What do we do about the Council Tax in West
Devon?
Nicholas Waterhouse
Probably everyone understands the system of Council
Finance and Local Taxation, but just in case we’ll start with a summary of the
barest facts. The system changed a bit in 2003, but the result is very much the
same!
Who’s getting the money?
The Council Tax you pay is collected by West Devon
Borough Council, but you might be surprised how little of it sticks to their
fingers!
They collect not only on behalf of themselves, but of
Devon County and of the Police, and of your Parish Council as well. Since West
Devon will be keeping just £137.69 of the Tax for a Band D property this year
you can see who is getting the money. Indeed the County increase this
year is within pennies of the total amount of West Devon’s tax.
What Councils spend:
Council spending is divided into two kinds:
- Services the law says they have to supply (emptying
bins, running elections)
- Services they are allowed to supply but don’t have
to (swimming pools, ready made business premises to tempt new employers).
The Government says how much it believes a Council
should spend on statutory services, and adds a (niggardly) amount for
discretionary services.
Generally speaking Governments are run by people from
the cities who have no idea what it costs to empty a bin in Drewsteignton or the
Bere Peninsula. The whole system was invented by Mrs Thatcher, who wasn’t keen
on discretionary anything for Councils. Hence virtually all Councils have had to
spend more than the Government gives them, or assume that their residents don’t
want jobs or swimming. Often even that choice is not a real one, as they find
that a previous Council in easier times has built a swimming pool or an
industrial estate, - and they are stuck with it anyway!
What Councils get:
Council income is of three kinds:
- Money from central Government paid out of taxes of
one kind (general taxation) or another (a share of Business rates).
- Income from activities for which they are allowed to
charge, such as licensing taxis and village halls. The biggest sources of
income are usually car park charges and charges for accessing the record of
problems with land such as mortgages, planning blight, mineshafts, (sorry
Horrabridge) and, more recently, warnings not to grow cabbages because they
will be full of arsenic.
- Third and last, Council Tax.
The Government having fixed the money it dishes out in
relation to its assessment, of Council needs, the rest, after allowing for other
income, has to be raised in Council Tax.
The result of this system in practice is that every
extra £ a Council spends comes 100% from Council Tax unless it is something
that can be charged for. The Government has fixed its contribution, and only
charges and/or Council tax can go up to meet extra spending.
So what does it matter if the Council Tax goes up?
Liberal Democrats believe in things which should
result in Council Tax going up:
- They believe in good public services, and in quality
of life provision in sport and the arts.
- They believe that a higher proportion of local
expenditure should be raised locally, so that local government can be more
independent of Government.
So if there is something we think our Council Tax
Payers would like why shouldn’t they have it?
The problems of Council tax
Council tax was invented by Mrs Thatcher, and is best
described as “Son of Poll Tax”. Only the huge unpopularity of Poll Tax would
have allowed a tax like Council Tax to creep in.
Council Tax is “regressive”, meaning that it isn’t
properly related to ability to pay, and generally the less you can afford it the
bigger the burden it becomes. Only the very poorest escape it, and you can own a
house worth a million and pay only three times what is paid by someone in a one
bedroom flat. It is based on property values and not income. It is therefore a
serious burden on people who are not quite poor enough to qualify for means
tested benefits; it is part of the “Poverty Trap”.
The long-term Lib Dem solutions
The big idea is local income tax. Most Lib Dems agree
that income tax is the fairest form of taxation (though privately some of us
believe VAT is running neck and neck with it!). Certainly if accountants hadn’t
been invented Income Tax would be the tax which most accurately took money from
people in proportion to their ability to pay. The problem is that Local Income
Tax seems unlikely to arrive in the next decade or so, and meanwhile Councillors
have to balance the budget this and every year until it does.
So there is the dilemma. If a Lib Dem Councillor
wants to improve quality of life, promote economic prosperity, pursue the green
agenda, foster the arts, and generally do what comes naturally to them to want
to do, said Councillor must reckon on generating steep increases in Council Tax,
which will fall disproportionately on the poorer members of the community.
The problem is one for the political parties in power
to solve; they are not likely to give us a Local Income Tax, because they
represent powerful interest groups who will oppose a transfer of resources from
the rich to the poor. But in the meantime Liberal Democrats campaign in
Central Government for a fairer Council Tax. This means more Council Tax “bands”;
at present the owner of a house worth more than £1mn pays just three times the
Council Tax that is paid by the occupiers of a run-down cottage. (And the owner
of a second £1mn home will pay only one and a half times!).
Meanwhile on the Council...
In four of the last five years* the Liberal Democrat
Councillors in West Devon have supported a rise in Council Tax no greater than
the rise in inflation. The Conservatives and their “Independent” allies,
have chosen to support the Officers’ call for steeper increases.
* In the fifth year the Liberal Democrats
accepted a higher increase because the extra money paid for a better service for
the Council Tax Payer in the vital area of recycling.
Got an opinion? E-mail the or use our email form and
let us know!
|
