Category Archives: Council tax

Your Council Tax

Dear Neighbours,

I just received my annual council tax bill. I thought it could be helpful if I explain how it’s calculated and where your money goes.

Although your monthly direct debit (well, it’s a 10 out of 12 months DD, to be exact) says Vale of White Horse District Council, only a small portion of that payment actually goes to Vale. Vale is the collector and administers the accounts, receiving payment and sending on the appropriate amounts to the County, Police, and parish.

I once asked Vale Finance officers if we could change the name of the payee on Direct Debits, because when I see Vale of White Horse in my statement, it seems like all the money goes to Vale. I thought if we could change that name, it could be clearer. But I was told that no, the name on the bank account has to be the council who serves as the administrator and pays the correct portions to other parties.

So here we go.

Your council tax is based on the value of your house in 1991. That’s right. Nothing has been revalued since then. If your house is newer, the Valuation office assesses its 1991-equivalent value to use as a council tax calculation.

My house in North Hinksey Parish is a Band D property,

County Council Tax

My band D house pays £173.40 per month (over 10 months) to the County Council. That’s an increase of £8.24 per month for the coming year. 

Thames Valley Police Tax

It’s harder to find this information out. They publish this table on the website:

In the text narrative on that webpage, they explain they raised the tax this year by £15.

So let’s try my maths skills. This year is £256.28. It is a £15 increase for the coming year, which means my tax last year must’ve been £241.28. Right? Divided by 10 months, means I used to pay £24.13 per month.

My Band D house pays £25.63 per month (over 10 months) to Thames Valley Police. That’s an increase of £1.50 per month for the coming year. 

Vale of White Horse Tax

Last year I paid £146.69 per month to Vale.

My Band D house pays £15.12 per month (over 10 months) to Vale of White Horse. That’s an increase of £.45 (45 pence) per month for the coming year.  

Town or Parish Tax

The green table above shows the average parish precept. But I looked up the actual precepts for a Band D property, which are set by the parish council or parish meeting.

North Hinksey: £51.20, or £5.12 per month.

Wytham: £39.44 or £3.94 per month

Sunningwell: £55.33 or £5.53 per month

South Hinksey: £105.06 or £10.51 per month

In Summary

Add the monthly amounts for each of the taxing agencies: County, Police, District, parish, and you have the total.

For my annual amounts, it is: £1734.03 + £256.28 + £151.26 + £51.20 = 2192.77

For my monthly payment, then, it is: £173.40 + £25.63 + £15.12 + £5.12 = £214.27

Here is my statement:

That adds up to £2193.20, whereas I expected to be charged £2192.77. It’s down to rounding errors on my part.

Here is my calc:

And that’s how it works.

Best wishes, and kind regards,

Debby

 

What 8 years of Tories cost the Vale of White Horse

A couple of years back, Vale’s external auditors said council’s Tory administration had let too many senior staff go, in fact to the point that council was no longer able to run the business effectively. So the last three years have seen an expensive structural reorganisation taking place.

About three years ago, I read a newspaper article about how angry and shocked local people were in another authority when they learned their Local Plan has cost them over £3mil. I thought ours had probably exceeded that, so I asked our Head of Service. At that point they didn’t track the cost of Local Plan work separately (!?). But they said all their policy budget was essentially for Local Plan work. So there have been eight years of Local Plan work, at £1mil per year, and we still have no complete local plan. That should be in the news. That’s how the Tories have managed the planning policy budget.

In 2018, we learned that the estimated £9mil savings to be realised from the 5 Councils Partnership (5CP) outsourcing scheme was lost. The financial outcome at that time was described by the council’s Chief Exec as ‘break even, at best‘ (my emphasis). This decision to outsource was a huge, risky decision, made in secret, without ever coming past Vale Scrutiny Committee or Vale Full Council. I heard the former Deputy Leader of Vale say on radio during the 2019 elections debate, that it HAD come to council. That isn’t true. Obviously the contracts weren’t thought through or evaluated enough. There were errors in the calculations of current costs of service. Some critical services weren’t even IN the contracts (such as wifi in the council offices, a basic provision). There was not enough time allowed nor people involved to ensure it was a good deal for the taxpayers. £9mil in forecast savings, gone. Unsurprisingly, Council’s external auditors found problems with council’s value for money assessment. Council is still spending money to improve the contacts and services that are part of this 5CP. Many services have already been brought back in house. There are seven more years to run in this contract.

Council has three main income streams: business rates, new homes bonus, and council tax. Government frequently modifies the business rates scheme and new homes bonus schemes, and ministers have said they expect local councils to maximise their income from council tax. For years, Tories decided, against officer advice, to freeze council taxes. They are proud of this past; they still brag about it. But now we are in a bad state; the medium term financial plan shows council will run out of money in about 4 years time, unless something happens to fix the problem. The cost of these Tory decisions to freeze council taxes is estimated by our accountants to be > £10mil over the medium term. This failure to responsibly incrementally raise council taxes has led to an over reliance on new home bonus, which was always a fragile scheme. This year the new homes bonus has been wound up, leaving us in a perilous financial situation.

It all started in 2011, when Tories announced their free 2 hr parking scheme, a clever bribe for votes, which actually worked to get them into power for the first time in years. Who wouldn’t vote for free parking in their market towns? Tories assured everyone it would increase footfall and the spend in town centres. The cost to our taxpayers is £200,000 per year, and it’s ongoing. So, £1,600,000 of taxpayer money, income that could have been used for frontline services,  has been lost due free 2 hour parking for car drivers over the 8 years. When asked for evidence to support their benefit claim of increased footfall, no evidence was provided, since none is available. Tories produced zero evidence of any benefit for that spend. In fact evidence around the nation shows that city centres actually suffer when free limited parking is provided. People come and instead of lingering for lunch (etc), pop in and get out before their free parking time expires.

Most recently, the Tories gave about £250,000 to the Abingdon Flood Scheme, which has since been cancelled as forecasted costs rose beyond what was viable. It was public money down the drain.

It’s obvious the Tories never had enough people in place to do the work required. That has cost the council both financially and in terms of reputation.

So the Tories lost control in the recent election. We, the Liberal Democrats, were elected instead. We have made it our highest priority to get the council’s finances under control.

Vale budgets and income sources

I wanted to share what I’ve learned recently about how our Vale council is funded, the insecurities in funding, and how that affects our ability to plan and provide services.

I’ll use approximate but correct figures here. That way it’s easier to follow.

Our annual budget is currently a bit over £15m per year. We earn about £800,000 on our investments each year. So that leaves a little over £14m to be provided by the other sources of income:

  • New Homes Bonus: 33% of our income
  • Business Rates Retention Scheme: 16% of our income
  • Council tax paid by residents: 47% of our income
  • (these don’t add to 100% because of rounding)

Our population is about 130,000, so it costs council about £110 per person to provide the services we do today. (130,000 times £110 is £14.3m.)

New Homes Bonus (NHB) has been a Government scheme to reward councils for successful housing growth. Vale has excelled at this and as a result 33% of our income has been from the NHB scheme. But Government is ending this scheme and this is the last year for it. They’ve not yet announced what scheme will replace it. As a result, we are unable to effectively plan for our medium to long term future, which has brought about the current pause in discretionary capital spending.

Business Rates Retention Scheme (BRRS) is a Government scheme to promote business growth in the district. Council retains a portion of the business rates we collect. But there’s a hitch. The percentage we retain depends on income being over a certain threshold, which was set when the scheme started in 2013-14. In our council, immediately after this baseline was set, Didcot power station closed and the Culham Science Centre gained charitable status, so neither of them had to pay business rates any longer. As a result we haven’t exceeded our threshold from the very beginning. So our retention rate is low, and even though the Government has been the same party as the Vale administration, there’s been no success in trying to get a correction for this on our behalf. So we’ve been losing out every year due to an accident of timing that hasn’t been remedied. BRRS is low, then, at 16% of Vale income.

The only income stream under any sort of council control is the council tax that we pay as residents. For the current year, 2018-19, it is £126.69 per year. Councils are allowed to raise it by the greater of £5 or 3% each year. For many years the Tory administration decided not to raise it at all, which has meant that the portion of council income that was under our control wasn’t maximised. That’s set back our financial position by several £m, as a result. (That’s another post for another day.)

Councils across the UK vary in their dependence on Government schemes for their budgets. Where councils have managed their council tax rate so that council tax is set at a level that covers most or all of services, those councils aren’t overly concerned with the whims of central Government and their frequent changes to local authority funding schemes. They are more stable. But Councils where their council tax is set very low, and who rely heavily on Government funding, are having the worst times right now. We reap what we sow, in my opinion. By freezing council tax for many years, Vale is relatively more reliant on Government funding, and that dependence has brought us to where we are today. Financial uncertainty for the medium to long term, and the pausing of discretionary capital spending.

What do you think should happen now?

My council tax

I know many of us think council taxes are too high. I have a mixed view.

I pay £178 each month for ten months of the year. That is a lot.

£142.00 goes to Oxfordshire County Council.

£18 goes to Thames Valley Police.

£12 goes to Vale of White Horse District Council.

£4 goes to North Hinksey Parish Council.

(Doesn’t exactly add up as I’ve rounded the monthly numbers.)

So the £12 I send to Vale each month contributes to our waste and recycling collections, leisure centres, parks maintenance, housing and homelessness services, planning policy and development services. And more.

District councils are allowed to raise council tax by the greater of 3% or £5 per year. If they want to raise it more than that, a referendum must be held (and those are expensive).

A council tax rise of £5 per year would be 50 pence per monthly payment. Most of us wouldn’t notice that amount, even if it happened every year. Plus, people who would find this a hardship can take advantage of a fund kept on hand to help people who can’t afford to pay their council tax. That pot has never been depleted, so everyone is clearly coping.

As far as I know, there is no legal limit to the amount a parish precept may rise each year. Mostly parishes assess what’s really needed and set the precept to cover it.

I personally would like both the district council and the parish council to charge me enough council tax to fund the local services we need. I think I could squeeze out a bit more in tax and precept to bring safer pedestrian crossings for our children as they walk to school, some parking enforcement to make cycling, driving, and walking safer and more hassle-free, our children’s centre to be able to serve local families, funding help for local leisure facilities, covered bus stops with a place to sit, maintained grass verges. Et cetera.

Those are the things we need, and I would be content to pay a little bit more to have them.

Budget decisions at Vale

Yesterday, the Tory Vale of White Horse Cabinet decided that next year’s budget will contain NO discretionary growth bids at all. They also decided to stop all optional capital projects, such as the new leisure centre in Wantage and any other bricks and mortar projects.

All potential capital projects will go into a waiting bin until there is money to spend. Then each project will be considered based on affordability.

Finances are very uncertain for local authorities right now. It’s still not known how much we’ll have to spend and what the sources of funding will be for the medium term.

Generally, I like to blame the Tories. This time though, considering the situation they’re in, the local administration is doing the right thing by halting spending. It’s the Tory national Government stitching us up so there’s not enough money to provide the services the residents expect. Well, that, and the fact that local Tories haven’t raised council tax over the years in order to keep the funding coming in. So after all, I do blame the local Tories. They’ve brought us to a place where we can’t afford to do the things we’ve planned to do.

Government was supposed to announce the funding this past week. But they say it was delayed due to the Brexit debates and vote.

Council tax 2018-19

Each year, parish and town councils set their precepts to cover their planned expenses for the next administrative year. Here (above) are the Band D total council tax rates for 2018/19 for each of the four local areas in our ward. I Include Oxford City and Abingdon for comparison.

Of the total council tax (rightmost column) Oxfordshire County gets £1426.19 per year. Thames Valley Police gets £182.80 per year, and  Vale gets £126.69 per year.