Wednesday, 31 October 2012

Council Tax Feeze - Political Expediency or Storing up Problems for the Future?

Barnet have issued a press release today saying they are considering a council tax freeze for the financial year 2013/14. Originally they were going to put the Council tax up by 5% this year to catch up on the freeze last year but that has now been over-ruled. A council tax freeze may seem like a good idea and it comes on the back of three previous years of council tax freezes. However, a tax freeze this year will mean that amount is lost every year going forward - it's the same principle that Barnet use to accumulate the costs savings they reckon they will make on the One Barnet outsourcing project. If inflation runs at an average of 2.5% over the next ten years that means the Council will miss out on around £35 million of revenue to fund essential services such as adult social care and children's services. The residents perception survey shows clearly that residents are prepare to pay a little extra for certain services (not roads and bins) it is is made clear what it is for.

At a time when it looks like budgets are going to be cut further it seems foolish to allow inflation to erode £35 million of future revenue for the sake of a short term political advantage.

By the way, I was pleased to see that in the cabinet papers they have amended their 'graph of doom/ choices' to show a growth in council tax revenue caused by a rise from business rates/additional dwellings. What a surprise seeing as this is exactly what I suggested when carried out my analysis published here on 1st October. Shame it took a resident to point out the flaws in their logic when all their expensive senior managers and consultants "overlooked" it. Who carried out the review where are the checks and balances.

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