As hardworking Brits struggle to make ends meet, councils are splashing ever-larger sums on unnecessary spending and imposing obscene tax hikes on their residents.Council leaders must go back to the drawing board on their budgeting decisions, if they hope to keep their heads above water.
More than 2.5 million people will be financially worse off as a consequence of decisions taken by their local councillors to raise council tax.
Margaret Thatcher would be spinning in her grave if she could see the council tax rates being proposed up and down the country. The Royal Borough of Windsor and Maidenhead intended to raise council tax by 25%, costing the average band D household £451 more annually. Elsewhere in Britain, the situation is not much better. Bradford Council has been permitted a 10% rise. Meanwhile, Birmingham, Trafford and Somerset have all been given the green light to raise rates by 7.5%.
Such rises occur at a time when the British public are struggling financially. Britons are in the midst of a cost of living crisis. Some 40% of households are struggling to pay their energy bills. Food inflation is still high at 7%. Now, more than ever, the British public need money in their pockets, not robber barons taking money from them at every opportunity.
Many cry ‘Tory cuts’ as an excuse for fiscal irresponsibility in councils. Having said that, it would be wrong to acquit central government of all wrongdoing. Spending cuts have made balancing local budgets increasingly difficult, even when local councils spend sensibly. The National Audit Office concluded that between 2010-2020, spending power for local councils was curbed by 26%. The Institute for Fiscal Studies reported that in some parts of the country, local authority budgets were cut by 40%. With adult social care having risen by an average of 3.1% a year since 1997, councils have been asked to spend more while receiving less.
However, putting the blame solely on central government budgeting is neither correct nor constructive. Local councils must take responsibility for the economic environment they have created. Wasteful spending is becoming the norm in local government. Consultancy fees for example, are reaching record levels. Labour-run Southwark Council has spent more than £2m on external consultancy charges. Sitting alongside that on their balance sheet is a 53% increase in catering and refreshments, which has risen to £29m a year. Such spending is unnecessary. The last thing taxpayers want to see is their local representatives throwing away money while they struggle to scrape enough money together for their weekly food shop.
The number of councils which are gambling hundreds of millions in taxpayer money on risky investments is another injustice. Councils have been armed with the power to invest public funds in a wide range of sectors, but as a result of their amateurish experience, much of this money goes to waste.
Slough Borough Council’s foolish investments, for example, pushed the council’s debt over the £1 billion mark. Thurrock Council recklessly spent £1.5bn of taxpayers’ money and proceeded to go into bankruptcy. Local governments have thus proven that they cannot properly allocate their funding. The last thing the taxpayer should be doing is propping up these casino-style councils. There must be more transparency with how councils handle public funding. Only then can the public trust their local politicians.
Not only this, but local councils that are fiscally sensible are faced with the same cuts as other councils across the country. Doncaster, Brighton and Somerset councils have all proven their ability to properly manage their finances, as evidenced through their annual underspends. Yet despite this, they are still treated like every other council that runs up a massive bill on the taxpayer’s credit card.
The Government must change this. Councils should not be tarred with the same brush for being fiscally responsible and remaining under budget. Indeed, they should be celebrated as hallmarks of sensibility. Yet for the last 15 years, Westminster has thrown them under the bus at every opportunity.
Council tax increases across the country are set to bring more than £60bn to the balance sheets of local councils. That comes at the cost of making working people poorer. Few deny that budget cuts since 2010 have forced councils’ hands, but offenders must now cut down on unnecessary expenditures. It is not right that the taxpayer should be punished because of reckless spending.
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