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Tax and save

Tax and spend save

By now you’ll have seen that the proposed increase in Council Tax for 2010/11 is 2.5% here in Leeds. For those readers in work or receiving a pension, this may be a disappointing figure if you expect to receive no increase in your income this year. With inflation currently running high, many of us will feel poorer now than a couple of years ago.

Many people understandably think that Council Tax is the main element of funding for local government but this isn’t quite the case. In Leeds, in the roughest of terms, around half of the funding for the city comes from a ‘settlement’ from central government (coming out of our general taxation), a quarter from business premises rates and the final quarter from Council Tax. Councils also have income from fund raising powers; this includes everything from parking charges, planning application fees and leasing of buildings to private operators, such as Dine at The Mansion.

In Leeds, believe it or not, we are a relatively low charging city for Council Tax. If we lived in Nottingham we’d pay around £200 a year more to live in a typical band D property. In fact, out of the 8 major cities in England, referred to as “Core Cities”, we are the cheapest, bar one.

On top of this Leeds is somewhat hampered by the central government settlement which increases next year by just 1.8%, which at less than inflation is a cut in real terms. Liverpool gets a whopping £756 per person, per year in its settlement. We get £403 per person, per year here in Leeds. In fact, were we to get the same settlement as Liverpool, every 4 years or so we’d have an extra £1billion with which to cut Council Tax and improve services.

So why has Council Tax gone up again this year and how does this year compare? I remember a few years ago we had a 7.9% increase, albeit not under the current Conservative/Lib-Dem administration but 2.5% is a low increase in historical terms. The Council suffers from the same inflationary pressures as everyone else in terms of fuel we use and items we buy, but things are tough in other ways. Our income from sports centres and planning applications has dropped and we have also seen the end of some significant funding.

In the last few years some government funding provided for the poorest areas of the city has come to an end. We want to keep on with some of the more successful aspects of the work which have helped lift people out of poverty, but to plug that gap completely we’d need to find a full £14.9millon which has been cut. As a consequence we’ve had to find money from other areas to keep the very best aspects of these schemes going. In addition, adult social care costs have increased from around £120million in 2003/4, to over £200million this year as our population ages and demands for more personalised services increase.

So how much does a 2.5% Council Tax increase add to the pot to pay for all this? Well, I’m afraid it’s only around £6million. As you’ll see, in the grand scheme of things this doesn’t nearly cover all of he additional costs and the loss of income. So how do we balance the books? Well over the last couple of years we’ve made efficiency savings of just short of £60m, and much more before that.

It would be easy to simply cut our costs by cutting our services but we want to keep resurfacing the roads and to make sure we keep caring for the people who rely on the Council. You may or may not feel we’ve managed to trim costs in the right places but we have a duty to provide services almost regardless of the financial situation. I suspect coming years will be tougher still. This will no doubt lead to us looking for innovative solutions to problems to keep Council Tax increases low or, I hope, a zero increase in Leeds next year.

So I hope having read this you’re not too disappointed with the increase in Council Tax, it is certainly the lowest in a very, very long time but I assure you we’re not resting on our laurels.

All the best

Matthew Lobley

Roundhay Ward Conservative Councillor

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