Tory councils to blame for hidden charges, not government

Caroline Spelman, Conservative Local Government shadow, has sought to blame Tory local council tax rises on Whitehall - even though they are set locally.

Shadow Secretary of State for Local Government Caroline Spelman has again sought to divert the media gaze away from more serious examination of Conservative Town Hall ‘stealth taxes’ by blaming central government, rather than the decisions of her own councils.

Speaking at the New Local Government Network yesterday, Spelman said:

“I think people are coming to the end of their tether with direct and indirect tax-raising measures. Last year the Audit Commission found that the average family is paying £1,190 on charges for Town Hall services. The origin of this lies in Whitehall.

“In articles and speeches the Government has called on councils to charge for more services and has expressed concern that councils are not doing enough to charge for services. But as households tighten their belts the Whitehall ratchet of taxing and charging has to slacken.

“Councils should not be coerced into putting up costs all the time simply to make ends meet.”

This accusation will be received with some bemusement by those who work to finance local government services. The level of fees and charges are almost entirely at the discretion of local authorities, not government rules. They currently make up around 20 per cent of local authority revenue each year and are an important source of income, paying for discretionary services.

They are levied across a wide range of services, from play centres through to library charges, music lessons and car parking. Typically a council will have over 1,000 such charges. Historically these were usually pegged to inflation – but often kept lower, at the discretion of the council, due to local social or community factors.

Where there has been a debate about fees and charges in the past, for example when councils were in danger of setting unreasonable council tax rates or failing to keep expenditure efficient or under control, fees and charges remain the preserve of the local council.

But an entirely different picture emerges if the record of Conservative councils is scrutinised. They have adopted an aggressive policy pushing up local government fees and charges whenever they have the chance to, a tactic used (in part) to disguise a ‘lower council tax’ policy.

London is a case in point, but there are examples elsewhere in the country. Behind the headline of low council tax settlements, it is Conservative-run councils who make up the balance by adjusting their fees. While this often hits the most vulnerable the hardest, it also has the knock-on effect of depressing demand – effectively running down a service.

  • The leader of the Tories’ flagship Wandsworth council, Edward Lister, has urged Tory councils to “increase charges as far as possible beyond inflation” and that fees should be used on a “trial and error approach” to test just how much residents will bear.
  • To much acclamation in Conservative circles, in north London, Barnet Council is forcing through a new model which charges residents once for their council tax and then asks them to pay an extra fee to jump the queue if they want a better or faster service.
  • In Hammersmith and Fulham residents’ parking charges have increased by 12.5 per cent, and children’s out-of-hours play service charges have risen by 121 per cent. The minimum increase across all council charges is 5 per cent. Meals-on-wheels prices rose by an incredible 40 per cent – adding £365 to annual food bills for the elderly.
  • Mayor Boris Johnson might pledge to keep the mayoral precept down, but he has raised the cost of travelling in London by up to 20 per cent with bus users suffering the hardest. A single pay-as-you-go bus ticket will rise to £1.20 with off-peak tube fares also rising by almost a fifth. The congestion charge, held at £8 since 2005, will also rise to £10, although this will not come in until the Western Extension is scrapped next year. All this, just one year after a similar above inflation hike.
  • And this also happens where the Conservatives share power, rather than have outright control. In Camden, the Conservative/Lib Dem administration set a budget putting up Meals on Wheels dinners for the elderly by 50p each (or nearly £300 a year for a couple); hiked up play-after-school and holiday-play schemes and even raised the cost of burying your child by over 15 per cent. Permission to park notices (for builders or removal vans outside your home) famously went up from £9 a day to £33 – a 267 per cent increase – hitting residents and small businesses.

But whether Conservative councils have raised their fees dramatically or incrementally, it is interesting to note that they were less willing to decrease them, even slightly, when the VAT cut came in. Camden, like neighbouring Westminster and other Conservative authorities, did nothing to pass on the VAT cut for ‘paid for’ services last year when they should be passing the benefit on to residents.

Of course, all councils should set rates for services as they consider appropriate and reflecting what they can afford. If Conservative or Lib Dem councils want to charge more for services, they can: that is localism. But they should also be straight with residents about how the shared burden of council tax is being shifted – by stealth – onto those who use council services.

If prices reach a tipping point, as they have in some boroughs, then it will naturally have an impact on demand. With fewer users, services become unaffordable in the eyes of the council – a justification for closure or the running down of a community service.

Raising ‘stealth taxes’ via fees and charges is ultimately a local choice. But under the Conservatives these they are happening locally, across the country.

Theo Blackwell is the opposition Finance spokesperson for Camden Council

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