Council tax freeze - cost?

[0a]

Council tax will be frozen for another year in England. Reading the article below, it states "the freeze in 2013 will cost £800m".

How can not taxing EXTRA be a cost? Why do public sector types assume the baseline is a substantial increase? Or am I missing something?

Aside from this, I support freezing council tax, but I fail to understand why the default is that it goes up each year. In the jobs I've worked in the assumption is that costs are reduced year to year and perfomancd increased not the opposite.

http://www.guardian.co.uk/politics/2011/oct/03/geo...
http://www.bbc.co.uk/news/uk-politics-15145083

[crankedup]

Inflation isn't helping very much although I would have thought that the freeze on wages in the public sector + reduction in staff numbers and reduced services delivered would support the case for a reduction in Community charges?

[0a]

No business I've been in has a broad assumption of inflation year to year as a default excuse for budget increases and as you say there should be downwards pressure on local government wages given we're supposed to be getting rid of employees.

My issue above is with a non-increase being portrayed as a cost.

[ninja-lewis]

Read the BBC article again. Central Government has no powers to force Local Government to freeze Council Tax - after all it is supposed to be a local tax.

What they can do, however, is offer an incentive to councils who can limit the increase to 2.5% - the Treasury will fund that 2.5% increase for them so they won't have to increase Council Tax. That's why it will cost the Treasury £800 miliion (or rather that's probably an estimate of the cost if all councils asked for a 2.5% increase).

Some councils won't need an increase as big as 2.5% so the Treasury won't have to pay out as much as expected. Others will need an increase greater than 2.5% in which case they will have to raise Council Tax and therefore eceive nothing from the Treasury (also at no cost to the Treasury but at a cost to council taxpayer).

[0a]

You're correct I stuck that link in at the last moment, makes sense

[crankedup]

Any Council attempt to raise their Community charges can wave goodbye to any re-election ?

[sussexjob]

Last year they just put up Business rates up 8%

[Chrisgr31]

sussexjob said:

Last year they just put up Business rates up 8%

Business rates are related to inflation and can only increase by a formula set in law. Not sure what the actual increase was but didnt think it was as much as 8%.

The Council Tax freeze only works if your council decides it can cope with the funding provided by the government.

However town &parish councils are excluded from the pocess, and this year our local town council (crowborough) increased by their share of the bill by 13%

[jesta1865]

0a said:

No business I've been in has a broad assumption of inflation year to year as a default excuse for budget increases and as you say there should be downwards pressure on local government wages given we're supposed to be getting rid of employees.

My issue above is with a non-increase being portrayed as a cost.

well all the financial institutions i have worked for have always factored in inflation to look at targets, budgets and long term planning.

i agree that a non increase being portrayed as a loss is galling, but its normally the media that portray it this way, such as 'a freeze on fuel duty will cost the treasury' no it won't bbc it won't cost them anything they will just get less pried from my grasping fingers.