Council Tax freeze – Doing our bit

COUNCIL TAX: Our proposal to freeze it next year recognises residents' battle with rising costs of living.
COUNCIL TAX: Our proposal to freeze it next year recognises residents’ battle with rising costs of living.

LAST WEEK we announced plans to freeze Oldham Council’s element of Council Tax.

This is a key plank of our final budget proposals for the next financial year, and is designed to do our bit to help hard-working families.

I know from speaking to residents last year that the way this information is presented is often confusing so, before I talk about that decision, it’s worth explaining exactly what components make up your final Council Tax bill.

As well as setting the level of its own Council Tax, Oldham Council must also act as the collector of other parts of your bill from different authorities that also provide services for you.

We collect Council Tax on behalf of the Greater Manchester Police Commissioner, the Fire and Rescue Service, plus Parish Councils in Shaw and Crompton, and Saddleworth, and these shares – known as ‘precepts’ – are all itemised separately on your final Council Tax bill.

At the same time we must also pay levies to the Greater Manchester Waste Disposal Authority and Greater Manchester Combined Authority for services provided across our region.

Where some confusion arises is that these levies are included in the ‘Oldham Council Tax’ figure which will appear on your bill, but they are not shown separately.

In the case of both precepts and levies these are simply collected by us and passed on – they are not used to fund services directly provided by Oldham Council.

In deciding to freeze Oldham Council’s element of your Council Tax bill for next year we were fully aware that we face continuing pressures on our budgets and services.

However it was also important to show the public that we are on your side – that we ‘get’ the financial pressures all residents are facing at this time.

We know people are facing an ongoing battle with basic costs of living.

Energy bills continue to soar, as does the cost of food, fuel and other necessities which all make household budgets a real struggle. Some figures I recently saw estimated that the average weekly household income in Oldham has dropped from around £437 to £417 this year.

Lower income and rising costs is an unhealthy combination and we simply couldn’t ignore that fact.

We needed to do whatever we could to try and help and that’s why we have also appealed to the other precepting and levying authorities to follow our lead in not putting up your bill.

There’s no official confirmation of their final proposals yet, but we certainly put our case strongly and hope they listened.

That focus continues the theme of much of the campaigning work we’ve done in recent times, which has been designed to put money back in local people’s pockets.

A good example is Fare’s Fair, our campaign for cheaper public transport, which saw First giving Oldham residents a 28% saving on daily and weekly bus fares – an offer so successful it has now been rolled out across the rest of Greater Manchester.

Another is Our Fair Energy campaign which saw us promote collective energy switching, bringing 8,700 local residents together to get a cheaper energy deal and deliver an average saving of £171 per household. Again it was so successful it now encompasses all the Greater Manchester authorities.

Standing up for residents like this is what a Co-operative Council should do and that work continues daily in many other areas: including our Get Oldham Working and Fair Credit campaigns.

I want to say a little here about the Council Tax system itself now which was once much higher up the national political agenda than it is at present.

Politicians now appear to generally have got into a cycle whereby it is seen as unquestionably ‘bad’ to put Council Tax up – and unquestionably ‘good’ to freeze or cut it.

To me that is over simplistic and wrong.

Council Tax is there to help provide public services that meet the changing demands of the public – and those setting it every year face their own challenges.

Oldham Council has already delivered £118 million in savings in the last five years, and the 2014-5 budget will see another £23 million taken out. Looking ahead we know we must then also find an estimated £60 million in savings over the next two financial years after that (2015-7). The budget cycle simply gets tougher and tougher each time.

Just like a household budget we’re also seeing rising costs in terms of the increased demand for our services from vulnerable people, plus inflation and costs passed on by service providers to us.

All that requires tough decisions and choices to be made.

If we don’t increase Council Tax to keep pace with those rising costs – plus the well-documented and continuing reductions in Government grants – then, clearly, we have to find even more savings and take that out from what we are already responsible for delivering.

It is also important to point out here that – despite what the Department for Communities and Local Government claims – the Freeze Grant it offers us to not to put your Council Tax up simply does not cover the whole cost i.e. the income we would have got from putting your bills up. In Oldham’s case it will still leave us with a significant shortfall to find again from somewhere next year.

We will, nevertheless, take that on the chin and stick by our guns in the belief that not putting your Council Tax up is clearly the right thing for residents at this time.

However, I also think we must not lose sight of the bigger picture here, which is that Council Tax is actually a very unfair system.

Here in Oldham our residents can pay almost four times as much in Council Tax as people in Westminster in the same property band – and yet they are also living in homes worth significantly less on the property market. Can that really be fair?

For me, the focus in the national debate really shouldn’t be on whether Council A has put Council Tax up by X amount, frozen or cut it by Y. It should be about how we address that kind of discrepancy in the system.

And at a time when we see ongoing debates about the future of Local Government in Scotland and Wales and how they are funded it is also – for me – high time that English authorities started looking at how they ensure they get a better deal, and looking at a system that is also fairer to all our taxpayers.

For next year then, in Oldham, the Council Tax will (subject to approval by Full Council) be frozen, although we can’t make any clear promises about future years given the landscape that I’ve just outlined.

As the pressure to find even more savings cranks up – and with no fat left to cut – it means we will soon need a very honest conversation with communities about what your priorities are from us.

We will need to know what you expect your council to deliver, what you think can manage without, what you can do to help find new solutions and drive costs down, and – crucially – how we balance all of that so we can still invest in projects that create a better Oldham both as a place and for its people.

Thanks for listening,

Jim

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