Sunday, January 15
by Christine on Sun 15 Jan 2012 10:35 PM GMT
Council Tax Reform
A Non Party Political Nationwide Campaign
More revelations regarding the Local Government Pension Scheme and the cost of redundancies (by Janet Kelly with a small contribution by me)
Some of you may have read articles in the press recently on the subject of Councils' reserves. Councils are advised to keep sufficient sums of money in reserve so that they have a financial cushion to meet sudden unexpected costs. We call it saving for a rainy day. The size of some of these reserves is undoubtedly questionable, but on the other hand perhaps if central Government had thought along those lines a few years ago the country as a whole would not be in such a mess!
Whilst some Councils have managed somehow to increase their reserves (how, in these cash strapped times - perhaps these particular councils are given too much in the way of grants?), some are drawing on theirs. But these reserves are not a "bottomless pit". When they are gone, they are gone. We believe it is absolutely right on these "rainy days" for reserves to be used to ease pressure on services. And when the Government's freeze grants cease they will undoubtedly have a part to play in keeping council tax down. We are concerned, however, that some Councils are digging into these reserves to fund redundancy schemes which are far in excess of statutory requirements.
One thing that this Government must do is to insist that Councils renegotiate the terms of redundancy, so that this debacle can never reoccur. What may have seemed fair years ago, when salaries compared to the private sector were low, is now just an unacceptable ‘perk’ for local government employees. Things have got to change – not next year or the year after but now. We as taxpayers can no longer afford to maintain these levels of payments. Councils have paid and will be paying out thousands of pounds to employees, some of whom will never have to work again. But how many of those receiving extortionate pay outs are being re-employed as consultants or moving directly into another post elsewhere? We believe that some of these people have taken "flexible early retirement" only to be re-employed on a part time basis, this cosy arrangement enabled by enormous "strain" payments into the LGPS (see below). What will happen in a couple of years time? Will these employees be able to apply for a full time job, with the same council? You tell me, I feel it is quite possible under the existing rules.
Isitfair is concerned that the public is not made aware of the full costs of redundancies. The up front payments are mind boggling in themselves, but over the last few months we have been trying to shine some light into the secretive and complex world of "strain charges". Those staff made redundant at the age of 55 or over are entitled to draw their full, unreduced pension straight away, with the result that their pensions are drawn earlier and for a longer period than for normal retirements. Employers (ie, us) are obliged to top up the pension fund to make sure there are sufficient funds available to pay the pension. This is the "strain charge".
Isitfair has obtained from council sources more details about how strain charges are calculated insofar as the Local Government Pension Scheme (LGPS) is concerned, and asked that the explanation be based on two hypothetical cases, namely:
Male, salary £100,000, 30 years service, made redundant at age 56
Female, salary £50,000, 25 years service, made redundant at age 56
The response runs to five A4 sides containing some very confusing calculations, but the principal results are:
For the male: Full pension payable - £39,166 per annum; Lump sum payable on retirement - £97,500; Strain charge - £129,168
For the female: Full pension payable - £16,458 per annum; Lump sum payable on retirement - £39,375; Strain charge - £58,469
(Bear in mind that these two employees would have had an entitlement to more than generous redundancy pay too!*)
But we must stress these are hypothetical cases. We know we have no right whatsoever to demand details of individual pensions, invasion of privacy and all that, but we do believe very strongly that councils should be required to divulge not only how much has been paid out in redundancy payments but also details of strain charges. This is our money, whether it comes from reserves or gained from cost cutting measures. At the very least annual totals should be clearly shown in their Statement of Accounts. We find it amazing there is no requirement for this at the moment. An instance where, perhaps, local government is not quite as transparent as Eric Pickles would wish.
*Here is a reminder from the last newsletter regarding redundancy payments. The material below is relevant to our council. I cannot say that the same applies to all councils, but I am prepared to bet that many may have the same system and that some are even more generous.
Employee, 50 years old, 15 years service, salary £75K (average for a senior manager)
Basic statutory scheme payment £8,000
County Council’s compulsory scheme payment £28,000
County Council’s enhanced voluntary scheme payment £56,000
It has long been our belief that there are too many councillors, and on occasion councillors have agreed with us. While councils continue to cut the number of employees, some of you may have missed the news that some councils are increasing the number of councillors receiving special responsibility payments. The number of councillors wearing more than one hat (and possibly holding down another job) is increasing. Creating a new cabinet place can mean a hefty rise in allowances, in one particular case more than £17,000.
Surely what is sauce for the goose should be sauce for the gander. What sort of message is being sent out to the public? While lower paid employees are being made redundant, it is OK to pay out the savings made by this redundancy to enhance a councillor’s salary.
If you have any further details on this, in your area, we would be pleased to here from you.
Some of you may have read in the press this week that the banding scam is still alive and kicking. Some companies offering to see if your house is in the wrong band, are asking for money ‘up front’ Should you receive a mail shot or a telephone offer to carry out this service, please put the telephone down or put the leaflet in the bin. This service is free of charge to anyone from the Valuation Office Agency. If you can’t find the number in the telephone directory, your council will generally supply it.
Thursday, September 22
by Christine on Thu 22 Sep 2011 12:28 PM BST
Isitfair is a nationwide campaign calling for the reform of the council tax system. www.isitfair.co.uk
We have recently received a copy of the Liberal Democrats' discussion paper on local government funding.
Earlier Lib Dem policy papers have included land value tax and we have always maintained that LVT is not fair. What worries me is the position of power now held by them and the possibility that, like the mansion tax, other aspects of this paper may be used as trading off tools.
I was always under the impression that the Liberal Democrats were very keen on fairness, perhaps I have been wrong all along, or maybe my version of fairness is out of kilter.
I know that I have used this example before and I make no excuses for doing so again. Why should council tax on a similar property across the country vary so much? Why should the tax vary between Band B and Band H for a property of a similar size in a different part of the country?
All the Isitfair campaign calls for is a fair and equable way of funding local government. The present system is unfair and unaffordable and until any of these politicians demonstrate that they have at last grasped that
(a) one of the flaws in the current system is its failure to recognise that the value, and the consequent banding, of your property is dependent not on how grand or how simple it is, but on where in the country you live; that
(b) so-called "wealthy" areas are not entirely populated by "wealthy" people; and that
(c) the differences across the country in Formula Grant per head are so huge that there is no possible chance that the system can be fair,
they should go back to the drawing board. Perhaps this is what the Lib Dems are trying to do, but we believe that Land Value Tax does nothing to correct the situation at point (a) above. And actually, neither does Mansion Tax which fails to recognise that a home designated a "mansion" in one area will be very different indeed from one designated a "mansion" in another.
We all realise that local government must be funded but how it is done, must be fair for all
Friday, June 24
by Christine on Fri 24 Jun 2011 10:42 PM BST
The rich get rich and the poor get poorer’, never did the words of this old song ring more true than today.
Anyone who has faced redundancy knows it’s pretty awful, so most of us will feel some sympathy for anyone finding him or herself in that situation.
However, the County Council’s Enhanced Voluntary Redundancy Scheme is extraordinarily generous especially when one considers it is financed by the public purse. Yes, the funds (£10 million has been set aside) may be coming from the Council’s reserves, but it should not be forgotten that this is our money, held by the Council on our behalf.
The County claims that cutting management posts will save around £36 million over the next four years, so the up front costs are worth it. We say that if they had stayed with the compulsory redundancy scheme the savings would have been substantially more.
Here is an example:
Employee, 50 years old, 15 years service, salary £75K (average for a senior manager)
Basic statutory scheme payment £8,000
County Council’s compulsory scheme payment £28,000
County Council’s enhanced voluntary scheme payment £56,000(BBC South Today figure)
The Leader of the Council, Ken Thornber, says that this generous redundancy pay is deserved. I fail to see why. The Scheme is open to all employees, but let’s concentrate on the 150 senior managers whom the Council is looking to lose and who are being encouraged to take advantage of this Enhanced Voluntary Redundancy Scheme.
They have received very high salaries, possibly bonuses or honorariums in the recent past. These high salaries, accompanied by an employer’s contribution to the Local Government Pension Scheme of around 19% on top of those salaries, lead to the sort of pensions most of us can only dream of, and of course, to these very high redundancy payments.
When interviewed by BBC South Today recently, Ken Thornber drew particular attention to employees with 30 to 35 years service, salary of around £60K - £70K, who have “earned that money and are going to forego it for 2, 3, 4 years.” This appears to us to indicate that at least some of these volunteers are close to retirement, and we are given to understand that if they are aged 55 or over, they will be entitled to the immediate, unreduced payment of LGPS benefits. If this is the case, then for some, on top of this generous redundancy package will come their equally generous pension. For that person with 35 years service, at present earning £70K, we believe this pension to be £31,500 plus a lump sum of £84K. Details can be found on the Hampshire County Council website http://www3.hants.gov.uk/employee_guide_2011_final.doc see pages 7 and 8. Readers see the rules and work it out for themselves. . .
“Struggling”? We don’t think so. And let’s admit it, how many of us – in their shoes – wouldn’t be jostling for a place in the queue?
I am contributing to this out of my pension as all other council taxpayers and income tax payers do from their often meagre salaries. The claim that the public sector is lower paid than the private sector is now something that no longer applies and hasn’t for many years – and yet the terms and conditions of employment give them the cream, while we, the employer, in many cases go without
The Council says that this money is available because of savings made over the years. Good financial management, saving for a rainy day. Yes, Isitfair acknowledges this. But we find it very difficult to agree this is the best way of using money, which may soon, in these hard times, be genuinely needed elsewhere.
Many of our members have contacted us since the BBC interview, most of them asking the same question. If the Council is in a position to make these people redundant now, why were they employed in the first place? And being rather cynical, how many of these redundant senior managers will turn up as consultants in a few months time?
Sunday, February 20
by Christine on Sun 20 Feb 2011 05:54 PM GMT
Isn’t it time for Council Tax to be Scrutinised? by Brian Jaye
This is the question that should be on every taxpayer’s mind especially in times of austerity.
Every taxpayer should reflect that this property tax is now in its eighteenth year, it is a tax which has increased more than any other method of taxation.
We have all read that it doubled under the New Labour administration, but that is not what we should be looking at. We need to look back to what you were charged in 1993/94. It is only then you arrive at the true cost to you the taxpayer.
As an example, and not using average percentages but reality, in
It is because of this I met with Robert Walter MP [Cons.] for
Isitfair feel that we should not give up our aim to achieve a Council Tax Debate in the House of Commons as apart from some passing comments by some Members of Parliament it has never been scrutinised since its inception in spite of all the problems associated with it.
Remember, when the original Council Tax Bill was presented to the House of Commons in March 1991 it included the following statements, [a] seen to be fair [b] take into account ability to pay [c] ease of collection. There are other elements within the document which certainly do not apply, such as “there will be a single bill for each household comprising two essential elements, the number of adults living there and the value of the property”, and “the system should ensure that regional variations in property values do not lead to disproportionate bills in high price areas”. Do these principles exist today? Simply, No! With regards to “ease of collection” 1.2 million court summonses were issued in
We therefore request all our members to contact their Members of Parliament requesting them to place before the Backbenchers’ Business Committee a request for Council Tax to be debated in the House of Commons.
More can be found on this subject www.isitfair.co.uk
Sunday, December 5
by Christine on Sun 05 Dec 2010 12:39 PM GMT
Isitfair a Nationwide Campaign Calling for the Reform of the Council Tax System
ISITFAIR MEETING AT DCLG 1st November 2010 Council tax and Parish Councils (our report)
1. PARISH COUNCILS
a. We drew attention to the situation in which over the past few years District Councils have been offloading a number of their non-statutory duties to Parish Councils whilst retaining the money they would have had to spend on these duties. It is plain that this has been done purely to avoid capping by central Government. We are becoming increasingly concerned that this practice will become more and more prevalent as the inevitable cuts "kick in".
b. We handed over Mike Schofield’s report on this subject which appears on the Isitfair website.
c. We assured Mr Neill that we were, of course, aware that parish/town councils do not receive grants from central Government. He said that it followed that parish council precepts could not be "capped" by central Government. He also said that it was up to the parish councils whether or not they took on these non-statutory duties.
d. A point which we did not have time to make: It has until recent years been the norm for the parish/town council precept to be the smallest entry on our council tax bills. This is not now always the case. Some of our members report that their parish precept has overtaken that of the Fire and Rescue Authority, and in a number of cases it has overtaken that of the District.
a. We were informed that no decision had yet been made on whether a parish/town council would be subject to a local referendum if their precept increased substantially. The criterion would have to be "pounds and pence" rather than percentage.
b. We emphasised the point that in our consultation with Isitfair members on the Referendum proposal, 87% strongly agreed with the statement, "Only those who actually pay Council Tax should be entitled to vote in any referendum on the level of Council Tax to be charged. Electors who do not pay Council Tax, (or receive 100% Council Tax Benefit), should be excluded from such consultation." The reception for this was rather lukewarm, and we suspect that it is considered that to include only people who actually paid council tax would create too many administrative difficulties.
3. COUNCIL TAX AND GRANTS
a. Mr Neill agreed that the tax is too high, but drew attention to the recent government proposal to enable a "freeze" for one year by those authorities who chose to take part. It had been hoped to do this for two years but this was not possible in the current financial climate.
b. There is no doubt that the Government acknowledges that the council tax system over the past ten years has lost sight of some of its original principles. The following was included in the papers handed to Mr Neill:
On 21 March 1991, Michael Heseltine introduced the House to the principles to be applied to the new tax which we all know now as council Tax. Amongst these principles was this:
"The system should ensure that regional variations in property values do not lead to disproportionate bills in high price areas." And this:
"Fairness. Nobody likes paying taxes. But in our society taxes have to be basically acceptable to taxpayers; and to achieve that they must be perceived to be fair."
c. Formula Grant has been used to reward (or punish!) some areas of the country over others. Our research shows that the Shire counties have suffered substantially.
d. The consultation on Formula Grant Allocation ended last month, and we were assured that work is in progress to improve the current situation. Mr Neill said that another Local Government Funding review was planned.
e. Isitfair always aims to be constructive, and Michael spoke briefly about his paper on
(1) Central Government Grants which outlined his suggestion that it would perhaps make more sense to base any Central Government grants to Local Authorities on the basis of the incomes of the residents of those Authorities, than basing them on property prices. Eric Pickles had previously shown interest in this and we were a trifle disappointed that Mr Neill more or less dismissed it as overly complicated.
(2) Referenda and Council Tax Benefit.
f. A copy of this paper follows below this email.
g. Michael said that it would be helpful if he could be put in touch with the department’s researchers, but this was refused. However, Mr Neill said he would be quite happy to receive any documents that we produce in the future.
4. COUNCILLORS AND ALLOWANCES
a. We have over the years become aware that some councillors are in receipt of multiple allowances: perhaps County, District, Fire and/or Police plus Development Agencies (soon to go), LGA, APA, National Park authorities. The more we look, the more we find, often quite accidentally in the course of unrelated research. We wonder, seriously, how these people can find the time needed to give all these appointments the attention they deserve!
b. We included a spreadsheet showing details of allowances paid to Hampshire county councillors, but emphasised that we had brought this merely as a flavour of what we know from our research is happening not just in Hampshire but across the country.
c. Although we believe that councillors should be required to divulge basic details of their "day jobs", we do not believe that they should be obliged to disclose their earnings from that source. We can see no reason at all, however, why they should not be required to disclose, in an easily accessible place, preferably on line, full details of how much they draw in total from the public purse.
d. Mr Neill considered this could place an unacceptable burden on council staff and that only a few people were interested anyway. We said that councillors should be enabled to do the job themselves. (Because the general public is on the whole unaware of the situation it does not mean that they are not interested!)
5. LOCAL GOVERNMENT ASSOCIATION (LGA)
This is just one of the organisations involved in the transfer of vast amounts of taxpayers’ and council taxpayers’ money from one pocket into another.
Subscriptions (from over 400 member authorities) 2009/10: £14,450,000. Tax payers’ money, paid from councils’ budgets.
Allowances to be paid to councillor members 2010/11: £993,213.
139 staff – salary bill: £7,413,366. Pension payments: £1,546,354. Chief Exec believed to be paid £245,000.
Mr Neill said LGA membership was voluntary (his local council had withdrawn). He had dealings with the LGA and had no problem with them.
Later comment We wonder if our conversation with the minister regarding the Salary of the CEO of the LGA played any part in the proposed reduction of said salary
6. LOCAL DEMOCRACY
a. We touched briefly on this. The low turnout at elections is depressing. A member has suggested that an election be declared null and void if turnout was less than 50%.
b. We think there are too many councillors. Mr Neill claimed that he/parliament could not instruct the Electoral/Boundary Commission to increase the size of Council divisions.
However, the government has already promised to reduce the number of MPs and to make parliamentary constituencies equal in size. If they can do this for Central Government, then why can they not issue the same guidelines/instructions with respect to Local Government?
c. And to return to the issue of parish councils, do we really want them? Judging by the abysmal turnout at election time, we have begun to wonder. It would appear there is a process in place to get rid of parish councils if residents no longer want them, but we gained the impression today that this issue is not one for Mr Neill’s department.
We unfortunately ran out of time but assume that either Bob Neill or his officials will take a good look at the papers we handed over to them. Amongst these were the following which were either not discussed at all, or covered only briefly:
Extravagance in Local Government with pieces entitled "The Chief Executive – Is this post really necessary?"; "Non-Jobs"; "Staff Perks". Not discussed.
Campaigning for Reform – A blast from the past. See paragraphs 3a-d above.
Anomalies. Wandsworth and
Council Tax and Student Abuse. This was a late addition.
Notes on the proposed reforms to the State pension. Another paper by Michael Boon. Also a late addition. It was mentioned during the meeting but appeared to be a subject more appropriate for the Department of Work & Pensions.
(All these documents are available either on the Isitfair web site, or from me. Christine.)
a. We felt this was not one of our most successful meetings. We also feel that it took place too soon in this Parliament and it would have been better to wait until Mr Neill had more time to give us. We believe we got our points over insofar as the unfairness of the grants, but it would have been so much better had there been time for Michael to go through his paper and explain it in more detail.
b. There remains a great deal of confusion amongst our members on capping and referenda as far as parish councils are concerned and we request clarification.
Clarification letter received from Bob Neill’s Office
Dear Mrs Melsom
As you know, Bob Neil MP has forwarded your email of 8 November, asking for clarification of the situation of town and parish councils in respect of council tax referendums following your meeting with him on 1 November to me to reply.
You particularly ask for clarification about capping. The referendums provisions will replace the use of the present central capping powers as part of the Government’s wider programme of decentralising power to local communities. Subject to Parliamentary approval, the necessary legislation is expected to come into force from 2012-13 onwards. For this reason the Government reserves the right to take capping action in 2011-12 should this be necessary. You will be aware that the current capping legislation does not apply to town and parish councils. However, the Government is nevertheless urging town and parish councils to exercise restraint and seek to ensure that council taxpayers are not faced with increased bills in 2011-12.
As set out in the consultation document, the intention is that parish and town councils should be included in the new referendum provisions subject to a deminimus threshold. This threshold will exclude such councils where either the increase in the basic amount of council tax is below a defined amount or where the total income generated is below a fixed level. It is anticipated that this will exclude the majority of smaller towns and parishes from the referendums provisions.
The threshold will be subject to principles proposed by the Government each year at the same time as the provisional Local Government Finance Report is published. These principles will be subject to consultation alongside that on the provisional Report, and also to final approval from the House of Commons.
You also mentioned in your email of 8 November that ISITFAIR members overwhelmingly support people who are not paying council tax, not taking part in any referenda and you ask for comments on this point. The Government intends that everyone who is on the electoral role will be able to vote in a referendum as is the case for local and national elections. All residents access or use local services in
some way or other and the Government believes that they are entitled to a view on the level of council tax increase proposed, and on the overall service provided by authorities.
Bearing in mind what has been said in this letter, and the results of our survey – 87% of you said that only those paying council tax should vote in any referendum on the level of council tax – I suggest that you write to your MP and make your feelings quite clear on this point.
Monday, November 29
by Christine on Mon 29 Nov 2010 10:54 PM GMT
Isitfair a Nationwide Campaign Calling for the Reform of Council Tax
Council Tax and Central Government Grant Michael Boon, October 2010©
Central Government Grants
• Council Tax is unfair in the sense that people in very similar financial circumstances pay very different amounts of Council Tax. This is mainly dependent upon which Local Authority they live in.
– While the use of property values is not ideal to determine what share of the burden any household should pay, it does work reasonably well within each Local Authority
– However, it does not work at all well between different Local Authorities.
- This is because the shape of the income distribution is different from the shape of the property price distribution – and there are many Local Authorities where the price of properties, and hence their banding, is out of line with both average and median incomes.
• Council Tax bears very little relationship to council spending - the highest spenders often have the lowest Council Tax, and vice versa.
On this basis, it would make more sense to base any Central Government grants to Local Authorities on the basis of the incomes of the residents of those Authorities, than basing them on property prices.
Any change from the present system would probably have to be gradual, so as to avoid any sharp shocks to those who would lose out. However, we note that the previous government did not take this into account when they changed the system for 2003-04 and onwards!
Referenda and Council Tax Benefit
• In general, Isitfair members have reacted positively to the proposals for requiring referenda to approve “excessive” Council Tax rises.
• However, we are concerned that those who do not pay Council Tax will find it in their interests to vote for “excessive” rises which don’t cost them a penny – but which such “excessive” rises will allow them to receive extra Local Authority services at other people’s expense.
– There are two ways around this problem. First, one could restrict voting in such referenda to those who actually pay Council Tax. Second, we could abolish 100% Council Tax benefit and ensure that everyone pays something towards the cost of local services. This would help to reduce the Central Government fiscal deficit!
- It seems a little strange that Central Government, which finances Council Tax Benefit, should allow Local Authorities to charge “excessive” Council Tax where there are large numbers of recipients of Council Tax Benefit in an Authority!
- In this context, it would seem sensible to pay any CTB according to some “approved” or average value for properties in a particular band. This would give those residents in receipt of CTB an incentive to vote for more frugal Local Authorities.
However, there are some problems with any use of the electoral system to restrict Local Authority spending:
• An examination of local election results has shown that there is no statistically significant difference in terms of council tax rises between councils where there is a change in control and councils where no change of control occurs.
– This is true both for council tax rises prior to the election and those subsequent to it
• There is no statistically significant correlation between the balance of funding in a local authority and the turnout at local elections for that authority
• Local authority spending is almost entirely determined by central government. Local authority spending can be predicted by a statistical model whose only inputs are parameters entirely determined by central government
– As a result, council tax is largely determined by central government also
• Before referenda are likely to work, there needs to be much more Local autonomy then there is at present.
– We note that the predictions of very local spending, (i.e. by District Councils), are less accurate than the predictions of total Local Authority spending, (i.e. including County Councils, Fire and Police Authorities), on the residents of those districts. Smaller authorities appear to be more responsive to local concerns, and less controlled by central government than larger authorities
• In general, there appears to be a common problem associated with highly progressive tax systems. Those who pay (say) only 25% of the cost of the services that they receive still get a very good deal even if those services cost twice as much as they ought to! They therefore have an incentive to vote for such services – however inefficiently they might be provided. Obviously, this leaves others to pick up the tab for inefficiency
– Council Tax is often thought to be a regressive tax. However, on the national scale, it would appear to be mildly progressive at incomes below the median and mildly regressive on higher incomes.
– Making Council Tax more progressive, (for which many people argue), would actually increase the unfairness of the system – sine the unfairness affects those poor people living in Local Authorities which receive very little by way of government grants but where low banded property is very scarce.
Thursday, September 16
by Christine on Thu 16 Sep 2010 10:33 PM BST
Council Tax Reform
A non party political nationwide campaign
Having consulted with its membership, Isitfair is pleased to make these submissions relating to the proposal that referenda should be held to veto any "excessive" Council Tax increases.
In general our members reacted positively to the proposals contained in the consultation document, although the comments accompanying their responses to our survey revealed a number of widely held concerns. We believe, therefore, that there are a number of improvements that could be made. In summary these are:
1) We believe that any "cap" or trigger point for a referendum should be expressed in terms of pounds per dwelling for each particular type of Local Authority. Every equivalent Authority would then be subject to the same, identical pound cap. This means, for example, that all fire services should have the same cap, all those county councils that do not run their own fire services should have the same, (but a different), cap, all those County Councils that do run their own fire services should have a cap equal to the sum of the caps for the separate fire service and county council caps and so on. The reason for this proposed modification is to avoid rewarding extravagance and punishing frugality - which is what a percentage based cap would tend to do. An excellent practical example of this is the recent capping of the Lincolnshire Police Authority whose proposed budget represented a large percentage increase - partly, we suspect, because, up to that time, Lincolnshire Police had been the lowest spending Police Authority in
2) We believe that Councils should not be entitled to increase their precepts beyond the cap or referendum trigger point without their having received prior approval through a referendum. This would obviate the need for any re-billing. If the referendum grants approval for a greater Council Tax increase, the difference would be collected through the following year's Council Tax bill. The extra services represented by the "excessive" increase could be supplied immediately once the approval for them had been obtained. (We would expect that finance would be easy to arrange given that the income stream to service it would, in effect, be guaranteed.)
3) Many of our members expressed concern about the costs associated with holding referenda. We believe that the referendum ballot papers, where needed, should be sent out along with the Council Tax bill and that the referendum should be a postal vote only. Our membership feel very strongly that only those who actually pay Council Tax should be entitled to vote on any "excessive" increase. (Voting for the Local Council - and what the money is spent on - is a different matter altogether.) Our proposal would ensure that only those named on the Council Tax bill would receive a vote on this type of issue. We believe that this proposal has additional merit, since it would appear that the Government wishes to limit Council Tax increases. Those that do not pay have, in effect, a vested interest in raising Council Tax on others in order to be able to consume more services. This especially applies to students for example.
4) A number of our members also expressed concerns about the costs associated with preparing alternative budgets. We believe that the solution is to have a "base" budget that is within the "cap" together with a costed list of additional services that could be provided if the increased Council Tax required to finance them were to be approved. In order to avoid any emotional blackmail, it would also be appropriate to indicate those expenditures that are already included within the "base" budget.
5) Some concern was also expressed by our membership that some Councils might use the anticipated additional costs of a referendum or budgeting as a sort of blackmail to enable them "to push the limits" on increases. We are not particularly concerned with either of these, (the referendum is not optional so only the re-budgeting would represent an additional cost - and this would disappear if our ideas under 4 above were to be adopted), but we do believe that Councils might need an additional incentive to behave responsibly. One idea is that any defeat in a referendum would trigger an immediate local election for all membership of the defeated authority. We note, however, that Police and Fire Authorities are not directly elected, (and as the Audit Commission reported, these were the ones that had the largest percentage increases in their precepts in 2003-2004). Although not directly relevant to this consultation, we would welcome the idea of elected Police "sheriffs" and, if proposed, Fire bosses.
6) Although not specifically asked about in the consultation questions, we believe that the issue of canvassing would be best addressed by ensuring that no public money was spent on doing so. We would anticipate that many other organisations would canvass, and it seems a bit odd that Local Authority members should not be enabled to do so as well.
Our responses to the questions asked:
In detail, our responses to your questions are:
Q1) Do you agree that local precepting authorities, such as town and parish councils, should be included within the provisions for council tax referendums?
We certainly believe that all precepting Authorities should be included within the referendum proposals. We believe that we have strong evidence that capped Authorities have pushed down the financing of services to uncapped ones - principally Parish Councils. This would defeat what appears to be the Government's objectives.
Q2) Are the Local Authorities (Conduct of Referendums) (
This is a technical matter on which we are not qualified to express an opinion.
Q3) Are there any practical difficulties in requiring council tax referendums to take place no later than the first Thursday of May?
We do not believe that the timing of a referendum is crucial provided that "excessive" increases can only be imposed after approval via a referendum.
Q4) What are the advantages and disadvantages of holding a council tax referendum on the same day as another local referendum, or jointly with a local and/or general election? Current regulations allow for higher expenses per elector in a referendum than in a local election – would this raise any concerns if both votes are held on the same day?
We are concerned that multiple ballots could lead to electoral confusion, (as happened in
Q5) What provision, if any, should be made for properties where the council tax payer is not a local elector?
We believe that all those who pay Council Tax should have a vote. If, as we propose, the ballot papers are sent out with the bill, the problem envisaged by this question should not arise. Perhaps the question should be turned around to: "What should happen when electors are not Council Tax payers?"!
Q6) Does the timetable at Annex A provide sufficient stability and certainty for local authorities when planning their budgets? Does it provide sufficient time to organise and administer referendums?
We believe that Local Authorities should plan their principal budgets within the cap limits. If approved rises are only collected in arrears, (as we propose), then we would anticipate few difficulties. Although we might expect some "teething" problems in the first year, we would expect any competent and well managed organisation to be able to cope with any deadline provided that they know what that deadline is early enough.
Q7) Is it right to give local authorities the discretion to issue new bills immediately, offer refunds at the end of the year or allow credits against liability in the following year.
We don't think so. Issuing bills after approval seems to be more sensible.
Q8) How should billing authorities treat bank interest earned on excessive increases that have been rejected in a referendum?
If our proposals for retrospective billing are adopted, then this question will not arise.
Q9) What practical difficulties, if any, would there be for a billing authority seeking to recoup the cost of a referendum held on behalf of one or more precepting authorities?
Again probably some initial "teething" problems but nothing insurmountable. We are not really qualified to express an opinion on this, though.
Q10) Are there any technical difficulties with the removal of alternative notional amount reports?
This is a technical issue on which we are not qualified to express an opinion.
Q11) With the abolition of capping, is there any reason why authorities should be required to calculate a budget requirement each year?
We believe that all good managements produce budgets at least once a year - and usually on a rolling basis. We see no reason why Local Authorities should be any different. Indeed, we would prefer it if Local Authorities were to use zero based budgeting techniques.
We are somewhat concerned that the proposals are based on a misunderstanding of the cause of the problem. Our analyses show that the major cause of "unfairness", as well as excessive increases in, Council Tax are associated with the Central Government grant system and the way that, over the years, more responsibilities have been placed on Local Government without providing the matching finance. Central Government seems to have retained power but devolved responsibility.
Some of our membership have expressed their concern that our participation in this consultation process might be taken as our acquiescence in other aspects of the Council Tax system. We continue to believe very strongly indeed that radical reform of the system is urgent and necessary, (not least to the grant system). However this is beyond the scope of this response
I have attached a summary of the survey Isitfair carried out through e mail membership. I hope you will find it interesting
Christine Melsom, Chair
CONSULTATION ON PROPOSAL TO USE REFERENDA TO VETO EXCESSIVE RISES IN COUNCIL TAX – RESULTS OF ISITFAIR SURVEY – 3 SEPTEMBER 2010 Statement 1: Only those who actually pay Council Tax should be entitled to vote in any referendum on the level of Council Tax to be charged. Electors who do not pay Council Tax, (or receive 100% Council Tax Benefit), should be excluded from such consultation. Strongly agree: 87% Agree: 7% No opinion: 2% Disagree: 2% Strongly disagree: 2% Statement 2: Councils should not be entitled to raise Council Tax levels beyond the referendum trigger point without having received prior approval through a referendum. The extra Council Tax, if approved, would be collected through the following year’s Council Tax Bill. Strongly agree: 78% Agree: 19% No opinion: 1% Disagree: 2% Strongly disagree: 1% Statement 3: The capping regime (with some minor modification see Notes (a) and (b) above) should remain in place unless, for a particular Local Authority, the electorate approves its removal, for that particular year, via an appropriate referendum. Note (a) was on the inclusion of Town and Parish Councils; note (b) was on the criticism of the previous government’s policy of setting capping principles after local authorities had set their budget requirements. Strongly agree: 70% Agree: 25% No opinion: 4% Disagree: 0% Strongly disagree: 1% Statement 4: If the electorate refuses to sanction a Council Tax rise through a referendum, then this should automatically trigger a local election for members of the relevant Council. Strongly agree: 64% Agree: 19% No opinion: 8% Disagree: 7% Strongly disagree: 2% Statement 5: I believe that this proposal, in spite of its potential cost, has some merit. Strongly agree: 64% Agree: 32% No opinion: 2% Disagree: 0% Strongly disagree: 2% isitfair/Sep 10
CONSULTATION ON PROPOSAL TO USE REFERENDA TO VETO EXCESSIVE RISES IN COUNCIL TAX – RESULTS OF ISITFAIR SURVEY – 3 SEPTEMBER 2010
Only those who actually pay Council Tax should be entitled to vote in any referendum on the level of Council Tax to be charged. Electors who do not pay Council Tax, (or receive 100% Council Tax Benefit), should be excluded from such consultation.
Strongly agree: 87%
No opinion: 2%
Strongly disagree: 2%
Councils should not be entitled to raise Council Tax levels beyond the referendum trigger point without having received prior approval through a referendum. The extra Council Tax, if approved, would be collected through the following year’s Council Tax Bill.
Strongly agree: 78%
No opinion: 1%
Strongly disagree: 1%
The capping regime (with some minor modification see Notes (a) and (b) above) should remain in place unless, for a particular Local Authority, the electorate approves its removal, for that particular year, via an appropriate referendum. Note (a) was on the inclusion of Town and Parish Councils; note (b) was on the criticism of the previous government’s policy of setting capping principles after local authorities had set their budget requirements.
Strongly agree: 70%
No opinion: 4%
Strongly disagree: 1%
If the electorate refuses to sanction a Council Tax rise through a referendum, then this should automatically trigger a local election for members of the relevant Council.
Strongly agree: 64%
No opinion: 8%
Strongly disagree: 2%
I believe that this proposal, in spite of its potential cost, has some merit.
Strongly agree: 64%
No opinion: 2%
Strongly disagree: 2%
Friday, July 2
by Christine on Fri 02 Jul 2010 08:47 PM BST
I am a founder member and chairman of the Isitfair campaign and as a result I receive letters from all over the country from members telling me their stories regarding council tax, suggestions on how the tax could be made fairer and their difficulties in paying. I also receive a lot of information on how councils spend taxpayers’ money.
Firstly, a letter received this morning from an Isitfair supporterin the
Both she and her husband are of pensionable age and receive no state benefits. She had since retirement taken on two cleaning jobs to help pay the £1,200 council tax due on their home. Recently due to the recession she has lost one of these jobs and the second has cut the hours. She has been unable to find other work.
Of course you will say that they should apply for benefits – but they have just too much in the way of savings. Like thousands of other across the country they are asset rich and income poor. Savings are required to pay for the upkeep on a property they have struggled to buy through their working years. It is their rainy day money, put by for emergencies. Unlike Governments, that is what they did, they spent according to their means and saved for those rainy days because, unlike people living in rented property, there is no one else who will pay for replacements and repairs. They are people living on the edge of the benefit system, financially worse off than those receiving all the state benefits.
Secondly, you can imagine my anger this morning when a reporter telephoned me to ask my opinion on the bonuses or emoluments being paid to the executive staff on councils throughout the country. People already receiving huge salaries and contributions to their pensions from the public purse, being paid bonuses larger than many of us (including council staff) receive each year to live on and even bring up a family. It seems that monetary restraint applies only to those in the lower echelons of public service.
So here we have, on the one hand, this lady of retirement age worrying about how to pay her council tax bill, and taking on cleaning jobs to do so and, on the other hand, people employed by the council receiving fivefigure bonuses on top of salaries so enormous they beggar belief. There is something very wrong here.
You may say that these high paid executives are responsible for huge budgets, but are they really? If they are, then why are we paying millions of pounds every year to councillors? Councillors, I would add, who are also receiving high salaries (or if you really want to be picky, allowances), can also join (and do) a very favourable Local Government Pension Scheme. You must remember that everything in the public sector is paid for by the private sector.
The world has gone mad.
Many councils have prepared themselves for shedding staff. They have continued to recruit and still recruit. Last in, first our Easy come, easy go.
The proposed £250 per annum pay rise for the lowest paid staff now seems to me to be more of an insult. I just hope that when the good times roll the flat monetary rise should apply across the board. The highly paid executives, living in there own little world of protected wealth and advantage, and thumbing their noses at their paymasters, must surely receive their comeuppance.
Friday, June 25
by Christine on Fri 25 Jun 2010 06:03 PM BST
Local Government Financial Statistics England 20 2010 tells us that:
Equivalent annual publications are available from the National Assembly for Wales at www.wales.gov.uk/statistics (external link) and from The Scottish Government at www.scotland.gov.uk/statistics (external link).
Monday, June 7
by Christine on Mon 07 Jun 2010 09:09 PM BST
"Those in areas of high property values have no choice but to pay perhaps half as much again or maybe even double that paid in cheaper areas merely to get a roof over their heads. I say again, they have no choice if they want to stay in the area in which they work and where their families and friends live. They commit a far greater proportion of their income to servicing hefty mortgages. When the property is finally theirs, of course it is a valuable asset, but they have paid dearly for it. We have to remember that it is only an asset when sold – until then the value means little, one has to live somewhere. Why are they punished, then, by absurdly high council tax, both throughout their mortgage years and afterwards, totally out of proportion to that paid by those in similar properties elsewhere?
In his speech to the House of Commons on 21 March 1991 prior to the introduction of Council Tax in April 1993, Michael Heseltine said, "...the system should ensure that regional variations in property values do not lead to disproportionate bills in high price areas." Something has plainly gone badly wrong. What is the new government going to do to put this matter right?
Perhaps the place to start would be Formula Grant?
The grant system is due for a make-over. A manipulative Government has used this as a tool to tighten the screw on councils not flying their flag. Many areas of the country have been starved of funding while others are awash with cash. The system must be made fairer, and the sooner the better.
There is little to indicate that incomes, especially for pensioners, vary much across the country. Here is one example (and there are many). It may surprise you to know that the median income for Sunderland and for Eastbourne is about the same, but the average council tax per dwelling in
Tuesday, April 13
by Christine on Tue 13 Apr 2010 11:02 PM BST
Town and Parish councils precepts
None of the parties has mentioned anything about correcting the anomaly that allows town and parish councils to increase their share of the council tax bill (their precept) by more than the cap that applies to other, higher authorities. Being well aware that the cap does not apply to town and parish councils, a growing number of higher-level councils (County/District/Borough/City) are starting to off-load some of their non-statutory duties onto town and parish councils in their area – but keeping the money that they would have had to spend on these duties. This off-loading has meant that many town and parish council precepts have rocketed such that, in a growing number of cases, the amount demanded by the town/parish is as much as, or even more than, the amount demanded by the district/borough council.
Late news: Government figures released on 24 March reveal that the average Band D council tax set by local authorities in
Sunday, January 31
by Christine on Sun 31 Jan 2010 01:06 PM GMT
Isitfair asks What will happen to Council Tax after the next general election?
The revaluation in Wales was trumpeted as being "revenue-neutral" i.e. the revaluation would not result in any more, or any less, CT being collected: it would just be a redistribution to make the whole thing "fairer". What they said was that 25% of CT payers would see an increase; 25% would see a decrease and 50% would be unaffected.
What actually happened was that the revaluation ALONE resulted in 9% more CT being demanded. Only 8% ended up paying less, and 32% ended up having to pay more. Some had to pay a
If the same revaluation exercise here in
And would they also do away with the capping regime?
And - unless we have missed it - the Conservatives have said nothing about how the 2.5% will be calculated, but we understand that this "freeze deal" will apply to each individual precept (County Council, District Council, Police and Fire Authorities).
The Conservatives have also said they would not go ahead with a property revaluation for council tax purposes - but that they would do away with the existing capping regime. They are in favour of the greater use of local referendums to help guide decisions. They claim they will make the local government funding settlement more transparent.
The Liberal Democrats
And - the fringe parties (Greens, UKIP and others - even the BNP) - could have an influence on the make up of the next parliament if it is close-run thing between Labour and Conservative.
Town / Parish precepts
None of the parties has mentioned anything about correcting the anomaly that allows town / parish councils to increase their share of the council tax bill (their precept) by more than the cap that applies to other, higher, authorities.
Being well aware that the cap does not apply to towns and parishes, a growing number of higher-level councils (County/District/Borough/City) are starting to off-load some of their non-statutory duties onto towns and parishes in their area – but keeping the money that they would have had to spend on these duties.
This off-loading has meant that many town and parish precepts have rocketed such that, in a growing number of cases, the amount demanded by the town/parish is as much as, or even more than, the amount demanded by the district/borough council.
In a Green paper in 2000, and in another document issued by the Department for Communities and Local Government in 2002, the current government has admitted that this off-loading can also lead to double taxation, in that householders can be charged twice for the same services.
So - even though the current government have been aware of this possible double-taxation business for 10 years, and have issued Green Papers and other reports about it, neither they, nor any of the other parties, have said anything about putting a stop to it.
Friday, November 27
by Christine on Fri 27 Nov 2009 11:32 PM GMT
So this Government thinks a 3% rise in council tax is OK.
Three percent is unacceptable for anyone this year when many are receiving no rise in their income whatsoever. The rise in state pensions does not cover this amount and the low paid will struggle to pay any rise. I know that the immediate response from the Government will be 'council tax benefit is available to those in need' - but it is not. The threshold for pension credit has been raised to £10,000 and opens the gateway for thousands to receive benefits of all kinds. The threshold for council tax benefit has remained the same £16,000. Sir Michael Lyons in his inquiry, which has been almost ignored by Government, said that this ceiling should be raised to £50,000 and eventually disappear - and that income should be the only criterion for assessing entitlement to council tax benefit. The Government should insist that there be no rises this year on a tax that has been continually inflated by their own stealth. They should also ensure that Government grant is distributed fairly to help all councils in these straightened times. As all averages, they do not often tell the full story ? 4% sounds very good but many councils will receive much less and many councils will receive much more than that figure ? depending very much on where you live.
Remember the treasurer of our council? He said that if he received the same grant as some councils, he would not have to levy any precept on the council tax payers of Hampshire. How can that be fair?
Isitfair is a non party political campaign calling for the reform of the council tax system. Please visit www.isitfair.co.uk
Monday, November 16
by Christine on Mon 16 Nov 2009 02:39 PM GMT
On 21 March 1991 Michael Heseltine, who was at that time the Secretary of State for the Environment, opened a debate in the House of Commons on the proposed review of local government in
· “We believe that councils should be accountable for their actions and that there should be a direct and visible relationship between the costs of services and the local bills to which they give rise. We believe that those bills should be spread widely and fairly throughout communities; that they should bear some relation to people’s ability to pay; and that it should be possible to levy and collect them without difficulty.”
· “…there will be a single bill for each household comprising two essential elements, the number of adults living there and the value of the property.”
· “… the system should ensure that regional variations in property values do not lead to disproportionate bills in high price areas.”
WHAT HAS GONE WRONG?
WHAT PLANS ARE THERE TO PUT MATTERS RIGHT?
Isitfair is an Independent, Non Party Political Campaign, Calling for the Reform of the Council Tax System
Please Visit www.isitfair.co.uk
Monday, September 21
by Christine on Mon 21 Sep 2009 04:35 PM BST
PRESS RELEASE ISSUED BY THE ISITFAIR COUNCIL TAX PROTEST GROUP
For further press information, please contact: Christine Melsom on 01428-712680 or E-mail email@example.com
21st September 2009
FOR IMMEDIATE RELEASE
[start of press release]
The Isitfair Council Tax Reform Campaign asks “How can councils justify these gigantic salary rises?” Answer: Because no one seriously challenges them and their extravagance.
Many Local Government Chief Executives have recently been awarded unacceptable salary rises this year. How can any council justify an increase of as much as 45%? Who authorises and who approves pay rises of this magnitude? The tax payers have a right to know the answer to these questions.
There is little to choose between the reviled bankers, the cheating MPs, and the greedy chief executives employed by the councils and paid by the tax payer. Taking pension contributions and NIC into consideration, the cost of employing a chief executive on £200,000 a year is well over A QUARTER OF A MILLION POUNDS.
Restraint in public sector spending and public sector salaries must be a priority until this country is out of debt.
How can the foot soldiers in both the public and private sector be expected to accept a pay freeze when the management continues to receive these obscene increases? We should all be tightening our belts. All of us.
The council tax payer is already hard pressed to pay their bills and should not be asked to fund ANY increases at all this year.
[end of press release]
NOTES for Editors :-
Isitfair is a UK-wide, non party-political campaign for the reform of the existing property-value based system of Council Tax.
Isitfair wants a fairer system of taxation for local services that is related to everyone's ability to pay.
Isitfair represents people of all age groups (not only pensioners) who are unfairly affected by Council Tax.
For further press information, please contact: Christine Melsom on 01428-712680 or E-mail firstname.lastname@example.org
You can find more information about the Isitfair campaign at www.isitfair.co.uk
Isitfair The Nationwide Campaign Calling For The Reform Of The Council Tax System. Please visit www.isitfair.co.uk
Sunday, August 23
by Christine on Sun 23 Aug 2009 09:47 PM BST
The true cost of council employees
According to the council tax action group, Isitfair, (www.isitfair.co.uk) reports about the number of council employees being paid £50,000, or more, do not tell the full story with regard to the total, taxpayer-funded cost of employing these people.
This is because these reports were based only on the salaries paid and did not take into account other costs for which the taxpayer also has to foot the bill and in particular costs associated with employer (i.e. taxpayer) contributions to the employees’ pensions. These other costs add considerably to the total as shown in the table below.
Whether all this money – the salaries, the employer pension contributions, and the employer NIC - comes from council tax or from general taxation is neither here nor there. Whichever way you look at it - it is all OUR money – and, under threat of legal action, we are all forced to pay it from income on which we have already paid our own income tax, NIC, VAT, and other taxes.
And – to cap it all - from what is left of our income we are also expected to make our own pension arrangements.
This state of affairs cannot continue.
1. Employee pension contribution. In 2008-09, and depending on how much they were paid, council employees contributed between 5.5% and 7.5% of their gross annual pay into the Local Government Pension Scheme (the LGPS). The more a person was paid, the greater the percentage they contribute.
2. Tax relief on personal pension contributions. This relief is available, of course, to anyone who contributes to any pension scheme and is, in essence, funded from general taxation. It is perhaps worth noting the colossal benefit to the highest paid.
3. The employer’s contribution to the individual’s pension. The level of employer contributions is determined by individual pension fund actuaries and is recalculated every three years. The level of contribution varies across the country, and from authority to authority, but as an example, in 2008-09, the employer’s (i.e. taxpayer’s) contribution to the pension fund for each employee at Hampshire County Council was 18.1% of the employee’s gross pay. (The employer contribution increased to 18.6% in 2009-10 and will be 19.1% in 2010-11 and will then be reviewed to determine the rates for the following three years.)
4. The employer’s National Insurance Contribution (NIC). NIC is paid by most employed people and also by the employer. The amounts to be paid are determined based on current Government legislation. The LGPS is what is known as a contracted-out scheme meaning that members do not participate in the Second State Pension (S2P – previously known as the State Earnings Related Pension Scheme or SERPS). Because the LGPS is a contracted-out scheme, both the employee and employer pay lower amounts of NIC than would be the case if they were contracted-in.
Visit the Isitfair web site at www.isitfair.co.uk
Sunday, August 2
by Christine on Sun 02 Aug 2009 11:30 PM BST
It's time to resolve the council tax problem
deepikasnv - Fri 23 Mar 2012 11:09 AM GMT
saima - Wed 21 Mar 2012 04:36 AM GMT
aberlebass - Tue 20 Mar 2012 02:26 AM GMT
wandybrad - Sun 18 Mar 2012 04:50 PM GMT
Christine - Sat 17 Mar 2012 06:46 PM GMT