Council Tax

Kent County Council

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Leaders Blog Updated 17/07//2008

Website updated: 21/07/2008




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The Council Tax

The Tories in Kent have year on year increased the Council Tax beyond what is necessary. This is coupled with inflation busting increases in grant from our Labour Government. Since 2003 the Tories have increased the cash figure you pay by £243.72

Increases imposed on the Kent Council Tax Payers are as follows. Figures based on a Band D Council Tax Household:

NB: In 2004/2005 Kent Fire and Rescue became a separate Authority. KCC no longer carries out this function and therefore it appears as a new heading on your Council Tax Bill. Even accounting for the decrease in services KCC had to provide, in 2004/2005 the Tories still INCREASED the Council Tax by 5.2%

Council Tax Year:	Tory KCC Council Tax Cash Figure:	Tories made you Pay Extra £:	Tory % Increase: +/-
2003/2004	£852.84	£94.77	+12.50%
2004/2005	£845.73 ***	-£7.11 ***	-0.83% ***
2005/2006	£877.05	£31.32	+3.70%
2006/2007	£918.72	£41.67	+4.75%
2007/2008	£964.17	£45.45	+4.95%
2008/2009	£1,001.79	£37.62	+3.9%


	Statistics, Lies & Kent County Council Conservative Group.


	Tory Allegation #1. “The increase in Government is under £9million, yet we need an additional £33million and to improve services we need £60million”.

	Tory Allegation #2. “The Labour Government has come out with a settlement which is below the rate of inflation”.

	Tory Allegation #3. “The Labour Government is failing to fund Councils adequately”.

	Tory Allegation #4. “It is impossible to understand how the formula grant system works because the Labour Government has made it so opaque”.

	Tory Allegation #5. “Our Money has gone up north”


Labour Response #1. This is wholly fallacious, it implies that this total gap of £60million should be met from Government funding. The truth is that all that is left, after the increase in the Schools Grant and a whole range of other increases in specific grants paid out by the Government are excluded, is a gap of £60million. The formula grant closes the gap even further to £51million. After that there are savings of £25million assumed by the Labour Government and increases in income generation of £2million made possible by a more liberal trading framework provided by the same Government. The remainder covered by the Council Tax increase of £24million. As we all know there is revenue expenditure which the Tories are wasting on bizarre projects so the Council Tax increase does not have to be as high as £24million.

	Labour Response #2. This is not so clear cut! The assumption is built into the forecast of around 2.75% per annum, so the formula grant settlement is above the assumed rate of inflation. This is of course not mentioned by the Tories. The settlement is well above the Consumer Price Index (excluding housing costs) which last month stood at +2.2% but is below the retail price index (including housing costs) which last month stood at +4.1%. A further point is that inflation rates for the County Council services are believed to be at a higher rate still. The formula grant settlement is based on the long term inflation rate of around +2.75% per annum and, if this is achieved then it is a real terms increase.

			Labour Response #3. If the Tories really believe this then they should not only be attacking the Labour Government but also their own Conservative Front Bench at Westminster. George Osborne the Tory Shadow Chancellor of the Exchequer made it clear in a speech last September and reaffirmed again in a speech on 15th February that he would accept the overall three year spending plans of the Labour Government if ever the Tories were returned to power. This implies that the local government settlements would remain in tact. Not only that, he also hinted that he might slow the public expenditure growth further after the current three year spending plans had run their course. This can only mean cut backs in Local Government support! Paul Carter, in contrast to George Osborne has come out in favour of tax cuts which can only mean cuts in support for local authorities. Yet at the same time he calls for more money from the Labour Government which can only mean higher taxes! Such contradictions are intellectually unsustainable.

		Labour Response #4. From 2006/07 the Labour Government decided to give greater freedoms to local authorities by paying the formula grant as a block with no indications as to how it should be spent. This upset the Tories because they could not blame the Government for setting wrong priorities and now found that they had to do it themselves. This is of course what devolution means! It is true that the formula grant system is harder to understand where the Government is not indicating how the money should be spent. On the other hand, unlike before, the Freedom of Information Act enables you to find out, if you are really determined, how the formula grant system works to a much grater extent than was ever possible previously.

Labour Response #5. This year the Tories have hardly used this argument, The reason isn’t hard to find! Some £7million has been top sliced from the Kent formula grant for 2008/09 to pay for such ‘northern’ councils such as Essex, Surrey and East Sussex!


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