Council tax rises can never plug the funding gap

21 December 2017

Green Party campaigners in Norwich have criticised the government’s announcement that councils will be able to increase council tax by a further one per cent, on top of the maximum five per cent annual increase already permitted.

Green Party councillors have consistently argued that a small annual council tax increase is vital to maintain council budgets as the cost of providing services goes up. However, it is unfair and short-sighted to try to use large local tax rises to cover central government’s failings, says Richard Bearman, the Green Party’s former leader on Norfolk County Council.

“Councils have been placed in an impossible situation, with their funding from government having been cut by 40% since 2010 while the cost of social care goes up and up,” Mr Bearman points out.

“It’s not surprising that many in local government are welcoming the announcement that they will be able to put council tax up further – but it’s not a real solution. It’s a myth that these rises can ever cover the shortfall.

“In 2014, my Green Party colleagues and I calculated that to fully replace the funding cuts to Norfolk County Council, the amount of council tax collected would have to go up by 65% every year. That is completely ridiculous. Shifting the full cost of social care onto council tax is going to deliver a worse service at higher cost to the citizens of Norfolk.”

The Green Party’s long-term policy is to abolish council tax and replace it with a fairer tax on land value.

Councillor Martin Schmierer, who leads the Green group on Norwich City Council, said: “Council tax is an outdated, regressive tax which has no basis in the realities of the modern world.

“A land value tax would be based on the value of land rather than the value of the property, so that big companies that hoard large tracts of land would pay more, while residents living in blocks of flats would pay very little. This would be a much fairer solution. Under the current system, every increase in council tax has a disproportionate impact on the less well-off.

“By allowing councils to put their taxes up further, the government is just passing the buck and trying to hide its own failure to plan for the social care crisis.”

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