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Leading pensions analyst Michael Johnson on the failure of governance in the local government pension scheme - and how reform can save the taxpayer nearly £1 billion a year

In this recent paper by Michael Johnson, Research Fellow of the Centre for Policy Studies, he makes ten proposals to help secure the future viability of the Local Government Pension Scheme (LGPS).

The LGPS is expected to become cashflow negative within, perhaps, three years.  The question is who will plug the shortfall?  Responsibility for paying benefits lies with administering authorities, acting on behalf of the participating employers, with the ultimate liability falling on council taxpayers.

This paper explains what the historical and current problems are, and puts forward the set of proposals for restructuring the LGPS.  It is a 'must read' for all council tax payers.  Even if you don't know much about the LGPS, please at least read the following sections to get an understanding of the problems:

Ten Proposals
1. Introduction
2. Where does the buck stop?


Latest Newsletter

Latest Newsletter The latest round up of news and events includes:

'I'm passionate about ....'
Council Tax Freezes
Town and Parish Councils
Letter to and reply from Eric Pickles


Communities and Local Government: New Council Tax cut for families staying together

On 25 August 2013 the DCLG issued a press release which announced that the government plans to remove an unfair Council Tax surcharge on family annexes and home improvements, to help support extended families.  In total, three taxes are being cut on home improvements to increase provision of local affordable housing for families both young and old.

The key points are:

New national discount for all family annexes (not just those for older people) of 50% saving an average £485 a year

Remove the community infrastructure levy on self-build properties, including all extensions, family annexes and home improvements

Ministers also intend to seek to remove Section 106 housing levies on such annexes and extensions; a 'stealth tax' slowly being introduced by town halls

The full press release may be downloaded from the Communities & Local Government website.

An open consultation has also been launched and full details are also available from the Communities & Local Government website.

Communities and Local Government: Two more years of Council Tax freeze announced

On 26 June 2013 the DCLG issued a press release which announced that the spending settlement for local government in 2015 to 2016 will enable local authorities to freeze council tax bills in England for another two years (2014-15 and 2015-16). Authorities that freeze or reduce their council tax will receive a grant equivalent to a 1% increase on 2013-14 Band D council tax levels.  However, full details about how the scheme will operate are still awaited from the Government.  It will be interesting to see how many authorities will take up this freeze grant offer.  Research shows that:

in 2011-12 all 421 eligible authorities (councils, fire and police authorities) accepted the freeze grant
in 2012-13 62 authorities turned it down
in 2013-14 124 out of 354 local councils, 25 out of 37 police authorities/PCCs and 15 out of 30 fire authorities turned down the offer.

Will the downward trend continue? Click here to find out.

The latest press release also states that if a local authority seeks to raise its council tax by more than 2% they would need to put it to their local electorate in a binding referendum.  We note that, again, there is no mention of the brake being applied to town and parish councils.  Isitfair will again broach this subject with Eric Pickles.

Remember that at the end of last year the Secretary of State decided there were to be some exceptions to the 2% excessiveness principle for 2013-14 covering shire district councils, fire and polic authorities whose 2012-13 Band D council tax was in the lower quartile for their category of authority.  For these authorities a referendum was required only where the increase in the relevant basic amount of council tax for 2013-14 was more than 2% and there was a cash increase of more than £5 per year in the relevant basic amount.  Maybe he will see fit to do the same again - but this time include town and parish councils.  Full details are here.

The full press release may be downloaded from the Communities & Local Government website.

Widening the Gap

Some facts and figures to help put some balance into this debate.

Click here to download.

Parish and Town Councils

Parish and Town Council precepts for 2013-14 are a cause for concern in many areas.   Large rises are being reported by some even during these difficult times.

Click here to download.

We return to double taxation and the Parish/Town Council Tax Scam

Parish/Town Council Tax Scam We have returned to the Parish and Town Councils.  For years we have been bending the ear of the opposition for these councils to be included in any capping and possible referenda.  We thought they were listening, it seems not. Read more...

Due to Town and Parish councils being exempt from any capping of excessive council tax rises, this then leads to the double taxation issue.  Double taxation occurs when a higher authority e.g. a District Council passes down responsibility for some local service or amenity to the lower Town or Parish Council, but does not pass on the funding it currently receives for it.  This allows the higher authority to keep its council tax precept unchanged or with a small increase, while the Town or Parish Council has to increase its council tax precept to cover the additional costs. The effect of this is that the council tax payer is now paying twice for the same service or amenity. Read more...

Council tax and other information

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