Thursday, March 29, 2007

ITBA 14- Council Tax

The Bloke's latest vid is on Council Tax and the Lyons Inquiry into local government finance. It was made for last night's Your Money programme on 18 Doughty Street, featuring a discussion between Blair Gibbs of the Taxpayers' Alliance, Andrew Johnson- Deputy Mayor of Hammersmith and Fulham- and the Bloke (watch again here).

We blogged the Inquiry here, and last night there was agreement that despite its 600 pages of report and annexes, its prescriptions are pretty thin. Andrew describes it as a sticking plaster. At best.

A couple of charts that couldn't be fitted into a 5 min vid are worth remembering.

First, from Lyons, another summary of local authority funding mix across the world. It underlines just what an outlier we are in the UK, with a much higher level of fiscal centralisation than virtually any other western country. Whereas here only 16% of total LA revenue comes from local taxes, in most countries it's over 40%- in Sweden it's nearly 80%.

And as always, he who pays that piper, will insist on calling the tune.

Second, a chart showing the distribution of local funding across English local authorities. As we can see, the proportion raised locally ranges from a high of 60% in Chiltern, right down to 11% in Newham. The reason for this difference of course is that central government funding includes a huge element of redistribution away from affluent Tory and LibDem areas down south, to Labour areas in our big cities and up North. It's done through the entirely opaque statistical black box of the Revenue Support Grant allocation, although Labour have also added a lorry load of specific distributional grants for their pet schemes, such as the hopeless counter-productive Sure Start scheme (see this blog).

On a positive note, it was very interesting talking to Andrew Johnson, whose Conservative authority has recently announced a 3% cut in Council Tax for 2007-08.

Which just goes to show what you can achieve if you really try. Even if you're strapped into a top-down Big Government straightjacket like our local authority financing system.

We'll blog Hammersmith and Fulham in more detail when we've done some digging.

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