Council Tax and other fun subjects
My Council Tax bill has just arrived this morning. Not that it brought any surprises since I was at the Budget Council meeting last month - the one when the Conservatives didn't appear to have read the proposals, and didn't offer any alternatives.
Ahead of that, I had been involved in discussions about the budget going back to last summer. I think it's worth explaining how the Council arrives at the figures.
Kingston Council gets its income from two main sources - a central government grant and Council Tax. The total budget for 2008-2009 is around £114 million.
The grant from central government for this year, known as the Revenue Support Grant, was the worst ever for a generation. It came to £36 million. That is just 31% of the total needed.
For reasons no-one seems to understand Kingston gets a far smaller grant than most other boroughs - the other outer London Boroughs get, on average, 50% of the amount they need to run their services from central government. This has been a constant complaint by all the political parties at Kingston.
That £36 million amounts to just £232 per resident. In comparison, Hammersmith and Fulham get £683 per resident, so it's no wonder they have been able to actually reduce Council Tax this year.
Now you might think that business rates would bring a lot of income into the Borough, given our thriving shopping centres, service industries and industrial estates. But in fact, all the business rates go into a central pool which is then redistributed across the country.
So although Kingston raises around £68 million in business rates, only £28 million of it comes back, tucked up in the Revenue Support Grant. This year £40 million of the rates generated by our healthy local economy has been transferred to less successful councils in the north of England.
Back to Council Tax. The rest of the £114 million in the budget has to be raised by Council Tax - a total of £78 million.
In fact, the costs have gone up by more than this, so the only way it can be kept even at that level is by making all sorts of savings. The Council has been through a painstaking process of reviewing many of the services it provides, looking for ways of investing in the services with top priority and being more efficient through combining resources across the board. Nevertheless, 115 jobs have been cut.
There is no relief on the horizon either, because Kingston has already been told that the central government grant is going to be even worse for the next two years.
The only (relatively) good news in all this is that Council Tax increase in Kingston has been kept below the level of inflation for the first time for very many years.
Tomorrow I'll write about ways in which you can reduce the amount of Council Tax that you have to pay.
Comments: 15
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Yes and we know who's got us into this dreadful mess in the first place by massive increases in previous years. Step forward Cllr. Reid and her colleagues!
Perhaps if you hadn't bludgeoned the resident in Kingston so early in your administration you wouldn't have got yourself into the dire situation you're attempting to dig yourself out of now.
What's interesting is if Kingston council received the same RSG as Hammersmith & Fulham would the Lib Dems attempt to reduce council tax or at least freeze it?
Not a chance....
PS - (I very much doubt this will published).
Will reply to your points later...
NEARLY £200 A MONTH TAX IS A LOT OF MONEY YOU NEED TO GET IN THE REAL WORLD AND REALISE WE DONT ALL EARN BIG SALARYS AND GET NICE ALLOWENCES.
ALSO I THOUGHT YOUR REPLY TO THE FIRST PERSONS COMMENTS WERE VERY RUDE REMEMBER WE ARE THE ONES WHO PUT YOU WHERE YOU ARE.
All the parties in Kingston agree that the RSG is unfair and that the Council has been put in an impossible position.
1999 was the first year of the last Conservative administration - they increased Council Tax by 12.67%, when the rate of inflation was only 1.5%. In subsequent years they increased it by 8.77%, 9.66% and a massive 11.93%. Now I haven't come out knocking them because they were in a similar position - squeezed by the Government who want to keep the headline Income Tax low, so pass the blame for increased taxation on to local government.
I'm sorry you thought I was being rude to the anonymous contributor - I did publish his comment this time. I have had to take a line of not accepting anonymous comments, because I think you might be surprised at the way some people choose to talk online - they write things that they would (I hope!) never say to me face to face. Anonymity seems to encourage people to behave in extraordinary ways.
Women are particularly vulnerable on the Web, and I am keen to encourage more women to use this medium, but we do need to be protected from some of the vile things that are to be found online.
But on your main comment - I totally agree with you that Council Tax is a grossly unfair form of taxation. It charges the same to people whatever their financial circumstances, based purely on the house they live in. That is why I would be very keen to introduce a local income tax, based on a person's ability to pay. This means that the wealthy (and there are quite a few on Kingston) would pay proportionately more and those on low incomes would pay very little. The current Council Tax system is a very unfair and unbalanced form of taxation.
''Liberal Democrat candidates will find it most difficult. The party’s alternative budget contained a series of tax cuts, including lifting the threshold for stamp duty and cutting road tax for smaller and cleaner vehicles, but also proposed several tax rises. The introduction of a local income tax would mean higher council tax bills for middle-class families.''
Kingston has many middle classes families. Indeed, the Liberal Democrats particularly in central Kingston and Surbiton rely heavily on middle class liberal voters staying with them and not opting for a rejuvenated Conservative Party.
The only answer to local taxation is to introduce a local service charge providing those on low and fixed incomes with greater choice whilst allowing local businesses the chance to flourish and prosper whilst the local economy benefits directly.
You dont take any of this in to account we have never taken any benefits off the state but that doesnt stop us getting taxed more as were easy prey working hard doesnt really pay off.
Even so, a local income tax would be based on income, just like normal income tax. It is fair - the more your income, the more you pay. If you are on a low income you pay very little or nothing (and you don't have to endure the indignity of applying for council tax benefit).
So wheres the incentive i came from a council estate and i have worked hard all my life and tried to pay my own way but by doing that i get higher tax am i missing something?
Council tax is not fair because everyone in a house in, say, Band E, pays the same whether they are on a fixed pension or a high salary. I think those on higher salaries should pay more than someone who is trying to manage on a pension.
''(a local service charge would) replace VAT and would be set by local authorities. It would encourage tax competition between local authorities and might be just what local democracy needs.''
This is a far better way of constructing local taxation than the present system and indeed your proposals for a local income tax.
The main problem with a sales tax in urban areas, where the borders between authorities are permeable, is that it separates the users of the local services from those who pay for them. This inevitably reduces accountability.
Regarding council tax weve just received a letter because we missed paying on the 1st of the month, we find it hard to pay on the 1st as we dont get paid the same time each month, but when asking your council tax people if we can pay later in the month, they are not bothered just want the money the 1st of each month or if we get 3 strikes they will take court action.
Welcome to the caring council
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