Our political editor, WALTER CRONXITE, on the new ‘independence’ that Croydon’s leaders has been given to add £100 to Council Tax bills next year
Tony Newman, the leader of Croydon Council, and his deputy, Alison Butler, were out with other members of their council clique at Ronnie Scott’s jazz club in Soho last night, getting in the swing of things for their Christmas break.
However good the acts might have been, the £53,000 per year council leader must have had a thought or two about the problems which he and his fracturing and fractious administration will face in the New Year.
Because that now includes the real possibility of presenting the people of Croydon with a 6 per cent increase in their Council Tax, just a month before they go to the polls in the local elections on May 3.
Ofsted, Westfield, Fairfield Halls, the borough’s primary schools, Brick by Brick… Croydon’s Labour leader has got plenty on his plate before those Town Hall elections, but the not-entirely-unexpected local government finance settlement announced by Tory minister Sajid Javid this week has put Newman in a deep Council Tax hole.
Having forced austerity on the nation since 2010 through a vice-like grip on local authority spending by restricting the amounts that councils, like Croydon, can raise through their civic taxation, the Conservative Government’s response to its own annus horribilis of 2017 has been to loosen those restrictions, slightly.
The funding black hole which faces local councils in England – created by the Tory Government – is estimated to be nearly £6billion over the next two years. Nothing Javid said on Monday will make much of a dent into that.
A bit of extra freedom to increase Council Tax, and the adult social care precept, won’t go very far towards resolving the long-term damage caused by funding cuts. The promise of a reduction in the amount of local business rates which the government keeps sometime in the future won’t do much to stave off the latest round of spending cuts councils are forced to contemplate.
The Tories at Westminster know what they are doing. They’ve been following this line since 2010 – passing the buck for cuts in services to local councils, while handing out tax cuts to the better off. But now, faced by the wave of Corbynmania which wiped out Theresa May’s parliamentary majority, Javid has thrown Labour council leaders a steaming turd of a finance package, for them to handle just before they face local elections.
Javid said the threshold for triggering an automatic local referendum is being increased from 2 per cent to 3 per cent of core Council Tax. Coupled with the 3 per cent additional “precept” permitted to authorities with social care responsibilities, this gives councils freedom to hike bills by up to 5.99 per cent in April.
Javid portrayed this as giving local authorities “the independence they need to help relieve pressure on local services”. More like the independence to walk straight into his political trap.
For all the pretence, Council Tax is clearly a nationally set tax. Central Government just doesn’t trust the burghers of our Town Halls to manage their finances responsibly.
Local authorities such as Croydon, which has just lumped an extra £2million into its children’s services department after the damning Ofsted report earlier this year, may feel that they have to go to the max of what they can raise.
For an average, Band D household, this could see their Council Tax increased by £100 in 2018 – an increase far out-stripping inflation, something Newman had promised never to do when he took control of the Town Hall in 2014.
Even if Newman does look to increase Council Tax by the maximum amount, the chances are that it won’t be enough.
“Allowing councils to increase council tax by 1 per cent next year is woefully inadequate to address the funding gap facing adult social care, raises least funding in the areas of greatest need and is not the best solution to address the impending crisis facing the sector,” warned Margaret Willcox, the president of the Association of Directors of Adult Social Services.
“With no fresh funding injection, an increasing number of older and disabled people will not get the care and support they desperately need. By the end of this financial year, £6 billion will have been cut from councils’ adult social care budgets since 2010 – with need for our services growing all that time.”
Even Conservatives working in local government found Javid’s announcement unsatisfactory. Councils are approaching “a financial breaking point which will threaten the existence of some local services”, said Tory peer Lord Porter, the chair of the Local Government Association.
For Porter, the Government needs to stump up more cash to support local authorities, not less. “Years of unprecedented central Government funding cuts have left many councils beyond the point where Council Tax income can be expected to plug the growing funding gaps they face.”
In Croydon, a failing children’s services department is an example of what happens after year-upon-year of cuts, applied under Conservative and Labour administrations at the Town Hall. It took an Ofsted report which found vulnerable children and families were left at risk of “significant harm” because of “widespread and serious failures” before the council reversed its redundancies and found extra cash to pay for more staff.
The time is long overdue when the public needs to choose between tax cuts for bankers, or the provision of decent local services.
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