Coun­cil tax band shake- up ap­peal to plug £ 5bn hole

Daily Express - - NEWS - By Ge­orge Ryan

COUN­CIL tax bands must be re­viewed to help plug the £ 5bil­lion fund­ing gap lo­cal au­thor­i­ties face, MPs say.

They are sug­gest­ing new cat­e­gories at the top and bottom of the scale in a “long over­due” over­haul.

It comes amid claims pub­lic ser­vices are at break­ing point be­cause of fund­ing cuts, changes to the way cash is raised lo­cally and re­stric­tions on in­creas­ing coun­cil tax.

Clive Betts, who heads the Hous­ing, Com­mu­ni­ties and Lo­cal Gov­ern­ment Com­mit­tee, urged the Gov­ern­ment to “get real”.

He said: “There is a dis­con­nect be­tween the ser­vices tax­pay­ers ex­pect their lo­cal au­thor­i­ties to pro­vide and the level of ser­vice pos­si­ble un­der cur­rent Gov­ern­ment fund­ing.”

Dra­matic

MPs on the com­mit­tee are also de­mand­ing a review of the coun­cil tax sys­tem, which they called a “re­gres­sive tax dis­con­nected from the true value of prop­er­ties”.

In a re­port on lo­cal au­thor­ity fi­nances, they said: “A review should con­sider the case for creat­ing new tax bands at the top and bottom of the scale.

“Any changes should be im­ple­mented with­out dra­matic in­creases for in­di­vid­ual house­holds and be rev­enue neu­tral at a na­tional level. How­ever, they must pro­duce a pro­gres­sive tax sys­tem in the long term.” The re­port also said a busi­ness rate re­ten­tion scheme for au­thor­i­ties “lacks trans­parency”.

MPs say it is too com­pli­cated, try­ing to pro­mote de­vel­op­ment while re­bal­anc­ing fund­ing.

Labour MP Mr Betts added: “Tax­pay­ers are shelling out more but get­ting less. This comes at a cost to con­tin­ued con­fi­dence in lo­cal au­thor­i­ties to pro­vide the ser­vices they need. Democ­racy and ac­count­abil­ity in lo­cal gov­ern­ment is pay­ing the price for cen­tral gov­ern­ment spend­ing de­ci­sions.

“The Gov­ern­ment has a duty to es­tab­lish a fund­ing set­tle­ment that en­ables lo­cal au­thor­i­ties to pro­vide ser­vices to meet the needs of their lo­cal com­mu­ni­ties.

“Over the last decade, we have seen a reg­u­lar chip­ping away at fund­ing while adding fur­ther statu­tory obli­ga­tions for them to meet. This con­stant stress on lo­cal gov­ern­ment is now com­pounded by a fail­ure to even set out how much money they will be al­lo­cated in the next fi­nan­cial year.”

The Lo­cal Gov­ern­ment As­so­ci­a­tion es­ti­mates there is an an­nual £ 5mil­lion black hole in fund­ing.

Chair­man James Jamieson said the Chan­cel­lor should en­sure coun­cils are well funded in his next spend­ing review.

He said: “Only with the right fund­ing and pow­ers can coun­cils meet their le­gal du­ties and pro­tect the range of other val­ued lo­cal ser­vices which make a pos­i­tive dif­fer­ence to com­mu­ni­ties and peo­ple’s lives.”

The re­port also noted that ris­ing so­cial care de­mands are plac­ing an in­tol­er­a­ble fi­nan­cial bur­den on lo­cal au­thor­i­ties, with the sys­tem on “verge of collapse”.

It also high­lighted that money for trans­port, cul­ture, hous­ing and plan­ning has been cut by more than 40 per cent.

‘ Tax­pay­ers are shelling out more but get­ting less ... we’ve seen a reg­u­lar chip­ping away at fund­ing’

Labour’s Clive Betts

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