Local Authority funding
Shifting costs onto Council Tax
The increase of 55% (from 36% funded by Council Tax to 56%) is a deliberate policy by governments (of all parties) to buy votes by avoiding increases in national taxes.
This is unfair.
Through no fault of their own, LAs with the highest costs (wide-spread rural counties and areas with significant social deprivation) have higher costs and higher Council Tax. Smaller, richer areas, like Westminster, have lower costs and lower Council Tax.
In 2024/25 a band D home in Westminster pays £973.
in 2024/25 a band D home in Gateshead pays £2,450.
Council Tax payers in Gateshead pay 2.5 times as much as those in Westminster.
In 2024/25 a band H £139 million mansion (see below) in Westminster pays £1,946.
This is unfair.
What do we really want from LAs?
Answer:
nationally defined services,
nationally defined standards,
national funding,
local delivery.
What do we get?
a post code lottery,
grossly unfair Council Tax!
We, as citizens, are entitled to the same level and quality of services wherever we are in the country and the costs of those services should be shared fairly across the country.
We want to scrap all local taxes. Land Value Tax can easily raise the equivalent of the total amount LAs need to spend across the country.
Where does LA funding come from?
Local Authorities (LAs) are funded in four ways:
Grants from government.
Council Tax.
A 50% share of the Business Rates they raise.
Other: charges for services, parking fines etc.
The Right To Buy (for tenants to buy council houses at a heavily discounted price) was a cynical ploy to buy votes - and it worked. We have lost over 2,000,000 council houses since 1979 and over 41% of them are now in the hands of private landlords.
The Labour Party manifesto of 1959 first introduced the idea of selling council houses:
“Every tenant, however, will have a chance first to buy from the Council the house he lives in”
The Poplar Rates Rebellion
In 1921 Poplar was one of the poorest areas in London and there was no government support to alleviate the high unemployment, hunger and poverty in the borough.
Poor laws had been in force, in one way or another, since the Poor Law Relief Act of 1601 and the Poplar Poor Law Union had to be funded 100% by the people of Poplar themselves.
The Poplar Rates Rebellion 1921 was led by George Lansbury who would later go on to be leader of the Labour Party. The Borough Council refused to collect rates which had to be passed on to the wider London bodies: London County Council, Metropolitan Police, Metropolitan Water Board etc.
32 councillors, including Nellie Cressall who was pregnant, were sent to Brixton and Holloway prisons.
Poor Law Unions were abolished in 1929 and under the Local Government Act of 1929 the costs were spread across all London boroughs.
The unfair distribution of Council Tax is a remnant of this unfair system.
Is it time for the 2025 National Council Tax Rebellion?
What is to be done.
The solution is simple but no government has the honesty and courage to do it.
Detailed agreement on the level and quality of services LAs should be responsible for.
100% of LA funding to come from national government.
Spread the cost fairly across the whole country by using Land Value Tax to replace Council Tax and Business Rates.