The super-rich turn out to be mean – imagine that!

“Just 350 of the 15,600 wealthiest households in Westminster, one of the country’s richest boroughs, have answered the local authority’s call to voluntarily pay extra council tax to help tackle the homelessness crisis in the heart of London.

In February, the Westminster council leader, Nickie Aiken, wrote to all residents in the most expensive band H properties to ask them to consider paying an extra £833-a-year “community contribution” to help fund youth clubs, homelessness services and visits to lonely people.

But only 2% of the households have stepped forward to help their poorer neighbours, the Guardian can reveal. Those asked to consider making an extra contribution include the residents of the Candy brothers’ luxurious One Hyde Park apartment complex in Knightsbridge and those living in hundreds of multimillion-pound mansions in Mayfair, Belgravia and Maida Vale.

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Residents in Westminster pay the lowest council tax in the country, with band H payments of £832 a year plus another £588 to the Greater London Authority. In Poole, Dorset, the band H charge is £3,358.

While very few of Westminster’s wealthiest residents have answered the council’s plea for help in maintaining essential services, they are paying tens of thousands of pounds a year in service charges to maintain their luxury buildings. The service charge on a £6m one-bedroom apartment in One Hyde Park comes in at more than £22,000 a year. The most expensive flat in the development was sold to the Ukrainian billionaire Rinat Akhmetov for £135m in 2011.

Aiken said she introduced the voluntary contribution scheme following “a growing number of requests from some residents who live in the highest valued homes that they wanted to voluntarily contribute more than their existing council tax”.

The council said that in a pilot consultation more than 400 people responded positively to the survey saying they would support the scheme. But it appears that many may have failed to follow through on their initial enthusiasm. “The outcome of our consultation reflects the kind and generous spirit of Westminster residents,” Aiken said in February. “It also confirmed what I had heard from people I had met on the doorstep that those in the more expensive homes are willing to contribute more to community projects. The scheme is most popular among residents of the most expensive homes.”

However, four months down the line, Aiken said just 350 households had contributed a total of £342,000. The biggest single donation was £2,500. “This scheme had its cynics, but the number of contributions we have had are proof that an innovative idea like this one can make a difference,” she said. …”

https://www.theguardian.com/money/2018/may/13/westminster-wealthiest-households-failing-pay-extra-tax-community-contribution

“Trying to maximise income purely from commercial revenues is NOT what the public want.”

CIPFA chief executive Rob Whiteman has told a conference this morning”

“… At some point in the next 15 – 20 years local government needs to be reorganised. We need to be aware reorganisation would be a good thing.”

But he predicted there was unlikely to be “any meaningful local government reform” for some time.

Local government must rebuild trust with the public, Whiteman told his audience. “In its present form, local government is not perfect.

“I do not think that trying to maximise income purely from commercial revenues is what the public want.”

Don Peebles, head of CIPFA UK policy and technical, echoed this, suggesting local government’s commercial investments should be more about keeping council finances afloat rather than maximising profit.

He said recent changes to the prudential code – the statutory guidance for local government on borrowing and investments – reflected that “the priority is not maximisation of return but the protection of capital”. …”

https://www.publicfinance.co.uk/news/2018/05/local-government-uncertain-place-10-years

Council borrowing so high, government intervention may be needed

EDDC is borrowing to fund the building of its new HQ and to fund its “Growth Point” and is also considering going into the housing construction market.

“Local authorities could face further intervention by central government if new changes to investment and treasury codes fail to dampen council borrowing levels, according to a senior Whitehall official. …

[A conference speaker said] … “said: “When last year local authorities borrowed an additional £3.8bn, that was a £3.8bn increase in net debt. “That was £3.8bn less that the chancellor had available to distribute as funding across the board at the last budget. “So, local authority borrowing does have a real world impact in the overall quantum of funding that is available to government.”

In addition, he said that concerns have been raised that councils investing in particular asset classes can drive prices up, creating a bubble.

New principles on proportionality included in the code were triggered by some smaller authorities taking on huge sums of debt relative to their size, Caller [the speaker] added.

“We had concerns that those authorities who were doing that were effectively assuming that government stood behind their risk. “That is not the statutory position, and it is not a position we want to encourage. “What the legislation says is that effectively it is council tax payers that have to make good any deficit in those assumptions, not central government. We want people to remember that.” …

http://www.room151.co.uk/treasury/councils-could-face-additional-intervention-if-borrowing-rates-continue/

“Scrap ‘highly regressive’ council tax, says thinktank”

“Council tax is an outdated and regressive levy on households that should be scrapped in favour of a progressive levy on property, according to a report by the Resolution Foundation.

The thinktank said council tax had become almost flat-rated in some areas to leave it resembling the much maligned poll tax of the early 1990s.

Someone living in a property worth £100,000 pays around five times as much council tax relative to property value as someone living in a property worth £1m. This is exactly the kind of result that opponents of the poll tax wanted to avoid and in stark contrast to income tax, which increases with incomes in a progressive way so higher earners pay a higher average tax rate,” she said.

There are eight council tax bands that determine annual charges. All the bands are based on 1991 property prices following the failure of successive governments to sanction revaluations.

The highest band (H) is for homes valued at £320,000 and above, despite the average London houseprice now being more than £480,000. Purbeck district council in Dorset will charge band H homes £3,747 from April while Wandsworth council in London, which hosts some of the most valuable homes in the UK, will charge £1,433.

The foundation said ministers should consider replicating the 2017 reforms implemented in Scotland across England and Wales, which involved increasing council tax rates in the top four bands and generated a little over £1bn.

An alternative reform would be a “mansion tax” surcharge of 1% on the value of properties worth more than £2m and 2% on the value of properties above £3m, which would also generate just over £1bn.

A broader overhaul could involve a switch to a 0.5% charge on all properties that would result in a £100,000 home in Newcastle being charged £500 a year and a similar sized £1m home in London charged £5,000 – a £3,000 increase on current charges. …”

https://www.theguardian.com/money/2018/mar/20/scrap-highly-regressive-council-tax-says-thinktank

Last legs for Thelma Hulbert gallery?

Owl says: The gallery, in Honiton, has swallowed up around £500,000 of our council tax money over the last few years. Could The Beehive (also a gobbler of funds in the past) perhaps house the gallery’s art and activities?

Or, here’s a thought: display it in the new £10 million HQ currently under construction in Honiton!

“Unprecedented increases in council tax starting in April will not offset cuts to services including children’s centres and libraries, local authorities have warned.

The Local Government Association (LGA) said councils in England would raise an estimated £1.1bn through higher council taxes in 2017-18, but this would not cover the £1.4bn lost through cuts to central government funding plus the higher wage bill of £1bn.

Nearly half of English councils with responsibility for providing social care for adults and children will increase council tax by the maximum 5.99% allowed – 2.99% for general council tax plus a further levy of up to 3% to pay for the care of older and disabled adults – but this will not prevent further cuts to services, according to the LGA.

Councils will continue to reduce or close services such as children’s centres, libraries, leisure centres, parks, museums and road repairs to plug growing gaps in adult and children’s social care and homelessness services, it says.

The widespread emergence of what some councillors have dubbed “pay more, get less” budget settlements comes as town halls struggle to balance the books after years of cuts in core government funding.

Northamptonshire county council effectively declared itself bankrupt earlier this month after admitting that rising costs and shrinking income made it unable to set a legal budget.

The council must set out revised plans for cuts at a meeting this week after an auditors report warned that its existing proposed budget plans were “not credibly achievable”.

Northamptonshire’s predicament highlights how councils are increasingly reliant on one-off measures such as dipping into reserves, or selling buildings and land, to meet the spiralling cost of social care. Those pressures are being compounded in some cases by the failure to deliver savings with existing cuts.

The LGA said 147 of the 152 English authorities that provide social care services would levy a 3% council tax precept from April to raise extra cash for the care of older and disabled adults. Although this will raise an extra £548m, it will be wiped out by the cost of meeting the national minimum wage.

These councils face additional costs estimated to be at least £400m over the next 12 months as result of a legal judgement that requires care employers to pay the minimum wage to carers working sleep-in shifts, backdated for six years.

Out of the 152 “social care” authorities, 108 also plan to increase general council tax by between 2.95% and the maximum 2.99% allowed. This will raise an estimated £548m. Five councils have said they will freeze council tax for 2018-19. …

… A spokesman for the Department of Housing, Communities and Local Government said: “As part of our finance settlement, we are delivering a real-terms increase in resources to councils over the next two years, more freedom and fairness, and greater certainty to plan and secure value for money.

“We want to work with local government to develop a new funding system for the future and encourage councils to submit responses to the review currently under way.”

England’s councils have experienced a 40% cut in central government funding since the start of the decade and face a £5bn funding gap by 2020.

The Local Government Information Unit thinktank warned this month that many English local authorities were teetering on the edge of financial crisis.”

https://www.theguardian.com/society/2018/feb/26/council-tax-hikes-will-not-stop-cuts-to-local-services-authorities-warn

“Extra council tax income in 2018/19 will not protect under-pressure local services”

“Communities across the country will see many of their local services face further reductions this year despite paying more council tax, the Local Government Association warns today. …

With local government facing an overall funding gap that will exceed £5 billion by 2020, the LGA is warning these council tax rises will not prevent the need for continued cutbacks to all local services this year. Councils will also have to continue to divert ever-dwindling resources from other local services, including filling potholes, maintaining our parks and green spaces and running children’s centres, leisure centres and libraries, to try and plug growing funding gaps in adult social care, children’s services and homelessness support.

The LGA said the Government needs to urgently address the growing funding gaps facing local services and provide the financial sustainability and certainty needed to protect the local services our communities rely on by committing to allow local government as a whole to keep every penny of business rates collected.

LGA Chairman Lord Porter said

“Since 2010, council tax bills have risen by less than inflation and other key household bills. But faced with severe funding pressures, many councils feel they are being left with little choice but to ask residents to pay more to help them try and protect their local services.

“The extra income this year will help offset some of the financial pressures they face but the reality is that many councils are now beyond the point where council tax income can be expected to plug the growing funding gaps they face. Extra social care funding will be wiped out by the significant cost pressures of paying for the Government’s National Living Wage and extra general council tax income will only replace a third of the central government funding they will lose this year.

“This means councils will have to continue to cutback services or stop some altogether to plug funding gaps.

“We have repeatedly warned of the serious consequences of funding pressures facing services caring for the elderly and disabled, protecting children and tackling homelessness for the people that rely on them and the financial sustainability of other services councils provide. It is unfair to shift the burden of tackling a national crisis onto councils and their residents.

“The need for adequate funding for local government is urgent. To maximise the potential of local government and protect local services from further cuts, funding gaps must be properly addressed and local government as a whole must be allowed to keep all of the business rates it collects locally each year to put it on a sustainable footing.”

https://www.local.gov.uk/about/news/extra-council-tax-income-201819-will-not-protect-under-pressure-local-services

DCC vote more cuts to keep reserves

Claire Wright and other independent councillors tried to persuade DCC to fund services rather than add to reserves – Tories voted to keep reserves.

From Claire Wright’s blig:

“… Over £155m worth of cuts have now been made to Devon County Council by central government, since austerity began in 2010. That’s around 80 per cent of the council’s core funding… gone…. …

It emerged in the past week that an extra £5m will be squirrelled away in Devon’s reserves, in case of financial difficulty.
But vital services are being relentlessly cut – for the EIGHTH year running – council tax is rocketing and the county’s people are suffering.

With council tax rising by 20 per cent in just seven years. That’s £250 for an average band D property, while wages stagnate – Devon’s residents (and people all over the country) are being ripped off by a Conservative government that claims to be a government of low taxation.

– 30 health visitor posts are to be cut which will hit families that most need support, especially those with babies and young children. The Independent Group is proposing that part of the £5m is used to prevent those losses

– Foster carers who look after the most damaged and challenging children could lose around £100 a week to foster carers who look after less damaged less challenging children.

This income cut is in addition to earlier cuts in allowances over recent years. The result of these cuts could see experienced dedicated foster carers struggle to make ends meet and be forced to leave. It is causing much anxiety … and ultimately it will be the children who suffer. The Independent Group is proposing that part of the £5m is used to shore up the income of foster carers

– The schools counselling service is set to be lost at a time when anxiety and depression among young people is soaring and when many are now being forced to PAY for their own counselling sessions. The Independent Group is proposing that part of the £5m is used to ensure this essential service continues

– People in Devon’s towns and villages are falling over dangerous paving stones every day. The Independent Group is proposing that part of the £5m is spent on making far more pavements safer, especially for elderly people who are most likely to hurt themselves and end up in hospital

And what of Devon’s MPs, especially the Conservative MPs, who ALWAYS toe the party line on cuts to our council budgets, despite requests each year from the leader of this council to stand up for the people of Devon?

Well this year, guess what? It’s no different. All Conservative MPs who were present in the chamber last week voted in favour of yet more suffering. …”

http://www.claire-wright.org/index.php/post/20m_of_devon_service_cuts_voted_through_as_council_tax_rises_by_around_five