Opinion by Michael Fabricant MP

WHERE DOES OUR COUNCIL TAX MONEY ACTUALLY GO?

In a few months time, we will all receive our latest Council Tax demands. In the Shire Counties, district and borough councils will be blamed for hiking the latest demands as they are the bodies empowered to make the collections. Yet over four fifths of the costs arise from charges levied by the county. But whether it be district or county or metropolitan borough, is local government wholly responsible for the ever increasing council tax burden?

Since the late nineties, the Government has sought to announce ?exciting initiatives?. The easiest way for any Secretary of State to achieve this is by ensuring that such changes are not a burden on the Treasury and does not need the approval of the often leaden hand of the Chancellor of the Exchequer.

Bur the money has to come from somewhere. And increasingly it has come from council tax payers.

Recently, the Local Government Association raised their concerns about whether central government funding associated with the costs of extending the concessionary bus fare scheme from April will be sufficient. And the Government?s policy on immigration ? both legal and illegal ? sees the cost of social care funding soaring: all of which must be borne locally.

I asked the House of Commons Library and the Parliamentary Resources Unit to do some research for me on this vexed question. They have identified the key areas where the Government has generated significant cost increases for local authorities. These include:

• The ?40m p.a. increase in public law family fees on which the Ministry of Justice is currently consulting

• Increased costs attributable to the landfill tax escalator, which the LGA estimates will add ?443 million to authorities? costs over three years even if local authorities continue to divert waste away from landfill at a rate of 4% per year.

• Additional costs for proposed enhanced reporting of financial statistics and changes to audit arrangements

• An additional burden of ?4.5m in 2008-09 from new limits for means tested student support

• the effect of higher immigration and EU enlargement – where Government population statistics (on which funding to local government is mostly based) have not kept up with the rapid changes to population in some areas;

• soaring cost of social care, due to demographic changes, changes to care home regulation and the knock-on affect of NHS cuts;

• new licensing laws including the resulting costs of extra policing;

And in small districts like my own, Lichfield, over regulation makes the situation far worse. Land search charges and Planning Application Fees are all taking their toll.

Whilst local authorities are legally obliged to provide local search information, Government guidelines set the charge at levels which make it impossible to recover the true costs. Solicitors are exploiting this situation by undertaking searches on behalf of clients and passing on search information plus a margin of profit. In Lichfield it is estimated that over the next 3 years, there will be a 24% drop in the Council?s income from this source, amounting to ?264k – equivalent to 6% on the council tax.

And with respect to planning application fees, local authorities are legally obliged to provide a service to all applicants regardless of project size. However, they are not able to charge at levels to recover costs. In Lichfield there have been a number of major developments where the planning administration cost has been in the thousands of pounds but the Council has only been allowed to charge wealthy developers fees of a few hundred pounds.

David Cameron made the point last week about the Government being obsessed with gimmicks. They are bad enough; but they are compounded when the poor council tax payer has to foot the bill.