Council Tax to increase by 5% just weeks before local elections

WALTER CRONXITE reports on the inevitable consequence of Tory government cuts to Croydon Council

Tony Newman: has the backing of the Labour group for Council Tax increase

With the local elections just weeks away, Croydon’s council leader says that he has decided to be honest.

“We are being honest with residents about Council Tax,” Tony Newman said in announcing that Croydon residents will face a local taxation hike of £1.50 per week from April.

In reality, Council Tax is set by the Government, which decides on the (rapidly diminishing) level of grant that goes to local authorities, and then sets a limit on the rate of increase councils like Croydon can apply to civic tax-raising in order to cover the difference and still pay for a range of local services. Newman’s Labour council has opted to increase Council Tax by the maximum allowed.

While Croydon’s Tories went into the last local elections in 2014 offering a cheap money-off stunt, trying to bribe the electorate with their own cash, Newman has bowed to the inevitable after eight years of austerity cuts forced on the council’s budget by Conservative-led central government.

Cumulatively, Croydon Council Tax has risen by a little more than 13 per cent in the four years under Labour control.

Council Tax is now determined in three areas: the local council element, an amount set by the Mayor of London, and an adult social care precept. The latter has already been set at 2 per cent by Westminster, while Sadiq Khan has set the City Hall element at 5.07 per cent, almost all to pay to protect Metropolitan Police numbers. Croydon’s local element of Council Tax, Newman’s Labour group has decided, will rise by 2.99 per cent.

This will now go forward to cabinet and a full council meeting for ratification.

Simon Hall: ‘huge challenges’

“The council faces huge challenges, with our government funding having been cut by nearly three-quarters since 2010, at the same time as we have a growing population and increasing need for our services,” Simon Hall, Labour’s finance chief, said.

“This Labour council has been focused on providing value for money, protecting frontline services and investing in our future. This year, the Council Tax bill will rise by £1.50 per week.  Of this, 27p will be for our police, 49p will be for the old and vulnerable and 74p to protect services and invest.”

Newman said: “This administration is about delivering. Delivering valued frontline services. Delivering growth and investment. Delivering affordable Council Tax.

“When we were elected, we promised below-inflation increases in Council Tax and the local element of Council Tax has risen less than inflation. Across the board, we are delivering and, by contrast with the last Tory council who tried a gimmick on Council Tax four years ago, we are being honest with residents about council tax.”

However you try to dress it up, the decision, just before an election, is going to cost the people of Croydon more money.

Inflation, using the Consumer Price Inflation – CPI – accepted measure is at 3 per cent. People’s wages are going up by 2.5 per cent.

Croydon residents will likely be uninterested in how the different components of the Council Tax have been played about with by politicians to disguise increased tax. The bottom line is that what the Croydon Council Tax-payer will pay is going up 5 per cent.

A Band D household in Croydon is paying 13.25 per cent more than in 2014, if they were eligible for the £25 Tory cashback offer/ineffective bribe [delete to distaste] that year. CPI over the same period has risen 5.4 per cent so the Band D Council Tax is up in real terms 7.85 per cent.

The final figures might be tweaked come the council’s Budget meeting, with unexpected extra receipts sometimes allowing a slight late reduction in the increase but overall Council Tax bill for a Band D property, whose 2017-2018 bill of £1,558.93, will go up to £1,636.93 for 2018-2019

Envelopes from the council containing these glad tidings are expected to drop through households’ letter boxes in March. The local elections are on May 3.

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6 Responses to Council Tax to increase by 5% just weeks before local elections

  1. Nick Mattey says:

    The timing for this increase announcement is not ideal as the local election is on May 3.

    Newman has probably gambled on the fact that short of the Labour candidates being involved in a plot to set light to Battersea dogs’ home, he will retain control of the council.

    This maximum 5% increase could have been less with more prudent control over spending.

    The council needs to get a grip on pay for the council’s senior managers and the friends of senior managers, like the one who was being paid £787 per day by his mate.

  2. One can’t blame Tony Soprano at all for the rise in Council Tax. As you point out, its entirely the fault of central government.

    The Council could, though, economise considerably without in any way diminishing the range of services it offers. For one thing, as Nick Mattey says, it could look a the pay and number of senior managers and, for another, put an end to vanity projects such as the murder of Surrey Street, the pointless strangulation of the High Street and the desecration of buildings by valueless, pretty well invisible and totally useless bits of low quality art.

    Perhaps the new council, hopefully Labour and sans Mark Watson, will be able to achieve this. If it does, it may be the dawn of a new day… hope springs eternal.

  3. I am extremely pleased that the council tax has not been increased by 27%. With this 5% increase all our councillors who work so hard (Though some complain that there is not enough work and the number of councillors should be reduced) should get an increase of 5%.

  4. This current and the previous coalition government is pursuing a policy of making local government more responsible for its own local spending, that means phasing out central grants and instead becoming reliant on locally based funding e.g. council tax, charges for non-statutory services, the new homes bonus, community infrastructure levy, S106 and others.

    Whilst there are a few problem areas like social care which is too closely intertwined with centrally funded healthcare, it’s not necessarily a bad thing that local people pay for local services that are delivered via their local authorities, who are accountable to local councilors elected by local residents. Of course we’d all like other people to pay for our local services, but then it’s always easier to spend other people’s money.

    • That proposition of local taxation paying for local services might have more credibility if central government didn’t continue to get its grasping hands on so much of the business rates which local authorities collect.

    • Nick Davies says:

      Another issue with local taxation is that not all areas are equal. Councils with many deprived households and a low tax base tend to have a greater call on their resources than wealthy areas full of expensive properties and a commensurate tax yield. One purpose of central funding is, at least in principal if not in practice, to even things up.

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