Tuesday, 19 February 2013

Parish council tax precept frozen

A couple of weeks ago the parish council agreed to freeze the parish precept on council tax using the council's reserves to make up the difference.  The precept is how parish councils get the majority of their income and is included in your final council tax bill.  The police and fire service also apply a precept to your council tax bill.

To increase the parish council's precept by enough to cover expected costs would have been something like 40p a month for each household but instead the decision was made to spent a few thousand pounds out of reserves freezing the precept even though Telford & Wrekin Council intend to put council tax up again this year and that increase will be pounds, not pence.

Freezing the precept without cutting costs isn't sustainable.  At some point in the future the precept is going to have to be increased because even if the parish council cuts costs (and it has this year) inflation means things are getting more expensive all the time.  It's 40p a month now but in 2 or 3 years' time it might be £1 a month or £2 a month or maybe more.  Prices don't rise gradually in a straight line due to inflation, they go up exponentially like in the graph below because they go up by a percentage of the current price not the price from years ago.

By freezing the parish council's precept now we are storing up a bigger increase in council tax in the future.  To freeze it next year will cost more than this year and the year after it will cost even more.  Eventually it will become too expensive to freeze the precept and the costs will have to be passed on to residents or services will have to be cut.

I voted for an increase in the council tax precept for this year - the only councillor that did - because the amount of the amount of the increase was negligible and anyone so down on their luck that they'd notice the extra 40p a month is almost certainly in receipt of a council tax rebate anyway.  I don't think it is a good use of the council's reserves subsidising a freeze on the precept when the amount of the increase in question is the price of a packet of crisps.  The council's reserves are there for emergencies and with so much uncertainty around funding for local authorities at the moment it is important that the council doesn't spend them on something that isn't necessary.  I also said that I would like to see spending reduced so that the precept doesn't need to go up next year.