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Last Updated:  Monday, 10 March, 2003, 09:24 GMT
Council tax: Is the south subsidising the north?
Experts say council taxes are going up due to a shortfall in money for schools
The typical English household is facing the biggest ever council tax increase of between �126 and �1,102.

The way grants have been distributed by the government has been criticised for benefiting poorer areas in the north at the expense of the south-east.

Experts say the tax hikes are due to a shortfall in money for schools, though the government disputes this and says they may cap excessive rises from "irresponsible" councils.

Are the rises justified? How better could local authorities raise the money? What is your council and what are the implications for your bills?


This debate is now closed. Read your comments below.

Your reaction:

SUGGEST A DEBATE
This topic was suggested by Colin Bartlett from Oxford
Council tax increases are forcing people to move. Is the government implementing too many 'stealth taxes' to further divide the country?

Local council elections are coming. If you don't like what the council is doing - either with cuts or taxes, vote them out. All it takes is for you to pop into a village hall, school, etc on the way to the pub on a Thursday night.
Richard Crossley, Ireland, Ex UK

People say 'use your vote' to remove the councillors who impose high council tax rises. Unfortunately this is not possible for some reason. What chance is there for removing Labour councillors in say, Wigan? Also with so many people who don't pay any council tax at all, they are going to continually vote for the party that makes sure other people pay for their services.
Peter, UK

It wouldn't be so bad if it was the only the rise in council tax. The London Borough of Haringey is also increasing the rents by adding service charges for e.g. "street cleaning" (a service that is covered by council tax).
Alex Keel, UK

Let's just hope we don't have to suffer regional assemblies
Martin, UK
I too, am of the belief that council tax is mainly there to benefit the local council rather than the local community. Let's just hope we don't have to suffer regional assemblies with another raft of 'jobs for the boys' that the British taxpayer has to subsidise. The amount we have to pay for our politicians, both local and national, is beyond a joke.
Martin, UK

Well there would have been no real problems if we'd have stuck with a more sensibly organized Poll Tax. Everyone uses the same services rich or poor, if you use over a deemed reasonable amount then you should pay the increase otherwise pay the same! Everyone!
Rob, UK

Firstly I wish people would stop whining that the nasty rich people exist to be taxed. In the last two years my salary has gone up by 3% total. Last year my council tax went up by about 19% and I have another 15% or more to look forward to this year. In exchange for my �1500 or so I get my rubbish collected and the mayor gets a nice chauffeur-driven BMW 7-series. The way things are going it soon won't be worth working at all in this country.
John B, UK

We cannot stand by and allow the further decline of our poorest areas
Fred, UK
I'm a Londoner and not bothered by the new tax system. I do believe we are subsidising the North but then that's what tax is about - distributing wealth to where it is most needed. I've been up north many times and quite frankly I was shocked to see how bad it is. It's almost like a different country. We cannot stand by and allow the further decline of our poorest areas. It will only encourage further migration to the South and then even worse conditions up North.
Fred, UK

Stop whingeing about council tax rises. It's your fault as you elected the councillors either directly or indirectly through not voting. If your tax has gone up exorbitantly vote them out.
Charles, UK

Why do councils spend a fortune (millions) a year per council on tuition projects and schemes to educate people in things like IT etc, when graduates can't get the jobs these schemes are supposed to attract! Perhaps the money would be better spent helping new businesses!
Anon, England

The implication of my bill is that I will soon be giving over one and a half month's wages to the local council in order for them to keep my street covered in muck, lightless, busless and policeless! A bargain!
Band D mug, Cambridge, England

I get so angry when I hear about council tax. I am a tutor and despite what people think as I am temporary I actually received a 50p pay rise over the last 3 years! How are we supposed to afford increases in council tax when our wages are so poor?
Carole Webster, United Kingdom

Of course it is unfair! The whole system is unfair. It was designed by the Thatcher government to be unfair. I pay the same on a modest house as someone with a mansion. Further even though I am single I pay �750 a year, after a 25% reduction for being single, but the four people in a similar property next door to me only pay �250 each! What is fair about that? I am glad though that we are calling it a Council Tax and not the Community Charge. It was never a charge, it was always a tax, a Poll Tax. Even if I am not living in the UK - I have to pay this tax. Bring in a local income tax. The only people against this are the well off.
Ian Hill, UK

Our council taxes in Scotland are not as high as the rest of the UK. But why should they be high anywhere? If the councils would take more care of the budget they get, then we wouldn't need to increase council tax by more than the rate of inflation. But of course the Labour Government will look after the areas that will vote for them next time - heaven forbid.
Tony, Scotland

The south has some of the highest rents and property prices in the UK
Lena Asonitou, UK
It is very depressing to see the continual increases in council tax with no benefit to the council users. The south has some of the highest rents and property prices in the UK. When are they going to realise that we just cannot afford to pay any more money for declining services? Some of us are considering leaving the country all together. The standard of living here is amongst the lowest in Europe. Stop penalising us for working hard!
Lena Asonitou, UK

A multi million pound project to improve roads in Hampshire and Berkshire has been abandoned but council tax is rising at an alarming rate. More money going out of our pockets but services and facilities remain the same or deteriorate. It's disgusting!
Stefan, UK

The UK has the lowest percentage of a local authority's income actually provided by local tax (Norman Lamont's 2.5% on VAT to reduce the community charge being the final straw). So if councils want to increase spending by 1% they have to increase tax by around 5%! Local taxes should be a much greater percentage of what councils spend, and hence council taxes should go up even more, but central taxes should go down to compensate.
Brian Blackmore, UK

The Band D council taxes in the north (at least in Stockport) have been over �1000 for some years now. The problem is that in the north, when houses were valued, there were more in lower bands than in the south (3 bed semi in Stockport is band D but in Wembley is band E) therefore the council tax on a band D house in the north has been higher than that in the south to raise the same amount. Those in the south should feel lucky that they have been getting away so lightly for so long. The whole system is totally wrong as it is open to manipulation by government and councils. I say scrap the central government contribution, lower income tax and bring back the Community charge.
Roger Jackson, England

Remember the good old days of the Poll Tax. This is a Poll Tax but with a different name, just remember to do something about it at the next local elections....!
Paul, UK

What exactly do I pay council tax for? In my opinion local government is nothing more than a huge big scam. I see very little benefit for the amount of money I give them. My bills rise but my so-called services get cut. How can this be anything but a scam of the highest order?
Iain Alexander, UK

I work in a low paid job, got a 3% pay rise (the rise in National Insurance will take care of that). So I have got to find a 20% rise in my council tax from what I already earn. I can't drive into the centre of my town (London) without being taxed, I can't park my car in my road without being taxed. I have suffered back door tax rises in all of the last budgets, whether Labour or Conservative. I could go on but I hope you get my point.
Paul, UK

It is a very unfair tax, it penalises the rich and poor indiscriminately. Another stealth tax as a result of underfunding to the councils from the Government. Where is all the extra money I have been taxed over the years gone? I see no improvement in local services, if anything they are poorer but the tax keeps rising and rising.
Duncan, UK

The south isn't directly subsidising the north. Central government is just giving more to the north, and therefore leaving councils in the south a little less well-off. I'm not sure I agree with it but they need to find the extra from somewhere. I'm from the north originally, and like most northerners, I believed those 'down south' had good jobs, nice cars and plenty of money. The reality is quite different - they are generally no better off (the higher wages are more than cancelled out by the huge house prices/rents). Living in a once over-invested area doesn't mean they personally have lots of cash in their wallet!
Alison, Reading, Berkshire, UK

I am very disillusioned with the way local government can raise rates every year. Where will it stop? The total number of taxes we are paying is getting out of hand. All police, schools, rubbish collection etc could be controlled from central government. I have noted my local council employs people to pick up litter around the streets. Why not employ them to prosecute people who drop litter? Towns could use their CCTV cameras to do the same. The country needs cleaning up and the councils are failing to do it.
Alan, UK

Now that the government is levelling the score the southerners are crying foul
John, UK
How on earth can the south be subsidising the north when here in Bradford we are receiving 10% council tax increases? The south for years has been receiving far greater handouts than those in the north and now that the government is levelling the score the southerners are crying foul about it.
John, UK

Why don't we have a system of local income tax instead of the current flat rate charge based on the value of your house? Surely this would be fairer?
Chris, UK

Living in Surrey, council tax is one of the highest rates in Britain. I live in an ex-council property and can barely afford the bill. Whilst I understand that I live in a cash rich area I can't help but feel anguish that my hard-earned cash is not being put into projects in my local area.
Sarah, Surrey

Local elections historically show a poor voter turnout. The answer to all these disaffected people complaining about council tax is this - the next elections are in May so use your vote! Trouble is, we've got an absolutely pathetic opposition who waste their time in-fighting over trivia, while the country goes down the toilet.
John, London UK

Taxing the South for this purpose is wrong
Mark Coker, England
As a northerner living in the south I believe I am in an ideal position to comment on this matter. When Labour first came to power they claimed that they would invest in the north and this is the correct thing to do. However, taxing the south for this purpose is wrong. The government should be encouraging business to move north either by lowering taxation or giving subsidies. The council tax for Hampshire where I live is already too high.
Mark Coker, England

My council tax has risen by over 10 per cent a year for the last three years, so will someone please tell me where I am supposed to find the extra money from?
Anon, UK

Good. I think council tax should go up - particularly in London. There should be discounts for critical/ public sector workers (no, I'm not one of them, I work for a bank). London needs to be more expensive to control the demand for people living here.
Sally-Anne, London, UK

I find the rises in council tax alarming. In this part of the country they are estimating a rise of 18% which I for one cannot pay. I work part-time, a single mum to two children and struggle with rent and tax now. It frightens me how I am going to pay as I honestly can see no way round it. I feel let down by this government over this and many issues.
E. Vermillio, England

If you want better local services you are going to have to pay for it
A Legge, UK
Council tax money is raised locally for local services. If you want better local services you are going to have to pay for it. The necessity of London weighting means council workers in London cost more. Updating services which have received inadequate funding costs money. Paying agency workers and temps because people on lower wages cannot afford to live in some areas, costs money.
A. Legge, UK

I do not see how the south is subsidising the north. I live in a little town called Shildon in County Durham. My family and I live in a band A house and our council tax is going up to �900 a year. That is for a BAND A!!!! house. We will be paying nearly more than the people living in the city of Leeds are paying for a band D house. We do not have the big shops, or much to show for what justifies this HUGE amount. We do subsidise the council-run Civic Hall, which for years has run as a huge loss making business. How can the south be subsidising US????
Tracey Honeyman, United Kingdom

My friend, who is a local councillor, says that the council doesn't even carry out 50% of the duties it is compelled to by law. In particular he is disgusted the way all councils have cut back services to the old and disabled, closing desperately needed old folks homes and day-care centres to keep the increases below 13%. And then the national government wonders why there is bed-blocking in the NHS.
Tony, UK

Government policy is a major cause of cost increase
Jeremy Blatchford, North Somerset, England
I am a member of North Somerset Council. There is a national target level for Band D set by government. We get 62.7% of our total budget from central funds - national average 73%. We have a disproportionate number of elderly people on fixed incomes and a very large number of low paid waged. In my ward I have extreme wealth and poverty living within yards.

Government policy is a major cause of cost increase. We are under-borrowed but must have a PFI for schools and not borrow money 1% of our increase. Another 1% is on Best Value reviews that contribute very little. Every department spends a fortune on writing government plans, which they never fund. They are now withdrawing funding on some projects, like road and rail improvements.
Jeremy Blatchford, North Somerset, England

The south is definitely not subsiding the north. I live in Calderdale and my council tax rate is going up by 40%.
Liz, England

The problem is that council tax is a relatively small proportion of councils' income. Unfortunately, it's the only one under their control; the rest is fixed by the government, so small percentage increases in expenditure are multiplied. If the government cut the proportion of the total they (directly or indirectly) control, the council tax payer gets it in the neck.
David, UK

Council tax where I live is going up by 20%. This is more than inflation. Also there have been cutbacks in services in Walsall and it all goes towards the council workers' salaries which they do not deserve. And where will the rest of the money go? Probably to asylum seekers.
Ex-Labour supporter, Walsall, UK

We need a revolt against all these policies.
Love Kisslay, UK
It is a disgrace that it has become almost accepted among the councils that it is usual to raise the council tax year upon year way above inflation. I think it might come to the point when the councils and the government will take away all the money we earn and provide us farcical benefits, pathetic schools and more pensions and better salary for themselves. Why would not today's politician not look good? He has never had it so good living among a compliant and ineffective public. We need a revolt against all these policies.
Love Kisslay, UK

I live in Liverpool and until two years ago I paid the highest council tax in the country! and now it set to rise again. How And why?
Andy, UK

Year in, year out, our council tax has risen at twice sometimes three times the rate of inflation. If councils were a business they would have gone bust years ago. It's time to abolish local taxes and roll it into income tax.
Andrew, UK

The increases are approved by democratically elected councillors. If people don't like the rises then they ought to weigh up the pros and cons of voting for such councillors at local election time. Sadly, however, many of these councillors have no comprehension of financial/business matters and are therefore unable to make informed decisions when asked by professional council (Treasury) staff to vote on council budgets. Perhaps we should ask to see candidates' qualifications when voting time comes around.
Dave Hough, UK

I say it's about time the south began subsidising the north as it's been the other way for centuries. The industrial north kept the effete south going from the industrial revolution until the 70s and has suffered disproportionate deprivation throughout. Perhaps if the nation's jobs and wealth were evenly distributed this wouldn't be necessary.
Pip, Yorkshire, UK

I'm quite happy to pay more council tax
Lucy, 'down south'
I'm quite happy to pay more council tax. My council does a pretty good job of collecting rubbish and policing the streets. If the council needs the money to improve schools then fine, I'll willingly pay up. As for the south subsidising the north, it has done for years and to my mind a bit of wealth distribution is a healthy thing, although I'd feel more inclined to smile about it if bigoted northerners didn't bang on about 'effete' southerners and wrongly assume that everyone south of the Watford Gap is rolling in cash.
Amy, originally from Yorkshire, now 'down south'

The south has been subsidising the north for years. Each year London actually pays �20bn more tax than is spent in London. I think that is fair, but council taxes should be a local thing and not a mechanism for north/south redistribution of wealth. That should be done through income tax.
Tom, UK

Wherever you happen to live the rise in council tax is obscene
Craig, UK
Wherever you happen to live the rise in council tax is obscene. I thought there was a government body called the monopolies and mergers commission who's job it is to prevent monopolistic organisations from forming and thereby charging whatever they want for vital services? If so, how did the concept of a local council get past them?
Craig, UK

If council tax rises really are making people move to the North away from the overcrowded south, surely this is a positive thing? For too long, there has been a tendency for the South to be seen as the place where everyone should be, contrary to common sense. A more even population distribution would be in everyone's benefit. Also, I think the complaints about council tax rises show how hypocritical people are. Everyone protests when another library or hospital closes, and claims to be prepared to pay more taxes to keep these things open. Then, as soon as councils take them at their word, they back off and whine about paying more tax. No wonder so many politicians take advantage of the situation and try to make us believe we can have more public services and less tax!
David Hazel, UK

I am young and admittedly a little naive to this, but isn't the point of council tax that it goes to your own local council, not some national pot, hence the name 'Council' tax?
Rob Alcroft, UK

More to the point, our council tax is paying for our local fanatical councillors to spend millions on schemes which they brazenly admit are designed to slow and disrupt traffic flow in Bristol as a deliberate policy to inconvenience the car driver. Rubbish collection and libraries can go hang as far as they are concerned provided they are able to play political games with their defenceless residents.
Kate, England (Bristol)

If the south continues to benefit from better facilities such as national football stadiums and bigger airports (against the support of much of the population), why should the north and Midlands pay the same national taxes?
Mike Sheldon, UK

The council tax is there to fund the services of the council that serves YOU. Not for distributing around the country so that Labour does not lose its traditional voters, and also NOT for funding every hard luck case that presents itself to our authorities when arriving from Eastern Europe. We are getting screwed wherever we live in this country - and a backlash is welcome.
Scooter, England

The majority of people in the south-east are not high earners yet we are faced with ever increasing house prices, congestion charges and now higher council tax charges. Ordinary people are simply being priced out of the towns and cities they grew up in.
Sarah, UK

Is this the same south with all the jobs, where all culture is centralised, where wages are higher and the vast majority of the country's wealthiest people are concentrated?
It's a fallacy that all the south is rich
Rob, UK
After the recent changes, the south will be subsidising the north. It's a fallacy that all the south is rich, and I know in my area, the richer areas will be subsidising the poorer areas local too. It's interesting that before the reforms happened there was very little press about the planned changes, and everybody is up in arms, after the horse has bolted.
Rob, UK

Never mind the arguments about the "affluent" south subsidising the north, what I want to know is if Wandsworth council can provide its services for a band D rate of �402.56, why does almost every other London borough charge more than double this?
Alan, London, England

We pay for their inability to manage their budgets correctly. I work for a very small engineering firm and over the past few years we have had to reduce our prices to keep the orders coming in. We cannot arbitrarily apply price increases year after year. We are struggling to absorb the rises in council tax, insurance premiums and all other enforced payments. Had we seen improvements in any of the services it would at least make the bitter pill a little easier to swallow!
Sally Marshall, UK

I've never really understood the point of much of the expense of local councils. Why can't schools, police and rubbish collection be more efficiently organised by central government?
Jonathan Kelk, Worcester, UK

Why do we accept a tax on living?
Shauna, Norwich, UK
Salaries haven't increased by double-digit percentages, why should the tax on living increase by that amount? I asked Norwich council what services I can expect to receive for them charging me �1,000 a year. They were unable to tell me. Why in England do we accept not receiving basic customer service? Why do we accept a tax on living, especially when we are not told what we will receive in return for it? This is making me think twice whether Britain is the right country for me.
Shauna, Norwich, UK

Well, seeing as the only jobs going in and around the Yorkshire area are low-paying call centre jobs, us northerners can't afford to pay as much tax as you high earners in the south. I have an IT degree yet I'm having to make do with a job paying �12,500 a year. Never mind council tax, I can't even afford a mortgage!
Jim, England

Considering the north was massively underfunded for decades to subsidise the south I can't say I'm at all sorry. What goes around comes around.
Graham Haywood, Sheffield, UK

How should we take a double figure percentage rise when we are told inflation is only 2%? I'm sure councils will blame central government and visa versa, but at the end of the day it is everyone else that pays. Is there nothing that can be done?
Steve, England




SEE ALSO:
Council tax bills to soar
05 Mar 03 |  Politics



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