COUNCIL TAX

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Households face a £50 rise in their council tax bills as the recession has left councils with a £900 million black hole. Historically low interest rates mean councils investments of £25 billion will earn just £400 million this year compared with an expected £1.26 billion. The shortfalls could be passed onto households with a £50 rise in average Council Tax bills, according to the Lib Dems, which discovered the figures. Julia Goldsworthy, Lib Dem Local Government Secretary, said it will put more pressure on people paying already high Council Tax.

She said, “Many families are struggling to pay the bills and any increase in the Council Tax could be a burden too far. The economic crisis is hitting household and council budgets from every angle. The real problem here is that the Council Tax hits those who can least afford it, like pensioners, the most. Because of this unfair system, any attempt to protect local services from cuts through Council Tax rises will put more and more pressure on low income households.”

The Local Government Association said the recession was forcing councils to take a look at almost every aspect of their finances. A spokesman for the LGA said, “Almost 7,000 jobs have gone in the last six months alone and as the effects of the recession continue to be felt, we fully expect councils to keep on cutting jobs over the course of the next twelve months. Despite this, local government has delivered the lowest council tax rise for over a decade and is continuing to make big efficiency savings.” (Source: Daily Telegraph, Aug/09)

Under new powers to be handed by Ministers to local councils, town halls will soon be able to break into people’s homes, seize their goods and put them on credit blacklists if they cannot pay their council tax. At present they can only send in bailiffs if the householder agrees to help pay off his debts. Now, for the first time, councils will be able to get a county court order to blacklist debtors and snatch their assets. Unpaid student loans, council tax arrears and utility bills will now all be included in credit ratings. (Source: News of the World, Jan/09)

Council tax in Derby is to be increased by 4.9%. Derbyshire Police Authority announced it would increase its share of the tax bill by the maximum 5% and Derbyshire Fire Authority is expected to confirm it will do the same, partly to help pay for replacement fire stations to be built. The increase in council tax is more than double last year's 2.4% rise and will mean the majority of residents, who live in Band A properties, will pay a total of £811.22 next year compared to £772.97 they are paying now.

Chris Williamson, the leader of the council, said he was pleased the council had managed to keep its rise below 5% and said, "It's been tough putting together a budget which maintains services but does not unfairly charge the people of the city, and we're delighted to have achieved that. Included in that budget is our commitment to continue to invest in Derby to give us a city centre that the people can be proud of."

Despite the rise, the council plans to cut its budget by 10% by April 2010, starting next year when it proposes £5m of savings. Job cuts, axing grants to organisations, increasing the cost of meals on wheels and charges at day centres, and raising ticket prices at the Assembly Rooms and the Guildhall are among the proposals to save money. (Source: Derby Evening Telegraph, Feb/07)

Derby City Council announced a 6.25% increase in council tax with the total rise bringing in an extra £3m on the £60m received in 2003. The city council says the extra money will go towards covering a £3m deficit in social services and it will mean for an average band D property, the city council's part of the tax bill will now be £903.82. The council's ruling Liberal Democrat/ Conservative alliance said the rise would help to fund a plan to spend £1m on improving social services. Derby City Council Leader Maurice Burgess insisted most of the changes were forced on them.

He said, "The reasons why the budgets have gone up is social services. Much of what we are having to do with social services is central government led." But Chris Williamson, from the council's Labour group, said, "Not only are we seeing an increase in the council tax, we are seeing cuts in essential services. Charges for services such as the home care provision for the elderly and disabled people have been tripled. In my view there is no justification for this rise." Does anyone really believe Labour would have done things any differently?

Derbyshire police announced another inflation-busting 11% rise in its precept. This will mean a rise of £42 a year for the majority of Derby's households in 2004-5 after Derbyshire Police Authority, which sets the force budget, revealed its proposed levy. The police authority receives part of its budget by setting a council tax precept, as will Derbyshire Fire Authority for the first time. An 11% rise in the police precept will see the contribution of a Band A property to Derbyshire police increase from £74.51 in 2003-4 to £82.71 in 2004-5.

The fire authority precept is expected to be set at about £34 for a Band A property in 2004-5. This is up from about £28 last year, when the fire service's precept was levied by the city council. All this is on top of a 4.9% rise which was set out by Derby City Council, which will see a Band A property's contribution rise from £574.22 to £602.55. In summary, the total council tax bill for a Band A property will be £719.26 for 2004-5, up 6.2% from £677.06 in 2003-4. But the rise is lower than the 9.3% increase which was inflicted on householders in 2003, when the city council raised tax by 8%, while the police precept rose by 21.5%.

Maurice Burgess, Liberal Democrat leader of the council, said, "We think this is a fair and reasonable increase and we have achieved this without any serious loss of services." The extra money will provide £450,000 of investment in footpaths and pavements, 82 additional dog bins, a £150,000 blitz on graffiti, £150,000 to be spent on youth facilities and £150,000 to provide better disabled access to council buildings. The rise will also allow the council to put an extra £70,000 into its events budget, ensuring the future of the popular Darley Park concert and Markeaton Park fireworks display.

Conservative councilor Philip Hickson, deputy leader of the council, said he was "aggrieved" by the increased police and fire precepts. A report to a Derbyshire Police Authority meeting states the rise will provide revenue of £2.2m to be spent on extra 22 police officers, whose exact responsibilities are not yet known, 29 operational staff and nine support services staff. Derbyshire Constabulary refused to comment on its proposed budget. But if we're expected to pay the increased cost then surely we should be told how it's going to be spent?

People who make substantial home improvements, such as loft conversions, may face higher council tax bills. The government's Valuation Office Agency (VOA) has confirmed that home improvements could push property into higher tax bands during council tax revaluation. Previously, improvements only affected tax bands when the property was sold. A VOA spokesman said that only substantial improvements were likely to force a property into a higher council tax band and that small everyday home improvements, such as building a garden shed, were unlikely to increase the value of a property by enough to push it into a higher council tax band.

But the Conservatives, predictably, said the plan was another example of a government stealth tax (which of course, the Tories would never do). Shadow Secretary for local government, Caroline Spelman said, "Hard-working families and pensioners who have spent time and money on renovating their home will be hardest hit. Armies of clipboard inspectors will be descending on every town in England to inspect people's homes to justify whacking up their council tax bills." The revaluation process could involve valuation office inspectors entering people's homes to ascertain the value of home improvements, the VOA said. (Source: BBC News)