One of the government’s main tax-cutting drives has been to encourage councils to keep tax rises to a minimum. Ministers have done this in two ways: firstly, by giving councils a cash incentive to freeze council tax; and secondly, by forcing any council that wants to raise tax by 2 per cent or more to put it to a local referendum.
Since that policy began, Eric Pickles, the local government secretary, has been irritated (but perhaps not surprised) to see dozens of councils raising tax by 1.99 per cent – just below the threshold. So recently, as revealed last week in the FT, he began pushing for a lower limit of 1.5 per cent.
And now for the big story of the day…
A row has been rumbling since the beginning of the year between cabinet ministers Iain Duncan Smith and Eric Pickles about $4.8bn worth of benefits.
To recap: Last year’s spending review decided the government should localise council tax rebates, giving councils the right to cut rebates for poorer residents and use the money instead on tax cuts or service provision. But that could lead some low-earners paying an effective tax rate of 90 per cent, something IDS worries will undermine the incentive to work that he is trying to create through the single universal credit. IDS wants instead to roll council tax benefits into the universal credit so it reflects claimants’ earning status.
When the Tories were in opposition, barely a day passed without a senior figure – usually Eric Pickles – berating the Labour government for its approach to rubbish collection. The party was incensed about councils which withdrew weekly collections, fined householders who did not sort out their refuse properly or sent out “bin police” to check household garbage. Garbage was a key doorstep policy at the general election.
Now in government, however, the Tories’ single-minded obsession with the subject has been rather diluted. For months on end there has been a grinding row about what approach to take to waste. Mr Pickles, now communities secretary, was keen to push through his agenda. But the “waste review” has not been his responsibility but instead that of Caroline Spelman, environment secretary in Defra.
Today the document is published, and you can see who has lost the row. Not only will councils still be allowed to choose when to pick up rubbish – localism in practice – despite being encouraged to do weekly collections for “smelly” food waste.
Also there is some confusion over the coalition’s plan to ban councils from fining householders up to £1,000 for overfilling rubbish bins or leaving out waste for collection on the wrong day. (Incidentally, the document reveals that this power “is very rarely used”). Instead of ending the fines the government will encourage councils to issue “fixed penalty notices” (of £75 to £110), which councils already have the option to use. (Defra tells me that 1,100 such penalties were issued in 2008/9 alone, although 286 were cancelled). There will also be a review of whether these fines should be at a “fairer level” although “it will take time for these changes to be made“. (see page 45 of the document).
UPDATE: Allies of Mr Pickles argue that fines will in future only be applied where there has been “harm to local amenity” by “neighbours from hell” under the proposed changes. This would mean an end to ‘petty bin fines’ forever, says one, meaning a partial victory for the communities secretary. Meanwhile Pickles’ department is still
Page 87 on “Spending Review 2010″ gives a list of cuts to departmental adminstrative budgets. All departments are cutting by 33 per cent except Work and Pensions (35 per cent), culture and media (41 per cent), the business (40 per cent) and – toughest of all – communities (42 per cent). That is the department headed by Eric Pickles.
Page 10 gives the forecasts for departmental “programme & administration” budgets. The third biggest real terms cut was Defra (29 per cent), second was international development (33 per cent) and first was once again communities, where spending will fall by 51 per cent.
Eric Pickles, communities secretary, says today that his plan for council tax will be a “radical extension of direct democracy” which will “let the people decide“.
Under his proposals, the public will have the power to veto excessive council tax rises. (At present only ministers can ‘cap’ these increases).
Any council setting its increase above a set ceiling (approved in, er, Parliament) will trigger an automatic referendum of all registered electors in its area – at the cost of tens of thousands of pounds. The cost alone (at a time of tight budgets) will prevent most local authorities from even trying to carry out big increase.
They will also shy away from such exercises because they know that - in most cases - the public will almost certainly veto the rise, judging by past experience*.
That means the vital decision is the exact level of the ceiling, which will be set by MPs in London. In which case; does this translate into a transfer of power to local people? In effect, probably not.
The most truly democratic/localist way of doing this would be to let councils do what they want. If voters are angered by council tax rises they can vote out their councillors.
* In 2002 Blair allowed a clutch of councils to hold referendums on council tax rises, including Croydon, Bristol and Milton Keynes. Most voters unsurprisingly went for the lowest rise (or freeze).