Post by Roger HayterOn 13 Nov 2024 at 14:42:26 GMT, "Mark Goodge"
Post by Mark GoodgePost by JNugentWhat next, a reduction of the State Pension weekly amount, on the
equally false basis that it is sufficient or even over-adequate?
If you really want to know what's next, I suspect there was a hint of it in
PMQs today. The leader of the opposition asked the PM whether he was
planning to increase the 5% cap on council tax rises. Rather than give a
straight answer either way, he simply replied "On the question of council
tax, she knows what the arrangements are".
I have a feeling that what's going to happen is that the government is
planning to cut funding to local authorities (indeed, they've already
declined to renew one tranche of funding which previously supported services
for victims of domestic abuse), and then remove the 5% cap on council tax
rises - effectively forcing councils to choose between making cuts or
significantly increasing tax in order to avoid running out of money (and,
with my cynical hat on, I suspect that the forthcoming funding announcement
will deliberately defund Conservative and Lib Dem run councils while bailing
out Labour run ones).
I am prepared to believe they would like to do that, but is the system set up
to actually make that feasible? Conservative areas seem to have a
significantly larger tax base per capita, though causation here may be the
other way round.
Yes, it is feasible to do that. At least, it's not feasible to specifically
discriminate between councils with different ruling parties. But it is
feasible to tweak the funding rules in order to give more to councils with
certain demographic characteristics, which is often a very reliable proxy
for political control.
Post by Roger HayterI suppose in the long run there might be a way to do it, but it would probably
involve extra money for inner cities, which they are not in a position to
provide at the moment.
That's actually precisely how it's likely to be done. And the money to
provide extra for inner city councils will come from reducing funding for
rural, suburban and non-metropolitan borough councils. The local government
minister has said that they plan to focus on "aligning funding with
deprivation levels", which is effectively code for shifting funding to inner
cities and away from everywhere else.
On the face of it, it sounds like a good thing to increase funding for
councils in more deprived areas. But the problem with that is that
deprivation doesn't actually correlate all that much with councils'
unavoidable expenditure on statutory obligations. There are costs associated
with higher levels of deprivation, but they're not as significant as it
might appear. And, in particular, higher levels of deprivation don't
significantly inflate a council's statutory obligations, and therefore lower
levels of deprivation don't reduce them. Spending money on addressing
deprivation is, obviojusly, a good thing, but almost all of the money spent
on it comes out of councils' discretionary funding rather than that which
they are legally obliged to spend.
Bin collections, for example - which must, by law, be free to domestic
households - are the biggest expense of lower tier councils, and are more
expensive to operate in rural areas because the bin lorries have to cover a
wider area. Similarly, rural shire counties have higher per-capita highway
costs than urban unitary councils. And the biggest costs of upper tier local
authorities - social services - don't correlate at all with deprivation. In
fact, the highest adult social care costs are incurred by councils with a
higher than average proportion of older people, which tend to be more rural
and coastal - the places that people move to when they retire.
You can argue that councils in less deprived areas have residents who are
more able to cope with a hefty tax increase, which is probably at least
partly true. But an increase is still an increase, and a council tax
increase will impact "working people", however that's currently being
defined.
Mark