‘Fairer deal’ on council tax

North East leaders have called for a “fairer deal” for our region, amid reports that council tax could be scrapped, writes Local Democracy Reporter, Daniel Holland and James Robinson.

Andy Burnham has said there will be “big decisions” to come on the future of council tax and criticised the unfairness of the system.

However, Downing Street has since denied that the Prime Minister is actively considering replacing the charge and Mr Burnham has also ruled out axing stamp duty.

Senior political figures in the North East have long complained that the council tax system unfairly penalises people from more deprived areas, in some cases charging them more for an average family home than those in wealthier parts of the country are for a multi-million pound property.

Hartlepool Labour MP Jonathan Brash has been among the most vocal critics, pointing out  band A homes in his constituency are charged nearly 2.5 times more than the equivalent property in Westminster.

Newcastle City Council leader Colin Ferguson told the Local Democracy Reporting Service that he would support a review of a system he called “deeply regressive”.

The Liberal Democrat said: “I have said for a long time that we need a new way to fund local government and if this government is finally willing to grasp the nettle and look at the overall funding package for councils, that is a good thing.”

However, Coun Ferguson cautioned that any reforms must not leave his council worse off than it is today, saying Newcastle’s current funding settlement from Whitehall “doesn’t even come close to covering a full range of statutory duties, let alone the other discretionary activity we wish to do for our residents”.

He added: “It has to be a net positive settlement for us. But if it works well for the council and takes the pressure off local families, then it is worth having the conversation.”

Karen Clark, the Labour mayor of North Tyneside said: “I would welcome any reforms that make the way local government is funded fairer, giving councils like North Tyneside the stable, long-term funding we need to protect frontline services, invest in our communities and continue delivering for local people.”

Most councils in the North East applied a 4.99% council tax rise this year, the maximum allowed without a referendum being required.

Reform UK-run County Durham applied only a 1.99% increase. Its deputy leader, Darren Grimes, told the LDRS: “Scrap council tax by all means. But do it without equalising the funding formula, and you don’t end the injustice, you bake it in. Durham raises less, gets no more, and it’s our statutory services like Looked After Children and Adult Social Care that pay. I am not remotely convinced that Labour’s London and South East MPs would allow such a proposal to proceed.”

Glen Sanderson, the Conservative leader of Northumberland County Council, said he would prefer council tax to remain in place but local authorities given greater resources from Whitehall in order to bring down people’s bills.

He added: “Our Government settlement has been at or below inflation for many years and that would be fairer.

“I think it’s very early days. I would very much hope that Northumberland is recognised by the new Prime Minister and that we can build a dialogue that is useful for the 320,000 people who live and work here and the millions more who visit us.

“My door is always open to have a discussion with any minister or Prime Minister if it is in the interests of Northumberland. The important point is the council are keen to work with anybody that will help the people and this place.” 

Speaking to Laura Kuenssberg on the BBC’s Panorama programme, Mr Burnham said that some people in his former Greater Manchester mayoral area “pay a much higher council tax than people living in much larger homes in London”.

Mr Burnham added: “We need to honour the manifesto upon which Labour was elected, and if I was to bring forward any changes, obviously people would rightly say, well, is this consistent with that manifesto?

“So there are big decisions ahead, you are right about that.”

However, Downing Street later said it was untrue that the PM was actively considering removing council tax.

Mr Burnham also told reporters on Monday that reports that he planned to scrap stamp duty “won’t be happening”.