Forum Brief: Council tax

The government has unveiled council tax figures for the year - ahead of likely moves to cap the worst offending councils.

 

Party Response: Conservative

 

Caroline Spelman MP, shadow secretary of state for local government, said: "Council tax has gone through the roof under Labour. A typical household now pays almost £500 a year more in tax, an increase of 70 per cent since 1997.

 

"Every year Labour promises a generous funding settlement but every year council tax has risen by an average of three times the rate of inflation.

 

"Council tax bills are now equivalent to almost a hundred pounds a month snatched from people's pay packets and pensions. Council tax has become a stealth tax, engineered by Gordon Brown through fiddled Whitehall funding, but with local councillors taking the blame when council tax bills hit the doorstep."

 

Party Response: Liberal Democrats

 

Edward Davey, Liberal Democrat local government spokesperson, said: "This inflation busting rise reconfirms that the council tax system is unfair and flawed.

 

"Ministers may regard a council tax bill of £1,167 as a success, but hard hit tax payers will strongly disagree.

 

"The only way to stop the massive year on year rises is to scrap this hated tax.

 

"John Prescott’s capping threat to councils, and Gordon Brown’s Budget attempt to buy off pensioners over 70 for one year, cannot disguise that the only way to stop the massive year on year rises is to scrap this hated tax.

 

"We need a fair local tax system based on the ability to pay"

 

Forum Response: Local Government Information Unit

 

Dennis Reed, LGIU chief executive, said: "Capping undermines the concept of local democracy. Although its use may no longer be universal, it is as crude as ever.

 

"By deploying Whitehall's capping powers ministers would be playing politics with peoples' jobs and services to score points at local government's expense. This is despite the recent findings by the Audit Commission that found central government policy to be the chief cause of council tax increases. This was also confirmed by our own research.

 

"If ministers proceed with capping, there would be important questions for the government to answer.

 

"Firstly, will ministers be as forthcoming in the less popular task of telling the councils they are capping exactly what local services they should now slash?

 

"Secondly, where would capping leave the idea of 'active citizenship' if it is ministers rather than local electors who hold councillors to account?

 

"Thirdly, what would all the rhetoric about 'new localism' mean when even local authorities rated highly by Whitehall inspection find that they cannot set their own budget priorities without being overruled from the centre?

 

"The typical council does not increase the council tax for fun. They do it when it is the only way left to protect services. Often, it is to meet Whitehall diktats on spending or new requirements, for example on children's services, that central government has not fully funded.

 

"The LGIU will support local authorities in the campaign against capping. It is important for those who rely on local services, and the principle of local democracy, for ministers to end the blame game and get on with the job of reforming local government finance. This is more important than the sterile party political row over central government grant distribution that we will now see leading up to the local elections.

 

"If the council tax was fairer and councils had a broader and more robust financial base, with most revenue raised locally, ministers would find their dilemmas over capping receding.

 

"Throwing public money at short term fixes like the extra £100 for the over-70s is no substitute for proper reform.

 

"To this end, the LGIU and the Centre for Council Tax Reform are publishing a new report on March 31 showing how the council tax can be reformed with the least amount of upheaval.

 

""This can be downloaded from http://www.lgiu.gov.uk/pdfs/downloads_pdf/LGIUTAX.pdf."

 

Forum Response: Age Concern

 

Gordon Lishman, Age Concern's director general, said: "It is utterly scandalous that the average council tax bill is rising by more than double the increase to the basic state pension. Many pensioners will be dreading their council tax bill dropping through the letter box and the latest £100 payment from the government will not ease the burden for many.

 

"Instead of one-off payments, we need a system of taxation that takes account of people's ability to pay. We also need a weekly basic state pension of at least £105 so that all older people have enough to cover daily living costs.

 

"It is essential that all older people check whether they are claiming all the income benefits they are entitled to. Up to £770 million in council tax benefit for older people is lying unclaimed every year and up to 1.7 million pensioner households are missing out.

 

"By making a claim, the average pensioner would be more than £425 a year better off. Low take-up is particularly acute amongst homeowners, with less than half claiming council tax benefit."

 

Forum Response: Help the Aged

 

Richard Wilson, incomes policy officer for Help the Aged, said: "The government and local councils have clearly started listening to older people on this issue, with increases much down on last year. However, the state pension will rise by just 2.8 per cent next month, considerably lower than the average increase of 5.9 per cent.

 

"This issue will not go away until we have a wider reform of the council tax system that ensures pensioners' bills are related to their ability to pay.  Help the Aged, along with other organisations, has suggested reforms that will make the system fairer.  Now the government needs to implement such changes, or risk undermining the work it has done to support older people and tackle pensioner poverty."