Wiltshire Council Tax rises

With the aid of the government's 'Council Tax Freeze Grant', Wiltshire Council has been able to avoid any rises on its own precept this year. However WC is putting pressure on parish and town councils to put theirs up.

Changes to the Council Tax benefit system mean that the effective tax base of parish councils is reduced. This is because the number of houses deemed to be paying council tax is less, as those on benefits are not counted.

If for example a parish council used to have 1000 houses paying council tax and levied a £10 rate, it would have a precept of £10,000. Under the new system it may find itself counted as having fewer houses - say 950. So the £10 rate would raise £9,500.

(For calculation purposes a 'Band D equivalent' figure is used, which averages out the differences in council tax bands)

The changes were made last year, but WC then funded the gap between the new and old levies for each town and parish. This year they don't want to do that, so parishes will have either to accept a lower income, or to raise their level of council tax, or a combination of both. The imaginary council mentioned above could get by with £500 less, or put its precept up from £10 to £10.53 to keep its income the same.

A further complication is that the government doesn't understand real numbers and can only think in percentages. The 53p increase is a penny per week and most residents wouldn't mind paying that for local services. However it's also a 5.3% increase, which the government thinks is outrageous. Ministers are muttering about introducing a cap on parish council spending of 2%. Any PC wishing to do a 5.3% increase might be forced to hold a referendum, which could cost far more than the money raised.

It's worth noting that the Blair government, which had a reputation for micro-management, never interfered with the freedom of parish councils to set their own budgets. This government, which prattles about localism, is threatening to do so.

WC will this year get another government grant which allows it to fund two thirds of the deficit. The proportion is expected to diminish annually until towns and parishes take the entire burden themselves.

Cabinet agenda page 73