Meeting of the Parliament 06 February 2014
Absolutely. When we look at the budgets that are being set across the country, we see that the choice between keeping the council tax freeze or losing even more money is not a palatable one for our councils. The point that I am making is that the council tax freeze is predicated on tackling the cost-of-living crisis, yet the people it hits directly in their pockets are those on the lowest incomes, who most deserve our support.
For example, the council tax freeze most benefits those with the largest houses. This year, the annual benefit for people in band F, G and H houses is more than £300, but for those in band A houses it is under £100. Then there is the increase in charges for services across the country. In 2003, income from charges equated to 40 per cent of the money raised by the council tax. Today, the figure is nearly 60 per cent.
The finances are crucial. The real-terms funding cuts at a time of increased demand and the impact of Tory austerity policies mean that something has to give. The Joseph Rowntree Foundation told us last year that local government cuts have the severest impact on poorer communities, that we will see local councils withdraw from front-line services and reduce and ration services and that the most vulnerable will be hardest hit—we have debated that in the chamber before. This is a tough settlement for local government.
I welcome some of the announcements that the cabinet secretary made today, especially on payday loans. We have been constructive over the past year. For example, we supported the increase in planning fees to ensure a degree of cost recovery and last year we proposed working jointly to mitigate the bedroom tax.
This settlement will be a challenge to local government. Last year, the cabinet secretary described his deal as a flat cash settlement but it was not, because local authorities had to make cuts to balance the books. We received the figures for today’s budget only at 5 past 2 and will examine them in more detail after the debate.