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 England.

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) (England) Regulations 2007 the right model for organising and administering council tax 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 Scotland – based on the number of spoilt papers). We also believe that the electorate would be more likely to make an informed choice if the ballot papers were to be directly associated with the Council Tax bill as we propose above.

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.

General Comments

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




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