Wirral Labour’s 2% Council Tax Rise branded “excessive” by Pickles

Wirral Labour’s 2% Council Tax Rise branded “excessive” by Pickles

Wirral Labour’s 2% Council Tax Rise branded “excessive” by Pickles


The Labour run Wirral Council have previously stated in public that they will not set a budget for 2014/15 that includes a Council Tax rise that would trigger a referendum. Published today the government has set the threshold that triggers a Council Tax referendum at 2%.

Labour’s budget for Wirral Council currently assumes a 2% Council Tax rise, therefore for Labour to avoid a Council Tax referendum it will have to be altered to result in a Council Tax rise below 2% at the next Cabinet meeting to consider the 2014/15 budget. Options presented to the next Cabinet meeting are for a 2% Council Tax rise (now seen as unlikely considering that the Labour administration has stated they wish to avoid a referendum), a 1.5% rise or a 1% rise. Choosing the last option would mean that Wirral Council qualifies for a Council Tax Freeze Grant from government covering the cost of a 1% increase which would effectively freeze Council Tax at last year’s level.

The Rt Hon Mr Pickles MP has encouraged people to go to Twitter and use the hashtag #freezeplease to express their views to their local Council on Council Tax rises. He said, “Council Tax bills more than doubled, pushing the typical bill to a £120 a month from hard-working people and pensioners. Council Tax became a big worry for those trying to balance family budgets. This government has been working to give families greater financial security, taking action to keep Council Tax down.

We have given extra funding to town halls to help freeze Council Tax and handed local residents new rights to veto big local tax hikes, so local people have the final say on the amount they pay.

Since 2010, Council Tax bills have been cut by 10% in real terms across England and people haven’t been facing the threat of soaring bills. I would urge councils to take up the offer of additional funding to help freeze Council Tax this year to help their residents with the cost of living.”

It seems highly unlikely that Wirral Council will accept Pickle’s offer of a Council Tax Freeze Grant (although Cllr Phil Davies has now said he’ll consider it if it forms part of the base budget), or now go for their preferred option of a 2% rise as setting an increase this high would now trigger a Council Tax Referendum on the same date at the combined local and European elections (22nd May 2014).

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Rt Hon Eric Pickles MP, Parliamentary ping-pong, “democracy dodgers” and the £556,789 in “forgotten cuts” at Wirral Council

Rt Hon Eric Pickles MP, Parliamentary ping-pong, “democracy dodgers” and the £556,789 in “forgotten cuts” at Wirral Council

Rt Hon Eric Pickles MP, Parliamentary ping-pong, “democracy dodgers” and the £556,789 in “forgotten cuts” at Wirral Council


Shortly before Christmas Wirral Council had a “budget options” meeting after the What Really Matters consultation. At this meeting cuts, based on the public response to the consultation for 2014/15 were in principle agreed to. Strictly speaking it was a new budget and policy framework that was agreed to. The budget for 2014/15 is to be decided in March 2014, based on the assumption that Council Tax on Wirral would rise by 2% in 2014/15.

So just to recap, the Labour administration have ruled out a Council Tax referendum. The reason they give is that the large cost of the referendum that would fall on Wirral Council (if you can remember the amount they quoted please leave a comment about what it was and who said it). This is despite the law (The Local Authority (Referendums Relating to Council Tax Increases) (Date of Referendum) (England) Order 2013) that states a Council Tax increase referendum would have to be held on the 22nd May 2014 (the same day as the joint European & local Council elections). I’m not sure if the estimated figure a councillor quoted last year for a Council tax increase referendum took into account the reduced cost of the referendum due to holding other elections on the same day (or whether the cost quoted assumed the referendum would be held separately to other elections in which case the estimate is too high).

Labour’s budget assumption therefore assumes that Council Tax will rise by 2% (without the need for a referendum) to lessen the need for further cuts they’d have to make if the rise was any lower or Council Tax was kept the same. The Labour administration have also ruled out accepting a Council Tax Freeze grant equivalent to a 1% rise if they agreed to keep Council Tax the same as last year.

However Rt Hon Eric Pickles MP has different plans and according to an article last week in the Guardian based on leaked Cabinet letters wants to reduce the threshold to 1.5% and refers to councils that rise Council Tax by only two percent as “democracy dodgers” and “believes they need to be punished to show the government is trying to control the cost of living”. Furthermore Pickles states “he wants to stop councils or police bodies being able to exempt some spending from the cap.”

This article in the Bristol Post before Christmas also quotes the Rt Hon Eric Pickles from a statement in relation to council tax increases “as being particularly open to representations suggesting that some lower threshold be applied to councils, given the strong need to protect taxpayers wherever possible from unreasonable increases”.

So what has this got to do with Parliamentary ping-pong? Well the Local Audit and Accountability Bill is heading to its next to the last stage (starting on 21st January) called “parliamentary ping-pong” before the last stage “Royal Assent” and it becomes law. Crucially the section on Council Tax referendum calculations (s.41) comes into force (see s.49) when the act receives Royal Assent and changes the formula of how a yearly Council Tax increase is arrived at.

In future once the Local Audit and Accountability Bill becomes an Act, the calculation of Council Tax rise includes not just Wirral Council’s share of the Council Tax bill, but also (if I’ve read the bill correctly and please leave if a comment if I’m wrong) the other levying bodies that form part of Council Tax bills too. This means the yearly increase in Council Tax requirements in the budgets of the Merseyside Fire and Rescue Authority and the Police and Crime Commissioner for Merseyside would affect what the percentage increase would be.

It looks from the wording of the Local Audit and Accountability Bill (and a lot of recent regulations) that this will come into effect for the 2014/15 financial year. As the basis by which a Council Tax rise is calculated will change, £556,789 is my rough estimate of what changing the threshold from 2% to 1.5% will be as the true amount of extra cuts will depend on what the Merseyside Police and Crime Commissioner’s and Merseyside Fire and Rescue Authority’s Council Tax requirements for 2014/15 are.

At Wirral Council’s Coordinating Committee meeting (held yesterday at the time of writing), in item 8 (policy update), councillors on the committee will have read in their papers on page 2, under Implications for the Local Audit and Accountability Bill “Budget Strategy considerations may also be impacted by the changes to the Council Tax threshold for triggering a referendum.”

Yet curiously not one of the councillors of the fifteen on the Coordinating Committee asked how much changing the Council Tax threshold for triggering a referendum would affect the budget strategy considerations or to my recollection anything at all about how a change to the Council Tax threshold would affect the 2014/15 Budget.

So is this £½ million of cuts at Wirral Council that councillors seem to be unaware of going to result in a further twelve-week consultation (or will the responses to the What Really Matters consultation be reused)? If any of these further cuts require ninety days consultation with the trade unions will this mean that they will only be realised as part-year savings in 2014/15?

There does seem to be one concession the Liberal Democrats have received though. Any regulations the Rt Hon Eric Pickles MP decides to do with council tax increase referendums has to by law be also agreed with Rt Hon Nick Clegg MP first.

So what do you dear reader think? Will Cllr Phil Davies be saying of the Rt Hon Eric Pickles MP something similar to the famous Laurel and Hardy quote “Well, here’s another nice mess you’ve gotten me into!”. With exquisite timing, Wirral Council’s Labour administration will have to agree the budget for 2014/15 around the end of February 2014 meaning these extra cuts will probably feature in the local election period in the lead up to polling day on the 22nd May.

Certainly this apparent lack of a plan B will have to be explained when the Improvement Board returns in March. As the Rt Hon Ed Balls MP (Labour’s Shadow Chancellor) said last October about Labour’s economic competence, “we are going to win based upon our experience, our track record, our credibility”.

Oh and if you think the projected underspend of £884,000 will mean a further £½ million of cuts won’t have to be made in 2014/15 you’d be wrong.

£250,000 of the underspend will probably be agreed tonight to go towards the clean up and repairs to infrastructure in New Brighton following the bad weather. A further £519,000 of the underspend has been earmarked for future restructuring costs leaving (at current estimates) only a projected underspend of £115,000 that can count towards an estimated a £½ million of cuts required if the Coalition government reduce the Council Tax increase referendum threshold to 1.5%.

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Council Meeting (Wirral Council) (11th February 2013) Kate Wood made Honorary Alderman, Debates on Taxes and Spending

A report on the Council meetings (Wirral Council) of 11th February 2013 along with video footage of the latter. The first was an extraordinary meeting to confer the title of Honorary Alderman on Kate Wood. The second was a regular meeting with motions on local government funding, health, housing, elections, benefits, Area Forums, tax credits, payday loans, public sector contracts and Universal Credit.

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Above is the first 2 1/4 hours of the Wirral Councill meeting of 11th February 2013.

Unfortunately the day this finally uploaded, someone rang up my ISP pretending to be the bill payer (my wife) and cancelled the ADSL line (which took a week to set up with another provider).

Prior to the main meeting there was a short (well by Council standards fifteen minutes is short) Extraordinary Meeting to make Kate Wood an Honorary Alderman. As a slight legal footnote for the last two and a half years Wirral Council could also confer the title of Honorary Alderwomen as the last Labour government changed the legislation in 2010. The papers and minutes for that meeting can be found on Wirral Council’s website.

The main meeting that night was much longer.

The first controversial point (at least if you’re a Conservative councillor) was the recommendation from Cabinet for approval by Council that Cllr Steve Foulkes be the Deputy Mayor for 2013/14. However to avoid any long drawn out debate on the merits of Cllr Foulkes as Deputy Mayor, the matter was simply noted on the basis that it’ll be decided at the Annual Council meeting of the 13th May 2013.

As usual only three notices of motion were debated, the first being Labour’s entitled Unfair Cuts in Local Government Funding, along with a Lib Dem amendment.

The second notice was a Conservative motion entitled Council Tax Referendum along with a Labour amendment and Lib Dem amendment.

Around this point I ran out of battery as the meeting was by now two and a quarter hours long.

The last notice of motion debated was a Lib Dem motion entitled Council Finances along with a Labour amendment.

A few of the motions not debated were unanimously agreed (well unanimous except for the abstention of the Mayor) (Vascular Services Review (about moving vascular services from Arrowe Park to the Countess of Chester), “Health Homes” and the Case for Selective Licensing of the Private Rented Sector and Construction Industry Blacklists).

For the rest of the motions and objections there were splits in the vote among party political lines. The first was “Attack on Democracy in Wirral” – a Conservative motion against the move to four yearly elections from 2015/6, the second was “The Empty Rhetoric of Localism” – a Labour motion about Council Tax Benefit, Crisis Loans and Community Care Grants, the third a Conservative objection against abolishing Area Forums and calling for consultation, the fourth a Lib Dem objection to abolishing Area Forums calling for it to be referred to a group of councillors to make recommendations on, the fifth a Labour motion entitled “Cuts to Tax Credits” (as well as a Conservative amendment and Lib Dem amendment), the sixth a Labour motion on “Payday Loans” (as well as a Conservative amendment and Lib Dem amendment), the seventh a Lib Dem motion on “Tax Avoidance and Public Sector Contracts” (as well as a Labour amendment) and the eighth a Lib Dem motion on “Universal Credit” as well as a Labour amendment.

The meeting finished with a number of changes agreed to committee places, after the recent by elections and resignation.