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Tuesday 9 December 2014

Council Tax Rises in Brent

Following yesterday's post on the Brent Council Budget, I thought it worth going over Council Tax rises again.  Effectively, the Council can raise Council Tax by not more than 2%.  For some time, this has been frozen, although my experience is that residents haven't really noticed that.  Personally, I think that the Council Tax should be raised by just below the 2% rate that would trigger a referendum.  Here is why:

  • Firstly, a 2% rise is less than the rate of inflation, after a five year freeze.  Compare that to any other charge, and it is a very modest increase.  The Council has a policy with fees & charges in general of raising them by the rate of inflation each year.  Why should Council Tax be different?
  • Secondly, the implementation of a Council Tax Support Scheme has led to Council Tax rise for the poorest c.20,000 households in Brent.  No one wanted to do this, but the alternative was accepting a further c. £5 million in cuts.  In what sense is it fair to raise Council Tax for the poorest but not for taxpayers in general?
  • Thirdly, I have explained before that freezing the Council Tax effectively locks the Council into further cuts each year as the tax base is eroded.  Effectively, continually freezing the Council Tax means that the Council is digging its own financial grave.  At some point in the not too distant future, this will lead to major service breakdowns.
  • Fourthly, if people don't think that they are getting a freeze (which the Council's own consultation show that they don't) what is the political dividend of giving them one?
A 2% rise would add £1.6 million in revenue to the base budget, but that gain would be permanent for each year, just as the refusal to raise Council Tax creates more cuts each year.

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