How high could Council Tax go?
Discussion
We've had a few threads which petered out, around ways to pay for the Coronacrisis. Assuming the debt is ever paid off of course.
Council Tax doesn't seem to be mentioned much but seems an ideal revenue raising avenue, as it is arm's length from the Government who can blame local councils.
Around here, Council tax for an average family home is just under £150 a month. So for most people it probably comes third or fourth as the biggest expenditure after mortgage, cars and groceries. Although I can see that for people who don't have cars on finance and are towards the end of their mortgage, Council Tax could easily be up near the top of their biggest monthly outgoing.
That said, there is plenty of headroom between Council Tax (£150) and the average lease car deal (~£400) or mortgage (~£700). So could we see Council Tax potentially being doubled if politicians calculate that they could get away with it? Maybe via a "local Coronavirus hotspot levy".
Or is it not worth it, since it would "only" bring in another £40bn or so?
Council Tax doesn't seem to be mentioned much but seems an ideal revenue raising avenue, as it is arm's length from the Government who can blame local councils.
Around here, Council tax for an average family home is just under £150 a month. So for most people it probably comes third or fourth as the biggest expenditure after mortgage, cars and groceries. Although I can see that for people who don't have cars on finance and are towards the end of their mortgage, Council Tax could easily be up near the top of their biggest monthly outgoing.
That said, there is plenty of headroom between Council Tax (£150) and the average lease car deal (~£400) or mortgage (~£700). So could we see Council Tax potentially being doubled if politicians calculate that they could get away with it? Maybe via a "local Coronavirus hotspot levy".
Or is it not worth it, since it would "only" bring in another £40bn or so?
I'm no expert but ours is £245 a month so already quite high. It's gone up above inflation over last year's too. We're seeing a lot of job losses and businesses closing right now so a lot of people simply couldn't afford to pay more and if they had to, they might not be spending as much on non essential things that keep local businesses going like pubs, takeaways, etc. The damage to the economy could be worse than anything they can raise by bumping up the tax.
Anyway, that's all based on armchair thinking and not with any real economics knowledge. Maybe someone more qualified could bring their thoughts.
Anyway, that's all based on armchair thinking and not with any real economics knowledge. Maybe someone more qualified could bring their thoughts.
vikingaero said:
Don't Da Gubbermint cap most Council Tax rises to a couple of percent max?
5% IIRC, any higher proposed increase and the local Council have to justify the excess increase to central Government. Still 5% is double the average annual increase in wages, if your lucky enough to enjoy an increase at all or indeed have a job later this year.At some point, and imo it extremely close, local Government will have to wake up and realise that the local populations are pips squeaking.
Much more needs to be done in terms of efficiency in local Government, CEO earning more than the PM seems very strange and out of kilter. Not that cutting that would make any difference in financial terms but would send a more
appetising message to Council tax payers perhaps.
Morning,
I am not unfamiliar with local government finance, and happy to use my lunch break to share some thoughts.
The problem with these sort of threads on ph, is that virtually everyone comes into them with deeply entrenched views, and after a bit of sniping, name calling and quoting, everyone goes their separate way because the real problems are fundamentally beyond them to solve.
So, here goes
The public sector chose along time ago to reward staff across their whole life, rather than head down the short term reward basis now favoured in the private sector.
I can see how that is annoying for people who didn't consider full life remuneration when choosing a sector to work in, but ultimately everyone's remuneration is paid by someone in the economy, and some employers pay more in the short term and less in the long.
Personally I think a race to the bottom in terms of pensions is not in anyone's interest, but for the short if not medium term, pension terms and conditions are not relevant for this discussion.
But in terms of cuts, Local government cut spending way more than most public sector areas, though unfortunately inbuilt demographics and law changes (some might call it social progress) continue to drive cost into the system way above inflation.
Plus every time a council tries to close a library say, veritable bus loads of pensioners will chain themselves to railings etc, yet the real people in need / vulnerable etc. who can't represent themselves face cuts. It's no way to run a business.
What fails to happen *every single time* is any meaningful conversation about the reality of funding and expectations. No one wants to talk about it funnily enough...
So in terms of council tax levels:
- council tax is capped currently at 2%
- it could be changed...might need primary legislation though..there's quicker things to do
- council tax has problems with equality around the country...some councils get a lot more % cash compared to %increase
- in the short term council tax support requests will decimate income if the end of furlough sees huge unemployment
-Those schemes take at least a year to change, and any significant cuts would be deeply, deeply unpopular at a local political level, to the point I don't think any party council would approve
- the government is letting councils defer losses in council tax over 3 years (carrying a deficit if you will) , but shortfall in income will need to be made up
Should ctax go up?
- it's certainly an avenue to consider. Uk property taxes are lowe than other countries, though that's small comfort to mr and mrs jones who have already budgeted their spending based on current levels
- the poorest are already exempt, but it's not a very progressive tax...ctax band is a poor indicator for wealth, yet alone income
- Westminster council did vote for a voluntary supplement the rich would pay to feel less guilty about being filthy rich. I can't see it getting *that* much traction on here, but it does highlight how the wealth proxy element is truely broken.
- note: nndr is more broken, but that can wait.for it's own thread
Who is going to pay for corona-crisis (like that phrase btw...going to steal it )
- frankly, it will be our kids and grandkids. The Tories have already said they're not going back to austerity, so I predict a general watering down of fiscal rules to allow the debt to be carried forward to future generations.
We're already seeing this in Local government, which has a statutory bar on using debt to finance day to day activity. However, all the government need to do is amend guidance and it opens the door to letting costs be rolled up as debt.
I'm not opining on whether it's right that these costs are being incurred, as people's opinion on that is already covered in huge detail in other cv19 threads.
Hope this helps,
Ian
I am not unfamiliar with local government finance, and happy to use my lunch break to share some thoughts.
The problem with these sort of threads on ph, is that virtually everyone comes into them with deeply entrenched views, and after a bit of sniping, name calling and quoting, everyone goes their separate way because the real problems are fundamentally beyond them to solve.
So, here goes
coanda said:
I'd like to see more of my current council tax gone on services rather than pensions.
Pensions within the first 3 replies! Good stuff, I was worried standards were slipping The public sector chose along time ago to reward staff across their whole life, rather than head down the short term reward basis now favoured in the private sector.
I can see how that is annoying for people who didn't consider full life remuneration when choosing a sector to work in, but ultimately everyone's remuneration is paid by someone in the economy, and some employers pay more in the short term and less in the long.
Personally I think a race to the bottom in terms of pensions is not in anyone's interest, but for the short if not medium term, pension terms and conditions are not relevant for this discussion.
Sophisticated Sarah said:
It shouldn’t go any higher. Government and local councils should make cuts and efficiency savings instead.
Local govt has been making efficiency savings throughout my 20 year career...it was gershon under new Labour, but following so called austerity funding reductions were massive. Vast swathes of elderly don't now get care funding. You want more to lose it? Huge numbers of youth education and training programmes ceased. You're happy with economically inactive young adults staying that way in your area? Proactive programmes to tackle family cohesion, social isolation in the elderly, joining up of nhs and social care work, you're happy for all of that to stop? It saves money in the long term, but short term savings are what is asked for, so short term savings is what you get. Perhaps save "back office" costs by procuring from the amazing private sector? We had to take their low ball to stay legal because the market so chaotic, but surprise surprise they asset strip and rake in consultancy for things council staff would have just done. But in terms of cuts, Local government cut spending way more than most public sector areas, though unfortunately inbuilt demographics and law changes (some might call it social progress) continue to drive cost into the system way above inflation.
Plus every time a council tries to close a library say, veritable bus loads of pensioners will chain themselves to railings etc, yet the real people in need / vulnerable etc. who can't represent themselves face cuts. It's no way to run a business.
What fails to happen *every single time* is any meaningful conversation about the reality of funding and expectations. No one wants to talk about it funnily enough...
So in terms of council tax levels:
- council tax is capped currently at 2%
- it could be changed...might need primary legislation though..there's quicker things to do
- council tax has problems with equality around the country...some councils get a lot more % cash compared to %increase
- in the short term council tax support requests will decimate income if the end of furlough sees huge unemployment
-Those schemes take at least a year to change, and any significant cuts would be deeply, deeply unpopular at a local political level, to the point I don't think any party council would approve
- the government is letting councils defer losses in council tax over 3 years (carrying a deficit if you will) , but shortfall in income will need to be made up
Should ctax go up?
- it's certainly an avenue to consider. Uk property taxes are lowe than other countries, though that's small comfort to mr and mrs jones who have already budgeted their spending based on current levels
- the poorest are already exempt, but it's not a very progressive tax...ctax band is a poor indicator for wealth, yet alone income
- Westminster council did vote for a voluntary supplement the rich would pay to feel less guilty about being filthy rich. I can't see it getting *that* much traction on here, but it does highlight how the wealth proxy element is truely broken.
- note: nndr is more broken, but that can wait.for it's own thread
Who is going to pay for corona-crisis (like that phrase btw...going to steal it
)- frankly, it will be our kids and grandkids. The Tories have already said they're not going back to austerity, so I predict a general watering down of fiscal rules to allow the debt to be carried forward to future generations.
We're already seeing this in Local government, which has a statutory bar on using debt to finance day to day activity. However, all the government need to do is amend guidance and it opens the door to letting costs be rolled up as debt.
I'm not opining on whether it's right that these costs are being incurred, as people's opinion on that is already covered in huge detail in other cv19 threads.
Hope this helps,
Ian
Personally I am against the continued central Government insistence regarding devolution. In view of the current situation of local Government unable to provide services thanks in main to central Governments continually cutting the financial aid packages (grant aid?) Pressuring LG to increase
local tax to the hilt in order to stand still at best, but usually cut services.
I note your post indicating that LG are limited to a 2% max tax increase, but LG are getting around this by using ‘special circumstances’ and asking (sometimes) local tax payers if they will stomach extra tax rises for example Police, Social needs, Parish Council ask for way over 2% most years,
other examples could be found I’m sure. Meanwhile our local recycle centre has been replaced by a new centre with all the modern tech’ and staff one could imagine required for the public to be able to dump their rubbish, cost millions of pounds. Small beer but when we have craters in what pass for public roads it is very galling.
Privatisation of services, much has moved into the private sector over the past twenty years or so, parks, dustbin collection, recycle, leisure services. And yet we see these services being cut as, I presume, Councils struggle to fund the bids placed by the private sector when contracts are put out to tender, or / and the services are reduced within contract renewals.
We all continue to pay more and receive less in return, not a happy place and I would suggest unsustainable. What is the answer, I wish I knew.
local tax to the hilt in order to stand still at best, but usually cut services.
I note your post indicating that LG are limited to a 2% max tax increase, but LG are getting around this by using ‘special circumstances’ and asking (sometimes) local tax payers if they will stomach extra tax rises for example Police, Social needs, Parish Council ask for way over 2% most years,
other examples could be found I’m sure. Meanwhile our local recycle centre has been replaced by a new centre with all the modern tech’ and staff one could imagine required for the public to be able to dump their rubbish, cost millions of pounds. Small beer but when we have craters in what pass for public roads it is very galling.
Privatisation of services, much has moved into the private sector over the past twenty years or so, parks, dustbin collection, recycle, leisure services. And yet we see these services being cut as, I presume, Councils struggle to fund the bids placed by the private sector when contracts are put out to tender, or / and the services are reduced within contract renewals.
We all continue to pay more and receive less in return, not a happy place and I would suggest unsustainable. What is the answer, I wish I knew.
Our council has got round the 2%cap by introducing a new fund within the council tax for social care. This is now 10% the cost of council tax so effectively a 10% increase.
The bill is kindly itemised out showing the capped inflation at 2%.
They even itemised out the social care portion as 2% inflation, but when you look at your last year bill, you can calculate that it is actually more than 10% increase for that portion.
So there are ways around the cap.
The bill is kindly itemised out showing the capped inflation at 2%.
They even itemised out the social care portion as 2% inflation, but when you look at your last year bill, you can calculate that it is actually more than 10% increase for that portion.
So there are ways around the cap.
Sophisticated Sarah said:
It shouldn’t go any higher. Government and local councils should make cuts and efficiency savings instead.
Exactly, don't get me started on raising council tax, they should try cutting out all the paper pushing, endless bureaucracy and start getting value for money instead of taking more money from us.Although it is not nice to talk about pensions, this is a real issue. Successive governments have raided pensions in one way or another e.g. dividend tax credits, QE dilutes the market etc.
All these put added burden on maintaining these pension schemes. The cost of the pension has become like the interest payments on the Channel Tunnel i.e. eventually unsustainable. By diluting the investments which make up the pension schemes and taxing the public more to pay for it then printing more money to compensate, we are leading ourselves into a Ponzi scheme like seen in Lebanon.
I think it should last a few more decades so it will be a problem for the next generation.
All these put added burden on maintaining these pension schemes. The cost of the pension has become like the interest payments on the Channel Tunnel i.e. eventually unsustainable. By diluting the investments which make up the pension schemes and taxing the public more to pay for it then printing more money to compensate, we are leading ourselves into a Ponzi scheme like seen in Lebanon.
I think it should last a few more decades so it will be a problem for the next generation.
leef44 said:
Although it is not nice to talk about pensions, this is a real issue. Successive governments have raided pensions in one way or another e.g. dividend tax credits, QE dilutes the market etc.
All these put added burden on maintaining these pension schemes. The cost of the pension has become like the interest payments on the Channel Tunnel i.e. eventually unsustainable. By diluting the investments which make up the pension schemes and taxing the public more to pay for it then printing more money to compensate, we are leading ourselves into a Ponzi scheme like seen in Lebanon.
I think it should last a few more decades so it will be a problem for the next generation.
Or the concept of a pension will just not exist in the future.All these put added burden on maintaining these pension schemes. The cost of the pension has become like the interest payments on the Channel Tunnel i.e. eventually unsustainable. By diluting the investments which make up the pension schemes and taxing the public more to pay for it then printing more money to compensate, we are leading ourselves into a Ponzi scheme like seen in Lebanon.
I think it should last a few more decades so it will be a problem for the next generation.
Young people won't have the cash to pay into a pension .
The current middle aged people who have pensions , the things the pensions invest in like retail property just won't be making them money anymore so how does the scheme operate in the future ?
Ian Geary said:
The public sector chose along time ago to reward staff across their whole life, rather than head down the short term reward basis now favoured in the private sector.
I can see how that is annoying for people who didn't consider full life remuneration when choosing a sector to work in, but ultimately everyone's remuneration is paid by someone in the economy, and some employers pay more in the short term and less in the long.
That would be all well and good if it was still true. Many years ago public sector workers moaned about how little their pay was compared to the private sector. This was then increased over time so there is little if any difference nowadays, however the pensions are still way in excess of the private sector.I can see how that is annoying for people who didn't consider full life remuneration when choosing a sector to work in, but ultimately everyone's remuneration is paid by someone in the economy, and some employers pay more in the short term and less in the long.
cb31 said:
Ian Geary said:
The public sector chose along time ago to reward staff across their whole life, rather than head down the short term reward basis now favoured in the private sector.
I can see how that is annoying for people who didn't consider full life remuneration when choosing a sector to work in, but ultimately everyone's remuneration is paid by someone in the economy, and some employers pay more in the short term and less in the long.
That would be all well and good if it was still true. Many years ago public sector workers moaned about how little their pay was compared to the private sector. This was then increased over time so there is little if any difference nowadays, however the pensions are still way in excess of the private sector.I can see how that is annoying for people who didn't consider full life remuneration when choosing a sector to work in, but ultimately everyone's remuneration is paid by someone in the economy, and some employers pay more in the short term and less in the long.
Mores stuff like this I imagine
https://www.wrexham.gov.uk/service/what-goes-my-bi...
Why is there a charge for garden waste collections?
Given the current period of austerity and the ongoing financial challenges we are facing as a council, the decision was made to introduce a charge for this service (similar to that already introduced by a number of councils across England and Wales).
By charging for garden waste collections this also follows the Welsh Government’s Blueprint recommendations for waste collections in Wales.
https://www.wrexham.gov.uk/service/what-goes-my-bi...
Why is there a charge for garden waste collections?
Given the current period of austerity and the ongoing financial challenges we are facing as a council, the decision was made to introduce a charge for this service (similar to that already introduced by a number of councils across England and Wales).
By charging for garden waste collections this also follows the Welsh Government’s Blueprint recommendations for waste collections in Wales.
worsy said:
Mores stuff like this I imagine
https://www.wrexham.gov.uk/service/what-goes-my-bi...
Why is there a charge for garden waste collections?
Given the current period of austerity and the ongoing financial challenges we are facing as a council, the decision was made to introduce a charge for this service (similar to that already introduced by a number of councils across England and Wales).
By charging for garden waste collections this also follows the Welsh Government’s Blueprint recommendations for waste collections in Wales.
A near neighbour lights a bonfire each and every week, causes a nuisance to fellow neighbours with the resulting smoke. Thanks to Council introducing charges for garden waste collection.https://www.wrexham.gov.uk/service/what-goes-my-bi...
Why is there a charge for garden waste collections?
Given the current period of austerity and the ongoing financial challenges we are facing as a council, the decision was made to introduce a charge for this service (similar to that already introduced by a number of councils across England and Wales).
By charging for garden waste collections this also follows the Welsh Government’s Blueprint recommendations for waste collections in Wales.
Fly tipping is a National scourge thanks to the Councils introducing charges to more and more recycle items at the tip.
Their answer appears to be increase charges
crankedup said:
worsy said:
Mores stuff like this I imagine
https://www.wrexham.gov.uk/service/what-goes-my-bi...
Why is there a charge for garden waste collections?
Given the current period of austerity and the ongoing financial challenges we are facing as a council, the decision was made to introduce a charge for this service (similar to that already introduced by a number of councils across England and Wales).
By charging for garden waste collections this also follows the Welsh Government’s Blueprint recommendations for waste collections in Wales.
A near neighbour lights a bonfire each and every week, causes a nuisance to fellow neighbours with the resulting smoke. Thanks to Council introducing charges for garden waste collection.https://www.wrexham.gov.uk/service/what-goes-my-bi...
Why is there a charge for garden waste collections?
Given the current period of austerity and the ongoing financial challenges we are facing as a council, the decision was made to introduce a charge for this service (similar to that already introduced by a number of councils across England and Wales).
By charging for garden waste collections this also follows the Welsh Government’s Blueprint recommendations for waste collections in Wales.
Fly tipping is a National scourge thanks to the Councils introducing charges to more and more recycle items at the tip.
Their answer appears to be increase charges
The saving made by reducing landfill tonnage massively out weighs the profit made by charging for the service, but a win win for the Council either way.
Landfill charges introduced by the government have been the source of many waste and recycling policies at a local level for many years now and its not about to change anytime soon.
Unfortunately the savings made by changing recycling rules at recycling centres far out weigh the costs to run a fly tipping department, which just get busier and your area gets messier - but most people are law abiding folk who will not fly tip and will find other ways to dispose or pay for it to be disposed - although it is another reason to p
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