Time for some honesty on how local taxes are spent

It’s time for an honest conversation about tax in the UK. Successive Governments have pledged not to increase the tax burden on the public in their manifestos and then once in power they put in place policies that do the opposite.

Just look at the shift that has taken place in tax revenues since austerity started. In 2010, local government’s core spending power of £50B was around 80% funded from local tax yield with a further 20% subsidy from direct taxation. Fast forward to 2019 and the £46B or so that local government will receive in core spending power in the coming year, is outstripped by the £52B that will be raised in local taxation. Local taxation is now clearly subsidising national spending. 

Local people and local businesses are now paying significantly more in council tax and business rates for the services they receive at a time when many of the neighbourhood services, that determine the look and the feel of the place, are being decimated. Add to this the fact that fees and charges have also either been introduced or increased, in order to try and hold local services together and we really are testing people’s patience.

The LGA’s warning last week of an £8B funding gap by 2025 is not scaremongering, this has been a long drawn out saga that since 2010 has seen councils in England lose 60p in the pound, in terms of the funding Government had provided for services. Combined with the huge increase in demand for adults and children’s social care, this really has brought many of the discretionary neighbourhood services to the brink.

The smoke and mirrors approach to the funding of public services needs to stop. Whilst we know that the on-going fair funding review is just about deciding how money is distributed within the sector, rather than increasing the pot itself, this year’s comprehensive spending review is a chance to rebalance the baseline and be open and transparent on how we fund services moving forward.

Whatever happens with Brexit it will be a chance to begin the process of rebuilding trust between the public and politicians that has been so badly damaged in recent times. If austerity really is over then what better way to demonstrate this to the public by investing more in those highly visible frontline neighbourhood services that the public see on their doorsteps and in their communities on a daily basis.

The public are not fools, anything less than this will only further undermine the public’s trust in democracy, both at a national and local level.