Rating a Headache

Countryside Column for 2^nd January 2015

Rating the Rates

If you want to give yourself a real headache, start the New Year by getting to grips with local authority finance. 

Why ever, you may reasonably ask, should I want to do that?  Well it’s actually quite important.  The state of the roads, schools, refuse services, street lighting etc all depend on our councils having enough money to pay for them.  Traditionally about a quarter of that spending came from the ‘rates’ or Council Tax and the remainder from national Government grants or centrally collected business rates.

            But national government has been busy cutting those grants – up to 9% this year and a whopping 27% reduction over the next four years. Can the shortfall be made up from council tax?  No, it can’t. Rises are effectively capped at 2% unless the local authority holds a cumbersome and expensive referendum.   So County, Unitary and District or Borough councils have less and less money available to provide services.  And that reduction in resources is trickling down to Parish Councils like mine. 

            Each of our 800 village homes pays a small precept for the extremely local things we run, including the village green, public toilets, bus shelters, recycling and services for young people.

Tunbridge Wells Borough Council has withdrawn about 6% of various funding streams from the parish’s modest budget of around £40,000 a year. So we have a choice of cutting services or increasing the precept.

No one wants to increase taxes.  But we do want to maintain, and preferably improve, services.  So at out last meeting we had a choice: effectively stand still and increase by £1.67 the middle, band D, bill for each home. Or, alternatively, increase our budget by roughly £6,000 and up the median precept by £9 per house per year.  Since we ask for far less than most neighbouring parishes, and as £9 a year seems relatively little, we took the second choice.

However even that modest increase looks bad when translated into a percentage – it works out at a 26.3%. So we have two problems.  First to explain it to our electorate.  This I am fairly confident we can do.  The second could be trickier.  The government is complaining about “inflation busting” settlements for parishes, and is considering imposing referenda on increases over 2%. 

In an election year I rather doubt any party will be supporting us by advocating higher spending in any tier of local government.