Every year I have had the same email conversation with a small number constituents when they receive their Council Tax bills. They are ‘weekenders’ with a second home in the New Forest, whose main property is in London. They complain that their bill for their more modest Forest property is very much higher than the charge for their rather grander address in London.
I point out that the one in the Forest is, in effect, generating a subsidy for the other in London.
The reality is that shire counties get a poor deal. Government grant funding towards local authority expenditure favours large metropolitan boroughs at the expense of rural England.
The consequence is that rural counties will have to raise a greater proportion of their expenditure from local Council Tax. This is reason why a modest property in the Forest may attract a higher Council Tax than a bigger property in Greater London.
I am afraid that this discrepancy is about to get worse.
The Government published its Local Government Settlement at the beginning of the week and, though I voted against it on Wednesday, it is now a ‘done deal’.
The Government has been tampering with the formula that is used to distribute grant funding between local authorities. It has largely removed the element of the formula that compensates for ‘rurality’.
Delivering services in a rural area with sparse populations over greater distances costs more. It takes longer, it involves more vehicles, it may require more depots. The Rural Services Delivery Grant existed to address these extra cost pressures, but the Government has abolished it. It has only retained an element of ‘rurality’ compensation in the provision of social care for the elderly.
If that cost pressure exists in social care, then surely it also exists in school transport, waste collection, and also for everything else that the councils provide in rural England.
As a consequence urban councils will receive 32% more from the Government than rural areas like Hampshire, and that difference will be reflected in our council tax
Another significant change to the formula that there is reduced reliance on population size and more reliance placed on ‘deprivation’. Nevertheless, research undertaken by the Government in 2018 suggested that deprivation “was not a major cost driver for the services included in the Foundation Formula”. The same research found that population was overwhelmingly the most important factor in driving the size of the variation in costs.
This change will have implications for us, as we are considered amongst the least deprived. Despite our relatively elderly population, the money is going to be heading north.
And I remember the Prime Minister telling us that Council Tax would go up by “not a penny” under his plans, just as we were also promised that there would be no tax increases for ‘working people’