Copied from the MJ on line
Lifting the council tax cap is just passing the buck
By Heather Jameson | 18 December 2017
The Scottish Budget does not bode well for local government – on both sides of the border.
Finance secretary Derek MacKay’s decision to use his tax raising powers to pay for public services may herald a welcome shift towards ending austerity. However, the Scottish local government finance settlement also included the presumption that councils would do the same.
Without a double whammy of income tax rises, and council tax increases, taxpayers north of the border are set to feel the pinch.
And so we wait for the English settlement – delayed, we have been assured, due to communities secretary fighting for a good deal for the sector.
It seems unlikely there will be anything extra for adult social care as we wait for the green paper – although there may be measures to ease the rising pressures on children’s services. We can also expect an extension of transition grants. In the absence of a plan for fair funding and full business rate retention, a fiscal fudge may be the only option.
But the coffers are empty – there is no cash handout on the horizon. Last time round the gap was plugged with the adult social care precept. This time round, we could see the government lift the cap on council tax rises.
Is it a win for local government? Freeing councils from central government interference has got to be a good thing. Democratically elected councillors have every right to choose their own levels of taxation.
However, failing to fund local government and letting councils take the flack for raising taxes is passing the political buck. This is not giving councils the choice to raise taxes – it is forcing their hand.
Finance settlement offers no lifeline to the struggling sector
By Heather Jameson | 19 December 2017
Watching the local government finance settlement after last month’s budget, it is fair to say the Government can be commended for its consistency. It has consistently failed to address the financial crisis facing local government.
There are some positives. Easing the council tax referendum threshold gives local government a modicum more control over its own destiny. A three percent increase puts council tax broadly in line with inflation – assuming you ignore the social care precept, which taxpayers will not.
And the extension of business rate pilots will be welcomed in the lucky areas bestowed with the gift. A pledge to shift to 75% business rate retention is also a good move – and as far as Sajid Javid could go without legislation.
Promises to review the funding system and maintain New Homes Bonus are also likely to play well with the sector.
There is an extra £13m for struggling Northamptonshire, Mr Javid told Parliament – mentioned with the aside that he would listen to any reorganisation proposals put forward. Does this mean if you truly fail, government will come in and pick up the pieces?
However, council tax measures will raise around £250m – at different levels across the country – compared with the £2bn needed. Adult social care is in crisis, with a green paper planned for the summer – and a solution even further away.
Children’s services are increasingly becoming a concern and the settlement failed to find a solution there. Councils remain on a precipice, and the draft settlement provides very little in terms of a safety net.
Two years ago, MP’s threatened to vote against the settlement – could we see the same thing happen again? With some of the main protagonists handed business rate deals, Sajid Javid may have done enough to keep the sector quiet – but not enough to send a lifeline to the sector.