When a Council Tax freeze is a 1% increase

The local Tories have been claiming that the Council Tax has been frozen by Rugby Borough Council for the fourth year in a row. For example, Cllr Michael Stokes  made the claim in a post attacking his former colleague Howard Roberts. Our MP Mark Pawsey wanted to use it to suck up to David Cameron, and tweeted this:

Regrettably not called at PMQs so unable to refer to Rugby’s Council Tax freeze for 4th yr in a row

— Mark Pawsey (@MarkPawsey) February 27, 2013

And the Borough Council’s press release is quite clear:

Rugby Borough Council’s share of residents’ council tax bills is to be frozen for the fourth year in a row, after councillors set the authority’s budget for 2013/14 on Tuesday (26 February).

The freeze means that the average charge for a Band D property will be £187.88 for the year – a small increase of 70p due to increases in parish council precepts.

The problem is that this is not true. For most of the Borough’s households the RBC part of the bill has risen by 1%

What has actually happened is the following:

  • The County Council and Police & Crime Commissioner portions of Council Tax have indeed been frozen (but by them, so no thanks to Rugby Borough Council)
  • Most Parish Council precepts have fallen.
    23 of the 41 Parish Councils will charge residents a lower precept than last year. 4 keep it at the same level (for three of those it is Zero).
  • The basic Rugby Borough Council charge has fallen by about 1%
    This is charged to all taxpayers across the Borough, and has gone down from £128.94 to £127.67 for a Band D property, a fall of £1.27. This is a double good news – a further reduction – for those living in the Parishes that have cut their precepts. And as it’s a greater reduction than the Parish Precept increases in most of the remainder, there are only five parishes where the total Council Tax bill has gone up. Even for those, at least residents can see how their Parish Council budget has led to any increase, hold it to account etc etc…
  • The Rugby Town Area precept has increased by 5%
    This is a charge only paid by households in unparished areas to Rugby Borough Council for ‘exclusive’ services. This covers the vast bulk of the town of Rugby (and about 2/3 of all households in the Borough). The charge has gone up from £63.14 to £66.27 for a Band D property. So, for a Band D household in the town of Rugby the total Bill has increased by £1.86 (£3.13 more in precept, less the £1.27 above). And all of that increase is going towards Rugby Borough Council services. That is an increase of just under 1% on the total RBC portion.
  • Overall, the effect across all of the parishes and unparished Rugby town is that Rugby Borough Council tax bills are going up by an average of about £1.40 for a Band D, or 0.75%. When you add in the changes to Parish precepts, it is lowered to about 70p due to most of them going down, which is how you get to the RBC stated averages in the RBC press release.

So, the Borough Council was completely wrong to claim a freeze, and what is more completely wrong to attribute the average rise we observe to Parish Councils – their precepts are generally lower. What is happening is that Rugby Borough Council are increasing their Council Tax rates by stealth.

What is interesting is that the 1% cut in the basic RBC rate mainly benefits those in Parishes, which mainly (solidly?) vote Tory, while the 1% increase in the Town precept affects the roughly twice as many households who live in the unparished Town, where the Tories don’t do quite so well. If the Town had its own council, it would likely not be Tory led (in fact, I estimate based on 2012 figures that the Conservatives would be the smallest group).

But we don’t have a Town Council. While Parishes can set their precepts, meaning that Parish Councils are responsible for them and accountable to the electors, the ‘Rugby Town Area’ precept is set by the Borough Council as a whole. Without transparency on how this precept is calculated, let alone some accountability directly to those who pay it, how do we know that it is at the right level? We don’t even have the overhead of having a separate council to pay for.

This Town Precept is also higher than the vast majority of Parish precepts (37 are lower, 4 are greater). There may well be a good reason for this, but while the stated ‘Average charge’ is £187.88 for a Band D, Town residents are paying £193.94 in a Band D – 3.2% more

So, if the Tories tell you they froze the Rugby Borough Council portion of your Council Tax bill, and you live in the unparished Town, they are telling you a mistruth – it went up by 1%.

One Response to “When a Council Tax freeze is a 1% increase”

  1. @RugbyBC replies… | The middle of the line Says:

    […] When a Council Tax freeze is a 1% increase […]

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