Saturday, 23 January 2016

Council Tax in Frodsham - it isn't looking good

Since CWaC was created in April 2009, in Frodsham, we've seen a real terms decrease in council tax paid of 14%.  Throughout this time the Council was run by the Conservatives. This is in stark contrast to the time of the Blair/Brown Government (where council tax rose 112% in cash terms and by 40% when you take account of inflation.)

Unfortunately the prudent approach taken by the Conservatives locally looks set to be reversed in the now Labour led CWaC.

Some background - Council Tax in Frodsham:
In 2015-16 a Band D household paid £1,532.99 in total. 
The amount we pay in Frodsham is made up of 4 component parts:

Precepting authority
Band D
Police and Crime Commissioner
Fire and Rescue Authority

Council tax in 2016-17

CWaC look set to raise the Council tax by 2% the maximum permitted without a referendum and a further 2% for adult social care.

On the assumption this proves to be correct the decisions likely to be taken by CWaC will add around £50.72 to a Band D council tax.  We will know whether this proves to be correct in February.

It is also likely that the special expenses regime that favours areas like Frodsham, where services such as part paying for our PCSO, our Christmas Lights and play areas are paid for by the Town Council will be greatly reduced in scope.   This may well mean that the council tax in Frodsham increases yet further or that we are compelled to take a disproportionate share of costs.  Some people see this as double taxation.

When the special expenses arrangements were created Frodsham benefited by around £8 per Band D property.

Police and Crime Commissioner
The Police and Crime Commissioner is considering his options - however as Cheshire Police raises the 10th lowest police precept in the country he will be allowed to breach the 2% barrier and raise the council tax by £5 (i.e. 3.2%) should he wish to do so.  I suspect he will ask for £5.

Fire and Rescue Authority
I envisage that the Cheshire Fire and Rescue Authority will also seek to increase their element of the council tax by 2%.  I'm not aware whether they will be allowed to increase the council tax by more than this under similar arrangements that the Police and Crime Commissioner may be able to use.

Frodsham Town Council
FTC (which is not limited by the 2% barrier) has just announced that it will be raising its element of the council tax by £19.78 to a total of £58.16.  This is an astonishing rise of 51.54%.  

This is largely because the council took the decision in the summer of 2015 not to sell the Park Lane play area after it had funded the Churchfields Play Area improvements out of reserves.  It had previously budgeted that it would receive a significant capital receipt that would have paid for the Churchfields scheme.  The Frodsham wide consultation had shown widespread support for selling Park Lane in preference to raising the council tax.  

This rise is also partly due to Labour run CWaC withdrawing the new homes bonus payments to all Town and Parish councils which I mention again below in more detail.

The likely out-turn for 2016-17:

CWaC - an increase of at least £50.72
Police and Crime Commissioner - an increase of £5
Fire and Rescue Authority - an increase of £1.41
Frodsham Town Council - an increase of £19.78

Total likely increase - £76.91 or more than 5% when inflation is near zero.

Background to 2016-17 budget round
The Government is continuing its commitment to restrain public spending to play its part in balancing the country’s books. There are significant changes to the way in which Local Government is funded in train.  By 2020 councils will no longer collect local business rates, send them to London and then receive some of that funding back to run local services.  By 2020 councils will be able to keep their local business rates (not just the growth in them).  The aim is that by 2020 councils should be self funding – and receive no central government grants.  That should benefit areas like CWaC who already subsidise less efficient urban areas.

Labour’s attack on Frodsham
Labour have  already indicated that they will remove the payment of the new homes bonus monies to all town and parish councils.  The Conservatives passed 20% of the funds it received from Central Government directly to those communities where new building had taken place. Over the last few years FTC has benefited considerably – with payments of £35k and £27.9k in the last 2 years, all of which goes directly into new projects or to keep local council tax down.

Labour are about to consult on the imposition of CIL - the community infrastructure levy which will be payable when a development site receives planning permission for new houses or shops.  

The levy will be used to fund infrastructure throughout the Borough.  However the proposed plans look set to exempt Ellesmere Port, Northwich, Winsford and Blacon (part of Chester) from paying any CIL - meaning that it will be the rural part of the Borough, like Frodsham and most of Chester that will end up paying for the Borough's infrastructure improvements - which, no doubt, will disproportionately favour the urban areas.  

This looks set to increase the price of new houses in the areas where the CIL is charged as the developer will almost certainly pass the cost on.  

The levy is likely to be set at £110 per square metre of new floor space - one of the highest rates in the country.  A typical modest new home can range between around 70-100sq metres meaning a charge of between £7,700 - £8,470 per property.  There will be some offset in terms of floor space being replaced and smaller scope for s106 payments.  However, in my view this will act as a disincentive to invest in places like Frodsham and push up new house prices.

And all this is ever before we get onto the likely imposition of car parking charges, the loss of our local tip - all of which look very likely under Labour... Then add to this their apparent failure to listen to local people about what the real priorities are such as putting 20mph speed limits ahead of other more pressing needs such as dealing with traffic pollution on the A56 and improving pedestrian safety on Manley Road... none of this is looking good in my view.