Saturday 3 January 2009
Council Tax to rise 2.81%
Brian Coleman recently wrote in his Barnet Press column: "As for New Year's resolutions for both the country and individuals - it should be to reduce debt and live within our means". I agree with that entirely. But for thousands of families in Barnet, especially pensioners, that task is made a little bit harder with the news that Mike Freer is proposing to raise Council Tax by 2.81%.
This figure is disclosed in his Budget Headlines Report, which will be discussed by the Cabinet on Tuesday. Regular readers of this blog will know that the discussion will amount to no more than adulation for our glorious leader and supine acceptance of his proposals.
Given that no councillor banged the gong more enthusiastically than Freer for zero tax rises, his failure to deliver once in the top job is a bitter disappointment to those who previously supported him.
The rise is being kept down to “only” 2.81% because the council is taking £1 million from reserves, otherwise it would have been 3.49%. The Borough Treasurer’s report states that any drawing from reserves has to be repaid next year. So just as the Labour government is shamelessly mortgaging our future for the sake of Gordon Brown’s political career, Mike Freer is seemingly following suit to improve his election chances. It won’t worry him that council tax will rise in 2010 by more than would otherwise be the case because by then he won’t be leader any more. It will be his colleagues who have to pick up the pieces.
The Borough Treasurer, Clive Medlam, reports that reserves have fallen 16% in the last year which makes the decision to draw a further £1 million even more reckless. Who can forget when the Conservatives lambasted the previous Labour/LibDem Administration for running down the reserves in 2002?
Medlam has also repeated his warning that the level of borrowing the council has incurred since 2004 cannot be sustained indefinitely. By 2010/11 it will be costing us £13 million a year in repayments.
What is particularly interesting about this comment is that it was Medlam who borrowed £70 million in 2006, £28 million of which is now missing somewhere in Iceland. Mike Freer has claimed ignorance regarding these loans, but is it credible that the Chief Financial Officer would be borrowing such vast sums of money whilst simultaneously issuing warnings about the council’s debt level, without the Leader knowing?
No doubt the council will boast that this latest rise in council tax is below the rate of inflation, and indeed it is…for now, at least. But it is a double whammy for pensioners who have previously relied on investment income to help pay their living costs. They will be forced to dip into their capital to pay this tax rise as the income from their savings dries up due to falling interest rates, thereby eroding their capital further.
But the bad news does not end there. According to the appendix to the report, council tax will rise by a further 3.5% every year from 2010 to 2013. Given that inflation is set to fall drastically this year - with deflation a distinct possibility - it is time for the real Conservatives on Barnet Council to wrest control of the budget from the Brownite Freer and instil some tough fiscal disciplines, so that zero tax rise becomes a reality and not a leadership election gimmick.