Saturday, February 14, 2009

Being Responsible.

Another post on Council Tax in Powys. To recap, the Conservative Group on the Council proposed that the increase be limited to 2%, while another group thought it should be 4%. (It was eventually agreed at 3%). Several people are accusing me and the group of 'posturing'. I have to admit this gets right up my nose. We thought long and hard about the position to take, and we felt that 2% was the responsible decision. I'm not going to criticise others for what they felt was responsible. Its just that we didn't agree with them. I've heard no-one say that we didn't argue our case well.

There are two basic considerations when deciding on the level of Council Tax. Firstly, there is the requirements of the Council to deliver services, and secondly there is the capacity of the people to pay. For the first time in my adult life, the people of Powys have less available money than the previous year. By April there will be a huge number of redundancies, much reduced hours work, much lower profits, and a much lower return on savings. Its also the case that inflation is likely to be below 2% throughout the next financial year. As it is, there are going to be many more people who just don't have the money to pay. I fully expect the number of people that the Council has to take legal action against to extract the money is going to rocket. In my opinion a 2% increase could have been justified..

We are not pretending that this is going to be easy. I have noted that most Councils in Scotland have actually frozen Council Tax at last year's level. Disagree with us by all means, but you can stuff your accusations of 'posturing'.

7 comments:

Jeff Jones said...

Frankly a great deal of nonsense is talked about increases in council tax. The bulk of a council's money comes from central government wether via the UK parliament in England, the Assembly in Wales or the Scottish parliament in Scotland. I don't know how much a 1% council tax raises in Powys .In Bridgend CBC it is just £400000. What has happened in Scotland is that the SNP government has found an extra £70 million for those councils prepared to freeze council tax. It was part of the strategy designed to introduce local income tax into Scotland. The only problem with this is that the SNP government has now had to drop its commitment to introduce local income tax. In the light of this U turn and the present economic situation it will be interesting to see if money is found to freeze council tax increases in Scotland next year. Anyone can introduce a freeze or even a cut in council tax. Hammersmith and Fulham for the second year running has introduced a cut of 3 % in its council tax. The average council tax increase in London looks as if it will be about 1.6%. The real issue is whether the people will like the savings required. The two of us to together Glyn could probaly produce a negative council tax increase for Powys in about 2 days The problem that Powys faces in the long run is two fold in my opinion. Will the other authorities continue to tolerate the floor system which gave Powys more than it should have in the settlement when the authority is increasing its council tax by less than the Welsh average? The second problem the County will face is that the settlements of the next few years are going to be awful. Cuts budgets will be the order of the day. Given the nature of Powys politics how will the Council be able to produce a strategy for this scenario when it has so many groupings and no overall vision for the future? Today's Telegraph talks about national politicians being honest about the crisis and I'm afraid the same message has to be taken on board by our local representatives.

Anonymous said...

Glyn

I am sorry that you dont like the accusation but that its what it is, no matter how well argued the group position was. If you actually read the article you link on this blog entry the Scottish example is spurious since the SNP executive are looking to introduce local income tax and are paying the Scottish councils an additional £70m to freeze council tax. You fail to address the earlier point that infact other Welsh councils are picking up the bill for Powys which if you check on the Assembly website is over a £1 million subsidy this year and was the same last year. What if the other councils decided that since Powys can set such a low council tax that it doesnt need the floor? By keeping the council tax low you are building up problems for the future which as a Powys resident I find totally irreponsible. The idea that raising no income in a time of massively rising costs and at the same time trying to keep open small schools and other facilities is not sustainable, and I suspect that you know it. Im off to watch the match on TV lets hope in addition that the only stuffing today that occurs is of the English team.

Anonymous said...

I wonder if the Powys independents haven't got their own way anyway, by voting - with the Lib Dems - to increase council house rents by 5.7%. That's way above inflation, and what was needed to balance the budget.

That, together with the council tax rise of 2.99%, is going to be double whammy for council tenants.

It's also a double whammy for the local taxpayer, who'll be picking up the bill for any additional housing benefit. With unemployment rising, there are going to be more claimants, for sure.

It's also going to be tough finding new work, as there's been precious little interest or investment from the Assembly in this area.

They can be on every page of the County Times, but Opik and Bates have made no impression in London or Cardiff. Montgomeryshire needs a new champion, and one from the party of government - the next government that is. Dal ati

Glyn Davies said...

Jeff - No arguement woth what you say. When I was encouraging our Coucillors to go for 2%, we were clear that it was going to be very difficult. The fact that the increase is going to be 3% does not change things much (because as you say the difference is relatively small.) We also know that there is likely to be a real terms decrease in RSG over the next year or two. The Powys Conservative 'team' intend to have a discussion about future strategy based on inflation increases only for he next few years at our next meeting. Of course people will not like any cuts in spending, but it is immpral just to pile extra taxes on people who cannot afford to pay. It will be difficult for Councillors in Powys to deal with this - but we have reached a position where they will have no choice.


Anon - The Councils in Scotland froze Council Tax. We thought 2% was the right increase, but a majorityof Coucillors thought 3% was right. There was some 'damping' floor put into Powys, but I think it was still the lowest increase in Wales. There is usually some form of damping, because of the changes that flow from formula changes. There was only a minorirt of Councillors favouring 4%. The Montg Ind., Labour, the Lib Dems and us opposed it.

Anon 2 - There is going to be great difficulty for the people of Wales to pay for this year's increases

Cllr Paul Rogers said...

Glyn, In Wrexham we have introduced an option for council tax payments over 12 months rathrer than 10 to support those in difficulty during these hard times.

I am not sure about the options in Powys at present but it may be one for our group to push for..

Anonymous said...

Sorry Glyn.

You seem like a fairly good politician, and I will probably vite for you at the next election.

But a politician you most definately are. I am utterly convinced that if your colleagues in the Council did not have one eye on gaining popular public opinion, they would have voted for 3.9%.

I am tax payer and I strongly believe that cutting council income by the tune of 800K in today's economy, when people will need access to more services than ever before, is shortsighted and ridiculous.

But then I don't depend on people voting me into my job so I'll try not to be too judgemental, and understand that your councillors have bills to pay too.

Glyn Davies said...

Paul - Could be. I'll tell them.

Anon - Every person seeking election has an eye on what the electorate thinks. That's how democracy works. Don't know why you are so antipathetic to that as a principle.

Over the last few months I have been in total disagreement to any increase beyond 2%. Coincidentally, I am less sure today. My arguement has been that it is unacceptable to increase Council Tax by more than the rate of inflation, when people's capacity to pay is being reduced in real terms. I have assumed that inflation would be below 2% during next year, but today's very small decrease in the level of inflation from 3.1% to 3.0% raises a small question mark. If it does not drop below 2%, then perhaps the 3% that was agreed will turn out to be right after all. We shall see.