William Eichler 06 September 2017

Council chiefs hit back at ‘stealth tax’ accusation

Council chiefs hit back at ‘stealth tax’ accusation

English councils are imposing ‘stealth taxes’ on residents, think tank claims, but council chiefs argue they are bringing in millions less from fees and charges than five years ago.

A new report from the TaxPayers’ Alliance accuses local authorities in England of imposing ‘stealth taxes’ on residents by charging more for services, even in instances where they have been reduced.

In an analysis of more than 22 services, the free market think tank found the charges and fees for some of the most visible services, such as waste collection, had ‘rocketed’, with their proportion of total service expenditure rising from 8.7% to 9.6%.

Fees and charges for waste collection, for example, have increased, despite many councils curtailing the number of bin collection days. Charges to individuals rose 37% between 2010 and 2016.

There were increases for cemetery, cremation and mortuary services during the same period as well. While the number of deaths rose by only 6.5% in England, sales, fees and charges still increased by 19.8%, to £291m in 2015-16.

Similar increases also occurred in airports, harbours and toll facilities (109% between 2015-16), and trade waste (12%).

‘These are considerable rate rises which will hit residents in England hard,’ said TPA chief executive John O’Connell.

‘In many instances people are being asked to pay more for services that have actually been reduced, such as fortnightly bin collections.

‘Councils should ensure that they cut out all wasteful spending before asking taxpayers to pay big fees on top of their Council Tax bill.’

The think tank did, however, acknowledge that some of the services they looked at saw a reduction in fees.

Responding to the report, Cllr Claire Kober, chair of the Local Government Association’s (LGA) resources board, said: ‘This report clearly shows that councils receive almost £500m less in income from fees and charges than they did five years ago.

‘Faced with escalating costs and unprecedented funding cuts since 2010, this is a tremendous effort by councils to keep fees and charges low for hard-pressed residents.’

Cllr Kober also added that the ‘bigger picture’ was that councils face an overall £5.8bn funding gap by 2020.

‘Even if councils stopped filling potholes, maintaining parks and open spaces, closed all children’s centres, libraries, museums, leisure centres, turned off every street light and shut all discretionary bus routes they still would not have saved enough money to plug this gap by the end of the decade,’ she said.  

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