Greenwich Councillors will tonight sign off a council tax rise of 4.99% from April. The rise includes a 2.99% standard increase increase with a 2% social care surcharge on top.
The Greater London Council precept increases 8.93%. Add all together and the increase is 5.93% – almost triple the rate of inflation.
One fundamental reason for these increases is central government policies to cut funding to local authorities and move funding of services from general taxation (corporation tax, VAT, income tax and others) to council tax. This is despite council tax being regarded as a regressive tax – meaning increases disproportionately hit those on lower incomes.
Funding of police is a great example. The Home Office cut funds heavily from 2010 and they provide nearly 80% of police funding. They then announced an increase in 2018 after heavy nationwide pressure yet were not so vocal about how it would be paid for. Much of the burden falls on council taxpayers – and as that goes through the GLA in London it explains the near 9% rise. In Kent it will be a surcharge from the Crime Commissioner, to give another example.
It’s a masterstroke from central government to deflect blame for cuts.
Devolution could help make up the shortfall if it wasn’t so restrictive in the UK compared to all other developed nations – but another policy of central Government and the Treasury is to place very tight limits on how local authorities can raise funds. The UK is far more restrictive on local authorities and Mayors than just about every other developed nation in Europe, North America and Asia.
One great example is a tourist tax for hotel stays. It’s common in every developed nation worldwide – with local cities and towns having flexibility to implement. Some only do on top end hotels, some have a sliding scale, some only after three days etc. In the UK local authorities or Mayors have no power to do this. It’s something that doesn’t harm local residents yet allows cities to capture income. But the Treasury doesn’t even allow modest changes to introduce it. If it was possible would there be a need for that 9% GLA increase? No other country puts local people below visitors like this.
The tax has almost no impact in Rome, Berlin, Barcelona, Amsterdam and many more cities. Are people in a five star going to stop visiting due to paying a few euros extra each night?
But in the UK ever more burden is placed on local council taxpayers – and you’ll see that in your near 6% rise from April.
EDIT: The Conservatives in the borough have released their view of tonight’s proposals:
Greenwich Conservatives’ proposed £1.3million a year programme to reduce Town Hall waste and inefficiency includes:
• Replacing Labour’s controversial Greenwich Info magazine with cheaper and more targeted means of communicating with residents, saving £451,000 a year
• Cutting the cost of local politics with measures which include reversing recent increases to three Labour councillors’ allowances and reducing the size of the Cabinet to match other London boroughs, saving £74,000 a year
• Ending taxpayer subsidies for Trade Union activity, saving £246,000 a year
• Scrapping PR, reputation management and information subscriptions, scrapping spending on professional photography and reducing spending on corporate communications, saving £74,000 a year
• Making savings in the Mayor’s Office including through a more cost effective car lease and reducing catering spend, and securing external sponsorship for some civic and internal events, saving £55,000 a year
• Costed measures to improve the council’s below-average Council Tax Collection Rate to generate a further £400,000 a year which is currently going uncollected
Conservative councillors are proposing to use the £1.3 million a year saved to fund their long-running proposal to improve the Council Tax Support Scheme. Last month Labour Council Leader Danny Thorpe came under fire after being accused of breaking the administration’s promise to introduce up-to-100% support for qualifying working-age recipients. The move will be put to a vote by Conservative councillors for a third time on Wednesday night.
In addition to improving the Council Tax Support Scheme on an ongoing basis, the Conservative proposal uses savings from cutting waste and inefficiency to fund nearly a million pounds of additional one off spending in 2019/20 including:
• Increasing the proposed funding for the council’s Universal Credit Support Team to help more residents who are moving on to Universal Credit, ensuring joined up working with new central government-funded Citizens Advice provision
• Continuing additional funding for the Metropolitan Police for the Domestic Violence Intervention Team, which the Labour Budget would cut entirely, at current levels for 2019/20
• A new £240,000 Parks Investment Fund to address under-investment in parks and green spaces in the borough, with improvements put to a public vote
After the Labour-run Council confirmed it had accepted the need to make back office efficiency savings, amounting to £2.25 million a year, Conservative councillors will not oppose Labour’s proposed 2.99% rise in Council Tax for front-line services, on the basis that back office savings are finally being made.
Conservative councillors are also using the Budget proposal to continue to press the Labour Cabinet to “formally consider” opening negotiations with the Metropolitan Police to reverse the Mayor of London’s decision to close Eltham Police Station. The move would see Greenwich follow the example set by other London boroughs by offering to purchase the police stations being closed in their areas, on the condition they continue to be operated.
Councillor Matt Hartley, Leader of Greenwich Conservatives, said:
“Labour’s budget fails vulnerable residents – and doesn’t do nearly enough to cut wasteful spending that could instead be used to help more people in our borough. I welcome the fact that Labour councillors have belatedly accepted the need to make back office savings, but their plans still include hundreds of thousands of pounds of waste that must be addressed.
“The Council’s Labour leadership talks a good game on supporting the vulnerable, but they are failing to deliver. This will be their third opportunity to vote for our proposal to lift residents who are on the lowest incomes out of Council Tax. I would urge them to vote for it, and to support our proposals for more support for residents moving on to Universal Credit and continue funding for tackling domestic violence in the borough, too.”
“Why is it that it has taken the Opposition Conservative Group to bring forward a more progressive Budget proposal than the Labour Group that runs Greenwich Council? This is a spectacular misjudgement from the new Labour leadership. It’s time they did the right thing and stuck to the promise they made to improve Council Tax Support.”
Councillor Nigel Fletcher, Deputy Leader of Greenwich Conservatives, added:
“We have some fantastic parks and open spaces in our Borough, but in recent years they’ve been a low priority for this Council – as even Labour councillors have admitted. Our plan for a one-off Parks Investment Fund would provide funds for immediate improvements, whilst in the longer term we’re calling for more of the money the council receives from property developers to be invested into ongoing maintenance of these treasured local assets.”