If the Government is serious about raising money to pay for social care, as well as level up the country, it could increase revenues from council tax without putting an extra burden on the less well off, by overhauling the bands used to calculate it.1
Conservative governments have wrecked Havering’s finances since 2010. Funding has been slashed as has the ability of the council to replace lost revenue through increasing council tax. The 2022 budget statement allows councils to increase council tax by 3% plus 2% for social care responsibilities. This decision may result in Havering becoming bankrupt.2
In 2010-11, band D council tax was £1505. If this had increased by inflation, the 2022-23 council tax would have been £2123.94, it’s actually £1970.97.3 The shortfall is £152.97 for band D houses in Havering, which is 10.16%. Owners of band H houses have benefitted massively from this policy.4 Havering council is losing huge amounts of revenue because Conservatives like to ‘keep taxes low’.
‘Keeping taxes low’ has been popular since 2010. But the chickens are coming home to roost. Conservatives want something for nothing. And the result is their policy will bankrupt Havering and wreck our society.
Very challenging decisions will be made by Ray Morgon’s cabinet because the government obliges Havering to ‘balance the books’. He can’t ‘print’ money to sort out Havering’s problem unlike the government. Statutory care services will be degraded along with other services like the weekly bin collection.
The Road to Bankruptcy
- The amount collected in Council Tax for 2022-3 was £176.185m.5 If this had been increased by inflation, since 2010, revenue would be £17.9 million more this year.
Shortfall £17.9 million
- If the £70 million government grant of 2010 had been increased by inflation it would be worth £77.12 million. Havering received £1.5 million for the 2022-3 financial year.
Shortfall £76.62 million
Total Shortfall for 2022-3: £93.52 million
The entire budget programme of cuts, efficiencies, job losses and service degradation are a direct result of Conservative policies since 2010. Morgon’s four year savings programme of £70 million is less than a single year of revenue shortfall caused by government policies.
1 Comment: ‘A council tax rise (done right) might not be a terrible thing’ (msn.com)
2 Havering’s Overview and Scrutiny Board, 13th October 2022 – Politics in Havering See this for an analysis of the budget Autumn Budget: Council tax could rise above £2,000 per year for the first time | ITV News
3 2010-11 24 February 2010 Council (Council Tax) Agenda.pdf (havering.gov.uk) £1505 council tax if growing with inflation, as calculated by the Bank of England, means that in 2022-3 that figure should have grown to £2123.94. Search results | The London Borough Of Havering £1970.97 2022-3
4 Havering Council Tax: Is It Too Low? – Politics in Havering
5 10 – Appendix G – Council Tax statement.pdf (havering.gov.uk)