MSE News: Council tax bills could be frozen – but there's no guarantee 26 June 2013 at 1:54PM edited 26 June 2013 at 4:14PM in Cutting tax 2 replies 1.3K views

Former_MSE_Helen

"Councils in England will be given a budget to freeze their council tax for the next two years, Chancellor George Osborne announced today in his Spending Review..."

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Council tax bills could be frozen – but there's no guarantee



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rogerblack

This is not as simple as it sounds.
It seems on the face of it that only councils who were not looking out for their ratepayers would not choose to take this funding, and freeze bills.


Councils are affected by the welfare reform in different ways. Some have had a considerable reduction through this already, and there is very, very little 'fat' left to cut.

Any further cuts means in general cuts in customer-facing services.
Less help for residents from social services, reduced bin collection frequencies, less street-cleaning, ...
As I understand it - if they do freeze - then they run into problems the next year.
This is because the new baseline any spending increase is based on is the prior years headline figure.

If you freeze the council tax for 3 years, and don't increase it by 2% a year, then yes, you may have over those years gotten an extra 1% a year or so in funding.
But, come the end of the third year, your total revenues are down about 7% of one years spending, and you now face a new budget that is 6% down in real terms.

2% a year shrinkage may not seem like much - but it rapidly adds up.
This isn't 'political game playing' - it's not a debate over some obscure political point.

It's 'can we continue to run what we consider essential council services'.
The impact of other legislation is also important.
For example, the localisation of council tax benefit, and crisis loans, all may add requirements for extra funding locally - especially for places with a large population of people in low paid work. This can make the effective increase in demand for some services way more than inflation.

wronlaster

Council tax bills could be frozen but this is not so much simple matter as we can see it .there are certain condition under that frozen options is clicked by department .