Council Tax: Government’s Proposed Increase

Part of the debate – in the House of Commons at 6:17 pm on 25th January 2021.

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Photo of Catherine McKinnell Catherine McKinnell Chair, Petitions Committee, Chair, Petitions Committee 6:17 pm, 25th January 2021

Even before the covid-19 pandemic, millions were struggling to pay their council tax and other essential bills. Research in 2019 showed that 1.6 million people have fallen behind on council tax payments, and the pandemic has only worsened the situation. The financial pressures have put a spotlight on how local government has been forced to rely more and more on increases in council tax over recent years, despite it being a regressive tax that squeezes those least able to afford it. The staggering level of cuts in central Government funding to local authorities since 2010, as Conservative Governments have tried to put the blame for their choices on councils, combined with the failure to deal with the crisis in adult social care as our population ages, has left councils with no choice but to increase council tax and the social precept every year if they want to continue to provide essential child, adult and elderly social care services.

Ten years ago, about 40% of local government revenue came from council tax. Today, it is more than 60%. Let us be clear what that means. Conservative Governments have overseen a shift to a far more aggressive way of paying for local government, squeezing struggling families more and more and putting the pressure on communities that can bear it least, while failing to address the real financial challenges that local authorities face. Those challenges are huge. Following the latest local government financial settlement, revenue spending will be about 20% to 25% below what it was in 2010. Over the last 10 years, Newcastle City Council has had to make savings of £305 million, more than £2,000 per household, to balance its budget. Coronavirus has cost councils across the country more than £11 billion in 2020 alone.

We are all eager to get back to the way things were before last March, but as Unison’s No Going Back to Normal campaign has highlighted, there can be no going back to the pre-covid status quo. That normal, with deep cuts to local services that support children, the elderly, the disabled, people with mental health conditions and many more, has made the human impact of the pandemic so much worse.

This is not just about local government arguing for what was promised. It is about a system that is quite obviously broken and unsustainable, and has been for some time, which is putting far too much pressure on those who can least afford to pay, and a Government who prefer to pass the buck to local authorities in the hope that voters blame them, instead of tackling the real issues and ensuring sustainable, life-changing local services can be provided. Short-term sticking plasters are not going to solve the vital issues created by years of neglect, and we need to see urgent action and serious engagement on those real solutions now.