Contact: Jon Pittam, ext 7400

1 Summary

1.1 The Cabinet is asked to note the attached report on the enquiries and complaints received about the County Council's council tax and budget for 2003/04.

2 Reason(s)

2.1 To provide feedback on the public's response to the County Council's 2003/04 budget and to the increase in the County Council's council tax of 15.0%.

3 Other options considered and rejected

3.1 Not applicable.

4 Conflicts of interest declared by the decision maker or a member or officer consulted

4.1 Not applicable.

5 Dispensation granted by the Standards Committee

5.1 Not applicable.

6 Reason(s) for the matter being dealt with if urgent

7 Not applicable.

Approved by: Date:

Councillor T.K Thornber, C.B.E.

Contact: Jon Pittam, ext 7400

1 Summary

1.1 This report summarises statistics on the letters and telephone calls received as a result of the County Council's 2003/04 council tax and budget. It includes enquiries to Information Centres and the County Treasurer's Department, but not those made directly to County Councillors. It also summarises the comments received during February and March 2003 as part of the "Hands Off Hampshire" campaign.

2 Background

2.1 The Hands Off Hampshire public awareness campaign highlighted the possible implications for Hampshire residents of the Government's proposal to change the way it funds local councils. The campaign asked for opinions on the 15% increase in council tax that was necessary to maintain services, after the Government awarded Hampshire the lowest grant settlement of any county for 2003/4.

2.2 The actual tax increases in 2003/04 are:

2.3 The County Council provides a budget leaflet to accompany every council tax bill issued by the district councils to the 500,000 council tax payers in Hampshire. The leaflet tells people how to contact the County Council if they require further information about the budget, including a postal address, a telephone number and an e-mail address. The public also contact the County Council's Information Centres with queries and complaints about the council tax. The more technical questions are answered by staff in the County Treasurer's Department.

2.4 Callers who expressed concerns that their point of view would be ignored have been told that their comments would be reported to the Cabinet.

3 Enquiries in 2003

3.1 Since the level of Council tax was set at 15%, 314 enquiries have been received, as analysed in the table below:

3.2 Many of the enquiries received by the Information Centres concern the person's own council tax bill, such as payment arrangements or their entitlement to benefits and discounts. These callers have been referred to the appropriate district council.

3.3 Most of the calls from people who wish to complain about the level of the council tax or were seeking further information about the budget were referred to the County Treasurer's Department. (The statistics have been adjusted to avoid double-counting calls passed on by the Information Centres).

4 Hands Off Hampshire campaign

4.1 The main concerns raised by the public in response to the Hands Off Hampshire campaign were:

· the injustice of government funds being diverted from the South to the North and the Midlands

· dissatisfaction with an increase above inflation and most people's salary increases

· the detrimental effect on the elderly, the young and those on fixed incomes

· the fact that it will deter recruitment and retention in Hampshire - as some people said they may be forced to leave the county

· that the Government is mistaken in believing that the South is affluent.

4.2 A far greater proportion of people blamed the Government for the large council tax increase, rather than Hampshire County Council. In fact, a few commented on the excellent services being provided by the Council. However, a considerable number felt that the County Council should cut their costs and / or services.

5 Concerns raised directly with County Treasurer's staff

5.1 The enquiries dealt with by the County Treasurer's Department represent the core of those that wished to raise points of substance and a more detailed analysis has been prepared of them. The number of enquiries dealt with by the Department in 2003 at 175 was significantly higher than the previous year's total of 95, although only a small proportion of the total number of council taxpayers. The trends are shown in the following table:

6 Questions asked

6.1 The 175 enquirers dealt with by the County Treasurer's Department raised 309 issues. Inevitably the majority of enquirers either had negative comments to make or were seeking further clarification. The issues can grouped into the following categories.

6.2 Some callers were clearly very angry. Points made by those complaining included:

· an increase of five times the rate of inflation is outrageous

· this is not just a one-off increase for 2003/04: council taxes have been increasing excessively for many years

· a shortfall in grant from the Government is no justification for making council tax payers pay more

· the County Council should cut its budget to match its income

6.3 A number of people felt that there were no discernable improvements in services following the high increases in previous years, in particular poor road maintenance was cited and practically all rural callers mentioned the lack of visible policing (although of course this is now the separate responsibility of the Hampshire Police Authority).

6.4 There was a strong expectation, particularly from those on low or fixed incomes that the County Council should be striving to cut bureaucracy and non-statutory services in order to mitigate their bills. A few people were critical about the Comprehensive Performance Assessment process because they assumed that to be "excellent" must require a lot of administration and therefore extra cost.

6.5 A number of callers wanted to know "Who should I vote for if I disagree with the increase?" as they feel that they should be able to pass judgement on the efficiency of an Administration at the ballot box.

6.6 Those who contacted the Government said that they were being told a different story about the reasons for the increase, leading to confusion and apathy.

6.7 Some examples of the points made by council tax payers who wrote to the County Treasurer are attached in Appendix 1. Also attached at Appendix 2 is a reply to a council tax payer who contacted all County Councillors, and deals with many of the concerns raised in this analysis and the verbatim points made in Appendix 1.

7 Rise in council tax

7.1 The majority of the queries were primarily concerned about the size of the increase in the council tax.

7.2 Although it is not possible to ask too many questions about callers' personal circumstances, some volunteered that they were pensioners or on fixed incomes whose total income, whilst not rising as fast as the council tax, is still above the threshold for council tax benefits. Few, if any, of the callers were from people on low incomes who were unaware of their eligibility for benefits. Other calls appeared to be from those more able to pay but who were less willing to contribute towards the costs of services for others.

7.3 There is some correlation between the number of complaints about the council tax over the last eight years and the size of the increase in the tax, as the following graph shows.

8 Analysis by district council area

8.1 The districts from which enquiries originated are analysed in the following table:

8.2 There are probably too few enquiries to extract a clear pattern from this table. In fact, one of the more "affluent" districts (East Hampshire) has generated the most enquiries per 10,000 taxpayers whilst Gosport is at the bottom of the table. Eastleigh generated the second most enquiries which may have been as a result of the number of callers seeking clarification about the size of the increase following the issue of council tax bills quoting an incorrect percentage increase.

Recommendation

1 That the report be noted.

Section 100D Local Government Act 1972 background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

N.B. the list excludes:

1. Published works.

2. Documents which disclose exempt or confidential information as defined in the Act.

Council Taxpayer's queries 2003/04 (CT/CF/F143a)

Appendix 1

Sample of comments received by County Treasurer's Department

" How can you justify this? I am sure very few people in Hampshire have seen their income rise by 15%, so this is going to bite hard. I expect the old reduction of central government funding will be trotted out as an excuse again. Well if you don't have the money, don't incur the costs. This is the practice followed by sensible people in their household affairs every day. I suggest you adopt a similar common sense approach."

"I wish to place my view on record with you that I think that this level of increase against a low background inflation is irresponsible and outrageous. To demand increased local taxation on families on this scale must indicate woefully inadequate control of expenditure and poor budgeting."

"For many years the increase in budget spend each year has exceeded the annual rate of inflation. To some this may be nothing more than a minor irritation, but to many, especially the pensioners, the increase means a form of purgatory. It seems to me that it is a basic duty of the Council to cut its cloth to match it's income - however difficult that may seem. If it does seem difficult , then think about the position of the pensioner who has no flexibility, but to cut food or clothing to make up for thoughtless or reckless increases by County Councils".

" Thank you for notification of my new Council tax for my property. I am, however, very disappointed to see the exorbitant increase in the amount I am expected to pay (in the region of 16%). The rise in the amount you require is in excess of five times the rate of inflation and certainly my wages. I would appreciate if you can explain how I am expected to find the extra money required."

"I was shocked to receive a bill from the Council's Treasury Dept for an increased tax of 15%. Whilst this is largely due to the "stealth" tax policy of the Government, together with the redistribution of grants away from the South East, I would question your statement that you have no choice but to make this huge increase".

" ... The question is, what do we get for your 15% increase? I cannot see much for it. The roads get worse by the day, being patched here and patched there. I have seen your workers putting a shovel full of tarmac into a water filled pothole and banging it down with the back of a shovel. What a sheer waste of material and labour, as within a week we were back with the pothole".

Reply to council tax payers

Appendix 2

Thank you for your email of 30 March 2003. We are all very concerned about the 15% council tax rise for 2003/04 and the impact this will have on households, especially those with fixed incomes, at or near the council tax benefit levels. The arguments about loss of Government grant (£48m over 3 years) have been well rehearsed in the Hands off Hampshire Campaign and I won't repeat them here.

The relationship between the County Council and the Government is rather different from a normal business relationship or from the environment in which individuals organise their personal finances.

The Government not only provides the majority of the County Council's funding but also exercises a considerable degree of central control either directly or individually over how much the County Council spends. This applies particularly to the two major services, Education and Social Services, which represent about 80% of the County Council's budget.

Government decisions on funding are not necessarily linked to pressures to incur spending.

For example in setting the 2003/04 budget, the Secretary of State for Education and Skills indicated that he expected the County Council to increase its schools budgets by 5.9%, but the total increase in Government grant was only 3.8%. The Secretary of State now has a reserve power to set a minimum schools budget and compel this increase in schools budgets.

For Social Services the Government has set performance targets for improvements in services, backed up in respect of delayed discharges from hospitals by proposals to fine local authorities at a penal rate whatever the reasons for delay. These improvements, dealing with more clients and paying higher rates to stem the loss of care beds provided by the private sector can only be achieved by increasing spending substantially. The grant increase only covers a spending increase of 3.8%, (even though the increase in spending on which the Government assesses the Council's grant is 6.8% for Social Services).

The implication of the difference between the increase in funding and in planned spending is the Government's view that council tax payers in Hampshire can afford to pay a bigger contribution towards the cost of local services in order to enable more Government grant to be given to authorities with lower council tax bases mainly in the North and the Midlands, a view that the County Council has argued strongly against but so far without success.

The number of people employed by the County Council has increased by 300, but the majority of the extra staff are either providing youth services fully funded directly by the Government or reflect the transfer of highways management staff from District Councils now that the previous agency management agreements with those districts have ceased.

The County Council's cost of inflation is 4.5% reflecting national pay awards, increased national insurance contributions, and the additional impact of higher landfill tax. Approximately 0.8% of the increase is the result of substantial increases in the rates paid to the private sector for social care to seek to prevent the loss of further care beds.

Increased pension contributions account for just 0.2% of the spending increase. The contributions made by employees to both the teacher and local government pension schemes are determined statutorily. Consultations are taking place on possible changes to the local government pension scheme in the light of the Government's recent Green Paper on Pensions. The County Council supports the proposal to raise the employees' contribution rate for new entrants to the scheme and to make the normal retirement age 65, which will help to make the scheme more financially sustainable.

I hope this answers the issues you raised in your circular e-mail to County Councillors. I have copied this reply to all of them and it can be taken as the response from the County Council.