(Local) tax needn’t be (but is) taxing
Like many people up and down the country we received our council tax bill this week. What was strange about it is that it was higher than last year’s bill. This was despite our local council taking their share of Eric Pickles’ council tax freeze grant and thus promising their residents a 0% increase in council tax.
So, what happened to our council tax bill?
Well, the police and fire service happened.
The Conservative Government have promised residents that they will not pay any more council tax and have emotionally blackmailed local authorities to ensure that councils mortgaged their financial future to deliver on this promise. Unfortunately, local tax is so complicated that despite Mr Pickles’ bluster it was going to be very difficult to actually freeze the amount we would all pay. Chief among those challenges was the police precept.
The police precept is a funny thing. The average member of the public would probably feel quite pleased about the cost of it; after all it is a lot smaller than the amount we pay for our local council tax. As with council tax this is all a mirage. The police precept no more pays for the police than the council tax plays for council services.
The precept is funny in many ways. Unlike other taxes it is raised not by councillors or senior politicians but by unelected police boards that supposedly represent the local community but in reality are of marginal importance in local democratic life. The Government do recognise this and the move to elected police commissioners is meant to provide some democratic accountability.
However, I’m not sure if electoral control of the precept is part of the solution rather than part of the problem. The precept will always be of marginal importance to the police budget and yet increases in it, to be material, will always have to make a big dent in people’s council tax bill.
Oh yeah, and if the police precept is not confusing enough many council tax payers will have four or five lines on their council tax bill. Parish councils and Boris, complement the mix of district councils, metropolitan councils, fire brigades and police precepts.
How can we ever expect people to make sense of their local taxation, and the linkage between that taxation and the services it is meant to deliver, when the taxation itself is so complex?
Council tax alone would not pay for council services; much like the precepts would not pay for the services they purport to represent. Equally, council tax has become a totemic issue for political parties on all sides of the spectrum and thus there is little motivation to really address the complex patchwork of taxes and financial transfers that make up local funding.
Meanwhile, as if the local funding situation is not complex enough local businesses are being faced with a 5.6% increase in business rates this year. At a time when the Government is keen to keep taxes low and is willing to go ‘all in’ to ensure that local councils freeze council tax the rise in business rates seems somewhat incongruous.
I don’t know the way out of this but right now local tax is definitely taxing.
Welovelocalgovernment is a blog written by UK local government officers. If you have a piece you’d like to submit or any comments you’d like to make please drop us a line at: firstname.lastname@example.org