TOMORROW’S Spring Statement from the Chancellor is timed to coincide spookily with the arrival of new council tax bills on our doorsteps.
The contents of that auspicious brown envelope won’t tell you that the austerity measures introduced by Chancellor Philip Hammond’s predecessor, George Osborne, have turned around the public deficit. It’s been cut by three-quarters, apparently.
Surely, a steady flow of funds should be forthcoming from the Government in return for the efforts made by councils to save money by cutting services, closing libraries and ignoring the dangerous potholes which pit our roads.
Austerity is what Liz Truss, Chief Secretary to the Treasury, calls a “balanced approach”. The rest of us, who see bursting schools turning away pupils, who watch powerless as our fields pile up with fly-tipped rubbish and who try to justify why we pay so much for so little, might call it very unfair.
Your council tax bill will reveal more about the perilous balance sheet of your own local authority than anything Philip Hammond says tomorrow. In some areas, a rise of up to five per cent is expected. In Barnsley where I live, it will be 4.5 per cent.
Much of the blame can be put on the rising cost of adult social care; by 2020, one council is apparently expecting all of its budget to be absorbed by the social care needs of just five per cent of the local population. And although the spiralling costs of looking after the growing numbers of elderly people dominate this spend, the number of children being looked after by local councils has also grown by 10.9 per cent over the six years according to the National Audit Office. This is yet another source of pressure on council budgets.
Remember this next time you complain that your bins are only being collected once a month. And, at the same time, don’t forget the fact that central government funding for local councils has eroded since Mr Osborne told us all to tighten our belts.
It’s all a lesson in political hypocrisy. Whilst Ministers preach to us to about finding ways to make ends meet, they preside over a system of public services which barely exists hand-to-mouth.
The National Audit Office says grants from central government to councils have been reduced by 49.1 per cent in real terms over the period 2010-11 to 2017-18, making local authorities the most squeezed of all areas of state activity under the austerity programme.
Increases in council tax and other forms of revenue have contributed to the spending power of councils. However, even this has fallen by a daunting 28.6 per cent over the past seven years.
No wonder council leaders and chief executives despair. In February, Northamptonshire County Council effectively declared itself bankrupt after admitting that it simply did not have the reserves to carry on delivering its remit.
And, in Doncaster, its council chief executive Jo Miller warns that many town hall leaders are “running out of options” because their towns and cities do not generate enough in taxes – including council tax – to cover what they need to spend. Research shows that councils in the poorest areas of the UK have actually borne the largest proportional cuts since 2010, as they were more reliant on central government grants. This is not good for our region.
If only Philip Hammond was not quite so reticent. A brave – and possibly self-sacrificing – Chancellor would use the Spring Statement to announce a reform of council tax. It is clear to everyone that the current system is no longer fit for purpose. If the Government won’t budge on central funding, it is immoral to keep asking councils to keep asking us to hand over more money.
And when this money is disappearing into a bottomless black hole, no responsible administration should allow this untenable situation to continue.
Why should we be running a 21st century state on a system based on the value of every residential property in England and Wales in 1992? Would you base your household spending on what you earned more than a quarter of a century ago?
That’s why the time for a reassessment is well overdue. Of course I don’t have the ultimate answer, but there are plenty of ideas floating around such as increasing National Insurance payments for the over-40s to cover future care needs. Look at benefits such as free travel and winter fuel payments, not necessarily a matter of life or death for retirees lucky enough to draw decent private pensions. Reassess the historic division between income tax and property tax. Pull together both business and residential rates under one umbrella. Tax land ownership instead of property value.
No senior Minister has been brave enough to seize the mettle since the imposition of the poll tax caused irreparable damage to Prime Minister Margaret Thatcher.
Today’s Conservatives should at least show us that they are capable of pulling together some solutions. What better way to steal a march on Jeremy “tax the rich” Corbyn? And what better way to prove once and for all that they have the country’s interests at heart, not their own?