Oral answer (Lords) on Council Tax- Mar 14

To ask Her Majesty’s Government what assessment they have made of the levels of council tax in England that have been announced for 2019–20.

My Lords, decisions on council tax levels are for local authorities, although the Government maintain referendum thresholds to allow voters in England to have the final say on any excessive increases. Authorities have set their council tax for the next financial year, and on 27 March the Government will publish the national statistics.

My Lords, it is amazing that most councils set it at the level set by the Government. Is it not the case that council tax levels in England are coming out at an average 4.5% increase? I declare an interest as a borough councillor in Colne, where the increase is 6% across the board. Local authorities are being hollowed out, their services are being slashed and in many areas they are teetering on the edge of an existential crisis. Will the Conservative Party go to the elections this year and tell people: “Vote Conservative—get less, pay more”?

My Lords, when the national statistics are published, the calculation is almost certainly going to be that the level is 4.8%, but we cannot be absolutely certain about that. Of course, local authorities have the option of going to their electorate and seeking a higher level of council tax. The fact that they do not is indicative of the fact that they know what the result would be.

My Lords, I draw the attention of the House to my relevant interest as a vice-president of the LGA. Can the Minister explain to the House the policy idea behind shifting the burden of local government funding further from central government and more on to the council tax payer?

My Lords, as the noble Lord will know, the Government are looking at the fair funding formula at the moment—I am trailing the next Question—but that does not transfer a burden; it ensures that we have equity across the piece. It does not make the cake any larger; it ensures that there is fairness, as the noble Lord will know. The levels of council tax contributing to local authorities vary enormously: 84% in Surrey and Buckinghamshire; 20% in the City of London. We are not seeking to address that. Although it may look innately unfair, closer attention will show that it is not.

Can the Minister explain to me, because I have never understood it, why the council tax payable on a property outside London—I am talking about a small family home we have had for many years in Oxfordshire—is more than twice that in Westminster, in London?

My Lords, without knowing the particular circumstances that my noble friend refers to, I once again say that the fair funding formula will look at this and will seek to address any innate unfairness that exists between different authorities. Even within London there are massive differences.

My Lords, will the Minister keep very much in mind the difficulties that local authorities have in meeting the needs of hard-working, low-income families through essential support for their children to do well? Will he seek to look again at what can be done to support these families; for instance, by investing and making a further commitment to the troubled families initiative, which has been so beneficial?

My Lords, I very much agree with the noble Earl about the troubled families programme. It is a good programme, as he rightly says. In looking at resources and needs, we are seeking to ensure that across the board there is fairness. That is why it is a fair funding formula. That is something that will be forthcoming in 2020.

Is one of the reasons why council tax is so low in Westminster the fact that it has huge parking revenues gained from people coming into London from all over the country?

My Lords, the noble Lord raises a relevant factor about parking revenues, not simply in Westminster, as it is true in other parts of London and in other cities. It is being considered in the fair funding review, which is the subject of the next Question.

My Lords, I declare my interest as a vice-president of the Local Government Association and an ex-leader of Westminster Council. Does my noble friend agree that this goes far deeper than parking revenues, which have to be ring-fenced for spending on roads? Westminster has low council tax because it is extremely efficient. It also has 1 million visitors a day, for which it receives no revenue from government, and the cost far exceeds parking revenues. Council tax in Westminster is about half—I am not sure of the exact figures—that in Camden and Brent, despite the fact that Westminster has four of the most deprived wards in the country.

My Lords, my noble friend packs a powerful punch for Westminster, but I have no desire to get dragged into a discussion of the relative merits of all the local authorities in England or more widely. That is being looked at in the review.

My Lords, will the Minister explain something that has long puzzled me? I ran the London Food Board for many years and in that time I found that only five boroughs in London supplied meals on wheels. That was because of council cutbacks. Councils said they could not afford to do it, and older people tended not to complain. The consequence was that councils saved, let us say, £15 a day, and people ended up in high-dependency beds from which they could not return. The saving made by the council was transferred to the NHS. Surely this is crazy.

The noble Baroness refers to a very valuable service which I happily endorse. I agree with the point she makes about the cost elsewhere if such a service is not provided. No doubt that is something that should be borne in mind by local authorities and more widely.

My Lords, as a result of government policy, councils which have social services responsibilities have had to raise their council tax by 18% over the past four years. Does the Minister know of any employees who have had an 18% pay rise in that period? If not, are they still the hard-pressed council tax payers whom the Conservatives love to talk about?

My Lords, the noble Baroness should know that the level of council tax increases since 2010 has been lower than the rate of inflation judged by CPI. That was not the case in the previous decade. I think the noble Baroness should look at those figures.

Does the Minister know that there is one part of the United Kingdom where council tax cuts have been even greater than in England? It is in Scotland, where the SNP has imposed swingeing cuts, far greater than in England, on local councils. What message does the Minister have for Nicola Sturgeon?

Oh!

My Lords, I suspect this is one of the few topics where the noble Lord and I will be in total agreement. I very much endorse the spirit of the question he asked and will gladly discuss with him later what we can do.