Saturday 27 February 2021

Greens put forward a radical new solution to strengthen local government via a fairer funding system

This is the first of a series of guest posts by Emma Wallance, Brent  & Harrow Green Party GLA candidate.

Harrow Council have announced that they are increasing the 2021/22 council tax by the maximum legal limit amount allowed to 4.99%.  This means that the council has increased Harrow’s council tax rates by their maximum amount year on year, for the last ten years.  In 2011/12 the average council tax rate in Harrow for band D (there are 8 bands, A-H) was £1186.55, in comparison to this year’s 2020/21 rate of £1522.72 for a band D property  LINK .  That is a £336.17 or +28.33% increase in ten years.  In comparison, neighbouring boroughs Ealing and Brent current council tax rates for 2020/21 band D properties are £1239.15 and £1312.74 respectively.  If we look London wide, Harrow residents are paying the third highest council tax out of the 32 London boroughs, with only Kingston and Richmond charging more.  In addition, Sadiq Khan has announced an increase to the Greater London Authority (GLA) council tax precept by 1.99%, or £363.66 for an average Band D property LINK .  This tax is collected by the 32 London councils on behalf of the GLA and consequently means that Harrow’s Council Tax will see a total overall increase of 5.9% next year.


This huge increase in council tax next year will come as a devastating blow to Harrow residents, many of whom are struggling with job losses and the increased pressures brought on by the Covid19 pandemic.  


Withdrawal of Central Government Funding


The increase in council tax must be seen in relation to the withdrawal of central government funding to local authorities that the Conservative government have presided over for the last ten years, reducing funding support in London by £4 billion   LINK  .  Evidence shows that a decade of imposed austerity from central government has resulted in core funding to local authorities being cut by 63% in real terms  LINK . Harrow Council was already one of the lowest funded councils in both London and nationally, with funding being reduced from £52.1 million to £1.6 million in the last ten years – a reduction of 97%  LINK .


This decimation in central government funding has left the current Labour administration in Harrow council in an untenable situation, having to bridge next year’s funding gap by almost £31 million LINK .  This has resulted in ever increasing costs being pushed on to local residents, whilst the council provide fewer and fewer services.  As Councillor Adam Swersky, responsible for finance at Harrow Council has stated, council tax has effectively become a ‘national stealth tax’ “with the Government shifting responsibility to local authorities to compensate for a lack of financial support.” LINK      

Lost Local Public Services


We have seen savage cuts to our public services in Harrow over the last ten years, from housing, education, public health, as well as both environmental and community services.  Street cleaning has seen repeated cutbacks, with, for example £172 000 cut from its budget in 2014, reducing the frequency of our street cleaning  LINK .  The Council’s waste collection services have also diminished over the last ten years, seeing in 2015 the introduction of the very unpopular £75 garden waste charge, a service that used to be included in our council tax.  It has since been revealed as one of the highest garden waste charges in England LINK    This lack of investment in street cleaning and waste services has continued for many years, with the now infamous 2017 footage, capturing rats swarming around bin bags in a Harrow car park LINK


We have also seen the closure of four of our ten public libraries in 2015 (the Bob Lawrence, Hatch End, North Harrow and Rayners Lane libraries), cutting a local service that provided a lifeline to many who are isolated or in need of library services.  In 2018, our two local Harrow MPs debated the issue in Parliament, with Harrow West’s Labour MP Gareth Thomas highlighting the unrelenting cuts and calling for the council to be “better funded”.  Mr Thomas highlighted the rise in violent crime in the borough and how youth services had been cut by more than 75% since 2010.  Conservative Bob Blackman, MP for Harrow East, responded by accusing the council of not being business friendly enough and needing to work together to apply for additional grants. LINK


The Impact of Demographic Changes and Covid


The reduction in central government funding, can also be seen in relation to a demographic change in London over the last ten years, with Harrow’s population increasing by 7.6%  LINK . The increase in residents, coupled with an aging population, has resulted in ever greater pressures being placed on our local services.  This can be seen most acutely on our social care services, where demand has increased across all age groups.  Social care is an area which must be ring fenced by 3% in the councils’ budgets every year, with the council this year applying for an additional social care grant to help with the increased pressures on brought on by COVID-19.  Indeed, the unprecedented situation caused by the pandemic has placed a huge strain on council budgets, with increased demand on an array of services LINK  .  Whilst the Tory government assured councils’ that they should do ‘whatever it takes’ to support residents through the pandemic, promising ‘Emergency Funding’ to councils, this has not been fully realised and the amounts have not been enough to cover all costs incurred.  As a result, there is now an even bigger funding shortfall than there was before the pandemic started  LINK  .


Harrow Council consequently is in a situation of ongoing funding reduction from central government, changes in demographics and the resultant increased pressure on services, whilst also dealing with the impacts of Covid.  This is tragically resulting in an even bigger reduction in the services provided by the council at a time when we need them more than ever.  


The Green Party’s Vision for the Future


The pandemic has revealed how years of under investment have resulted in local communities being exposed and vulnerable to the health and social realities brought on by this crisis.   Whilst we have seen incredible local voluntary initiatives over the last year, with people coming together to help and support each other, it is not a long term sustainable solution.  Local government needs to be properly financed to ensure Harrow is a healthy and safe place for residents to live and thrive in.  The Green Party have progressive plans to invest in local communities and our vital local services, believing that Council Tax needs to be radically overhauled.  We would like to see council tax and business rates replaced with a Land Value Tax (LVT) or ‘developers’ duty’, which will capture the value of the land not the property.   The current council tax band system is out of date and unfair, based on property prices from when the tax first emerged in 1991.  It favours wealthy home owners and landlords, with costs often bypassing the owners of rented properties, passing instead to tenants.   As joint leader of the Green Party, Jonathan Bartley states, “Council tax is regressive and it’s the past”  LINK    .  The LVT will be a proportionate and locally controlled property tax – “a single tax (replacing the multiple taxes that currently exist) which will capture the real value of land, and the increased value arising from improvements to it.”  LINK    


Green Party Sian Berry has also just pledged to set up a People’s Land Commission if she becomes London Mayor in May, helping to restore and revive local communities.  It is local communities who best understand the areas they live in, and they are the ones who should be consulted “to transform their own high streets, plan a low carbon future, and create community infrastructure and new homes.”  Read more HERE


Paul Lorber said...

Although Harrow is a smaller borough with a smaller population and therefore lower expenditure it is interesting to compare the level of Revenue Reserves between Harrow and Brent.

Harrow has total Revenue Reserves of £43 million. In contrast Brent has Revenue Reserves of around £94 million.

Brent has over twice as much despite being no where near twice as big as Harrow in terms of population or expenditure.

There is something very fishy about the level of Reserves (this is Council Tax payers money!) that Labour Councillors in Brent are hoarding!

Just to put it into context £94 million equals to around £800 to £1,000 for each council tax paying household in Brent.

Paul Lorber said...

Just one minor (if important point) the increase imposed by the Labour Mayor of London on his share of the Council Tax is 9.51% and not 1.99%.

Of the total Council Tax bill the Mayor now takes over 20%.