They are creating an affordability crisis by insisting on the rapid deployment of expensive technologies like offshore wind and by imposing endless green taxes. It is simply illegal to generate electricity at an affordable price with a modern, efficient coal and gas power plant, without bearing all of those other costs. Ed Miliband was one of the people who imposed those high costs on consumers, as the Secretary of State for Energy and Climate Change in the last government. Now his plan is to fix the situation by banning expensive energy too.
During a report on BBC News yesterday, it was highlighted just how crippling Business Rates can be.
When Ian Shaw lost his job, he decided to open his own Fish & Chip Shop in Rochdale. Unfortunately, after 18 months, he is being forced to close because of crippling costs. Mr Shaw pays £10,000 in rent for his business premises and a massive £18,722 in Business Rates. He told BBC News:
If I can’t make it work, no-one’s going to make it work. I have literally put my heart and soul into it.
He has the support of his local MP, Simon Danczuk. He told BBC News that property prices have fallen in Rochdale by 40 per cent over recent years, however Business Rates have remained the exactly where they are. This puts people off opening new stores, which leads to vacant properties.
Ian Shaw appears to be paying more in taxes than he makes in profit, which is not only unsustainable, but is clearly wrong. If the Government is truly concerned about the High Street, then it cannot continue to punish people like Mr Shaw who when after losing his job, did something positive, opened a new business, and provided much needed employment in his local community.
You can do something positive by supporting our campaign to freeze Business Rates. Go to FreezeBusinessRates.org and write to your MP. It doesn’t take long and it makes a real difference. People like Ian Shaw need to be encouraged, not beaten into the ground by excessively high taxes.
Responding to the report HS2 Regional Economic Impacts, Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance, said:
“The Government has squandered taxpayers’ money on a cynical attempt to win over the many, many people who think this white elephant is the wrong way to spend tens of billions of pounds of their money.
“If ministers want to develop a new appraisal method for transport projects then they should do that and see how it affects the business case for a range of strategic alternatives. That will help test whether the model is reliable and provide useful evidence about which projects offer the best value for money. Instead they have just decided that this specific project alone will be held to a new standard.
“The report is based on the dodgy assumptions in the Government’s own business case and the additional services they have promised, despite their budget actually relying on cuts to existing services.
“This is not a serious attempt to assess the merits of HS2, just another expensive propaganda exercise. The Government must scrap HS2 and look again at less grandiose, but better value, projects that can deliver the capacity needed on Britain’s rail network.”
The Public Accounts Committee (PAC) report High Speed 2: a review of early programme preparation is a devastating critique of the flawed rail project. We have consistently campaigned against HS2 since it was first proposed.Our previous research has highlighted many of the issues mentioned in the PAC report including the weak business case, hidden costs and absurd assumptions about the value of time spent working on trains.
The TPA will soon publish new research analysing the progress of HS2 and the inherent problems with the project.
Previous research includes:
Responding to the publication of the report, Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance said:
“This devastating report should set the alarm bells ringing at full volume inside the Treasury and the Department for Transport. The business case for HS2 is weaker than ever and the Public Accounts Committee could barely be more damning in its criticism of a project whose value is unproven but which will cost every family in the country thousands of pounds.“Week by week, the calls to ditch this project are getting louder and the sooner that the Government shunts this white elephant into the sidings for good, the better for the taxpayers who will otherwise be saddled with an eye-watering bill.”
Last week the Telegraph reported that 5,000 patients being treated by the NHS had been put into hotels for overnight stays. Freedom of Information requests showed 21 trusts have spent £1.6 million since January 2012.
The scheme has come under the attack of patients’ groups, who expressed their concern over the care of patients at these often luxurious hotels. Roger Goss, co-director of Patient Concern said the schemes were “an outrageous waste of taxes”. Even worse is that he thinks this can sometimes pose a risk to patients.
Examples of some of the hotels used include the four-star Mercure Sheffield St Paul’s Hotel and Spa. This has been used on eight occasions. The price of one night with breakfast normally costs around £94.
Is this really a justifiable way to spend taxpayers’ cash? It would better for the NHS to cut out wasteful spending in other areas so they can prioritise their resources – there are many examples of how they can do this in the Bumper Book of Government Waste.
New Land Registry figures released by property management firm London Central Portfolio have revealed that the average price of a flat in England and Wales has risen above £250,000, taking them into the punitive 3 per cent band of Stamp Duty. Properties bought for a quarter of a million pounds or less pay up to £2,500 in Stamp Duty. But the tax bill rockets above this, to an eye-watering £7,500 on a property bought for £250,001.
The data is based on the Land Registry’s publicly available ‘price paid’ data (which shows an average price of around £239,000 for flats), but reportedly makes adjustments to exclude some transactions. But with both datasets showing average prices around the level at which the punitive rate kicks in, a lot more home buyers will be finding themselves stamped with a much nastier level of duty.
But you can make a difference. Go to StampOutStampDuty.org to automatically send your MP a message about Stamp Duty.
The Sun ran a poll carried out by YouGov last week, revealing the public’s deep dissatisfaction with the way government spends taxpayers’ money and the lavish severance packets of top public sector bureaucrats.
This is a brief summary of the results:
• Asked to think about the most wasteful area or government, the top three choices were welfare at 52 per cent, immigration at 51 per cent and health care services at 30 per cent. The fact that health ranked third on 30 per cent is striking. It shows that despite ring-fencing NHS budgets, the public is fully aware that there is still plenty of fat to trim.
• 83 per cent rated big government projects that did not work or go over-budget as either a very large or a fairly large problem. Given that HS2 is already reported to cost more than £10 billion than first budgeted, this is hardly surprising.
• 81 per cent said that wasteful administration of Whitehall departments was a very large or fairly large problem, with just 1 per cent saying it was not a problem at all.
Efficient government spending
• Asked to think about which party spends tax most effectively, none covered itself in glory: 47 per cent said neither party spends tax money effectively, 3 per cent said they were both equally effective and 13 per cent did not know.
• 79 per cent said that a complex and badly-run tax system was either a very large problem or a fairly large problem. George Osborne’s supposed drive for tax simplification has stalled with the 2013 Finance Bill one of the longest in years. Britain badly needs simplicity and competitiveness – The Single Income Tax would deliver both in spades.
• Recent severance bonanzas in the BBC and NHS have fuelled discontent with excessive payouts.
• Only 2 per cent of those surveyed said there should be no cap at all on severance pay. 16 per cent favoured a twelve month cap, 15 per cent said there should be a three month cap, and 12 per cent said there should be a one month cap and 30 per cent said there should be no severance pay whatsoever.
• 59 per cent thought that “Severance pay for these officials is usually a way of rewarding their failure in the role.”
• Only 13 per cent of respondents said “Severance pay for these officials is usually a fair recognition of the work they have done in the role”
The message is clear – we need simpler taxes and less wasteful spending.
Figures released by The Department for Communities and Local Government last week revealed the huge amount councils are raking in from parking. They are set make £635 million in 2013-14, up from £601m last year. Parking is an increasingly becoming a nice little earner for councils.
The RAC Foundation found that Westminster City Council made the largest amount from parking with £41.6 million in 2011-12. Kensington and Chelsea made £28.1 million in the same period and Camden followed closely with a £25 million. Whilst the biggest receipts are for London councils, Brighton and Hove made £14.4 million – more than many London Boroughs and twice as much as Manchester. Even when the money councils spent to the infrastructure is taken into account, English councils still made £412 million for 2011-12.
These figures come less than a fortnight after a landmark ruling against Barnet council mean councils all over the country can no longer use income from parking to pay for anything other than road works and similar road transport costs.
Some councils don’t seem bothered by the fact that many high street retailers are already struggling with crippling, ever-increasing business rates in difficult economic times.
It’s clear that some local authorities see hard-pressed motorists as little more than cash cows to be milked at every opportunity. Motorists in Britain already pay the highest fuel taxes of any country in the EU28 and are hit with punitively high rates of road tax. The Treasury took a combined £32.5 billion in road and fuel tax in 2012-13, but only £7.1 billion was spent on roads.
Thankfully, TPA campaigners in Colchester, Essex, managed to shoot down plans to install parking meters on a busy high street.
Local Government Secretary Eric Pickles said yesterday that “£635 million municipal profit shows why we need to review and rein in unfair town hall parking rules.” He also reminded councils that “The law is clear that parking is not a tax or cash cow for town hall officers.”
Despite this, transport minister Norman Baker said earlier this month that he was considering increasing the cap on parking fines.
When a government minister admits that parking charges are so sky-high that huge penalties for illegal parking are no longer a deterrent, you know there is something wrong. The sooner local authorities rein in these colossal parking profits, the sooner they can claim to be back on the side of local people and businesses.
Government officials would like us to believe that its Energy Company Obligation (ECO) programme, despite costing £1.3 billion, will have “no impact on consumer bills.” But when a major player in the industry warns against the risk they pose to energy bills, the Government’s blue-sky thinking starts to fall apart.
Keith Anderson, the boss of ScottishPower, spoke out today against the Government’s predictions of how much instigating the ECO programme would cost. The programme covers a raft of measures supposed to help reduce our energy bills, ranging from the instillation of solid wall and cavity wall instillations to full loft insulation and the glazing of windows. Whilst Mr Anderson has said that ScottishPower broadly agreed with “energy costs remaining stable and flat over the next period of time” he warned that there was “increased cost pressures coming through.” Consumers want stable and flat prices, but the Government’s own ECO programme is putting this at risk.
With the scheme expected to end up costing far more than the Government’s initial estimates, Mr Anderson said: “We are seeing a big increase in our costs associated with the new ECO scheme. What we are seeing coming through is, this is in line with what we predicted – not what the government predicted.”
All of the investments in energy saving measures have to paid for, meaning energy companies need to make higher profits. Inevitably, the consumer picks up the cost of this in higher bills. The added cost of the ECO programme does not take into account many of the Government’s other environmental schemes, such as the carbon tax and subsidies for expensive energy sources like wind turbines.
According to energy regulator Ofgem, environmental charges and VAT already make up 11% of to a typical family gas bill and 16% of a typical electricity bill. The average family therefore pays nearly £200 a year in energy taxes. The increased bills that the ECO programme will create mean that the Government is adding yet more to the burden on families struggling with their bills. Help us stop them by writing to your MP at EnergySwindle.org