Council tax frequently asked questions

Why is the council's band D council tax above the national average?

Firstly it must be stressed that inter authority comparisons are largely ineffective because each authority has different needs, varying levels of government support and also varying types of property, all of which distort comparisons.

National figures for 2014 to 2015 reveal that the headline band D council tax charge for Salford's residents is ninth highest of the 36 metropolitan district councils. However, band D is merely a reference point to determine the tax for all other bands. The majority of properties in Salford are within the lower valuation bands and a more meaningful comparison would be based on the average council tax per dwelling for the area. Using this basis the charge to Salford's residents is 25th highest of the metropolitan district councils and the 328th highest of all the 354 authorities in England.

The council is committed to keep council tax rises to a minimum and this is supported by the fact that the 2013 to 2014 council tax has been frozen for the fourth year and is at the same level as in 2009 to 2010.

Why have past council tax increases been higher than the rate of inflation?

Almost 59% of the council's revenue budget is funded from government grants. This is in addition to the funding for schools, which is provided by the government from a dedicated schools grant. The amount of government grant is determined by what the government can afford to spend allocated to authorities on the basis of the government's assessment of its spending needs. The council has always argued that the system that the government uses to allocate its grant is not suitably responsive to accurately reflect the needs of the council.

It should also be noted that the system the government uses to calculate the distribution of its financial support to authorities is determined wholly by an assessment of perceived needs using a number of complex criteria. Under these arrangements the council would be entitled to additional grant of £900,000 in 2010 to 2011 however, the government has clawed this amount back to allocate to other authorities to ensure that each authority gets a minimum 1.5% increase in its funding.

Council tax therefore funds only 41% of total council expenditure. This means that every £1 spent above the grant paid by the government falls wholly on council tax payers. This is known as the gearing effect because every 1% budget increase more than government funding means an extra 2.4% on council tax. The council has little or no influence on the amount of government support it receives.

The level of government grant support in 2010 to 2011 has fallen short on what local government was seeking and indications for future settlements are for even tighter settlements from the government. We believe that the level of grant is insufficient to meet the growing demands on services, in particular children's and care related services.

Why is there no rebate for people on pensions?

Currently there are only a very small number of local authorities that apply a pensioner council tax rebate scheme. Many local authorities have considered the possibility of adopting such a scheme and legal advice has been sought on its eligibility. A leading Queen's Counsel warned that although a pensioner rebate scheme would be within the law, there would be a risk of legal challenge from other groups seeking a discount. Generally local authorities have reluctantly decided not to take further the plans to introduce the scheme.

It should also be stressed that many pensioners and pensioner organisations have said that although they do need financial help, this should come from the government and not from other local residents, who would face an increased council tax to enable pensioners to receive special help. The council will continue to monitor the position and consider the implications should a scheme be considered feasible.

One area that the council has protected pensioners in is the recently introduced council tax reduction scheme which effectively replaced council tax benefits. Since April 2013, everyone of working age has been expected to pay something towards their council tax bill. In Salford, from April 2014, this will mean at least 12% of the bill. Pensioners will still be able to get up to 100% of their bill paid depending on their personal circumstances.

Why should I pay extra for non-collection from others?

By legislation the council is required to calculate and collect the level of council tax sufficient to cover its budget needs after allowing for government contributions.

The net amount required is then divided by the council tax base, which is basically the number of chargeable dwellings in the city. The tax base is calculated in accordance with government regulations and it includes an allowance for non-collection.

Whilst it is the intention of the council to keep the level of non-payment to a minimum possible by the efficient use of collection procedures, it is not possible for this or for that matter any large organisation to collect 100% of its charges.

Regrettably the amount most of us pay for national taxation, gas, electricity, mortgage, rent and virtually all goods and services has to include an undisclosed amount in respect of the non-payment by others.

The council does not knowingly accept non-payment from any of its council tax payers. Rigorous collection procedures are in place including the use of court proceedings, enforcement agents, attachment to earnings and ultimately a custodial sentence. The collection of outstanding amounts will be subject to these measures.

How much do I pay to cover the non-payment of others?

By legislation the council is required to calculate and collect the level of council tax sufficient to cover its budget needs after allowing for government contributions.

The net amount required is then divided by the council tax base, which is basically the number of chargeable dwellings in the city. The tax base is calculated in accordance with government regulations and it includes an allowance for non-collection that for 2010 to 2011 is 2% and adds £30.47 to the total charge for a band D council taxpayer.

In addition, each year the council reviews the actual level of collection and compares it to that anticipated in the budget. A surplus collection will reduce future council tax levels whilst a shortfall will increase council tax levels.

Why should I pay for services I don't use?

The council tax is a form of taxation and is designed to contribute towards the overall running costs of the local authority. It is not directly related to the delivery of specific services. This is important as the council provides a wide range of services to the people of Salford. Some of these may never be used directly by individual residents but nonetheless they are important to the overall well being of the city. The extent to which residents benefit can depend on their circumstances, eg age, health, finances.

It should be noted that it is the net cost of services that is covered by the council tax and this is after taking into account of income received from users of specific services, eg leisure centres, planning applications, etc. The council tax is a tax and not a charge for services. The method of setting the tax is governed by legislation to ensure that each council tax payer is contributing to the cost of all services.

Where can I obtain further information about the council's finances?

If you have any further questions about the revenue budget or the council's finances in general please email council.finances@salford.gov.uk or call 0161 793 3245.

This page was last updated on 12 February 2014

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