Tag Archives: London

George, for goodness sake, let them raise my council tax

For the last couple of years one of the main sources of pride for local councils was the ability not to raise council tax or even to reduce it. Government proudly presented charts showing how many councils managed to do that and publicly shamed the ones which did not. It seems that the councils also took it upon themselves to partake in the PR game. My own local authority has quite recenly sent me a leaflet boasting that the council tax has been frozen for 8 years.

I must say that I find that almost as impressive as shocking. Undeniably budgets of local authorities have been significantly affected since the conservative government came to power. David Cameron often emphasises that he wants councils to become more efficient and make ‘back office’ savings. However, there are only so many senior managers who can be made redundant, so many optimalisations one can make. At certain point local authirities will inevitably find themselves with their backs against the wall… and we may already be past that point! It became brutally aparent when Mr Cameron himself tried to intervene against some of the cuts in his consituency (more on that – here). Loss of over 40% of funding (as it was the case in Oxfordshire) will mean that not only those evil ‘back offices’ will be affected, but also some (lots of?) crucial frontline services – a children centre, womens’ refuge, day centre for people with dementia, anything which does not need to be legally provided by the council is under risk of being shut down.

The ability to protect the services, more – to deliver a high quality services to its inhabitants should be a source of pride to the council; that and nothing else. I very much welcomed the indication that Geoge Osborne may allow councils to raise their local tax by 2% to gather extra funds for social care. However, I think that everyone needs to accept that more may be needed and that we should be all prepared to contribute more to keep the services we and those who live around us need.

That said, we now come across another problem. Many families are already struggling financially. An increas of even few pounds will create additional strain on their budgets. Especially that for the last few years even individuals or families on welfare benefits need to contribute to their council tax.  Therefore there is no way to increase the council tax in a way which only affects those who can actually afford that.

The way in which properties are allocated into diffent bands (which in turn tells you how much to pay) perfectly symbolises just how backward this tax it. Band allocations actually use property valuations from 1991! So if your property in 1991 was valued at under £40 000 you’d be in band A, between £40 000 and £52 000 B, and then it goes up to H which is over £320 000. I’m not quite sure how this is calculated for properties which were not around 24 years ago. Well, it is not like a lot is being built in London anyway, so at least that is not a problem.

Especially in London linking amount of tax you must pay with value of your property seems highly unfair. Prices of many properties sky rocketed in the last decade or so. Some of them surely are inhabited by low earners who would struggle if council tax was increased. There is also a lot of people who would be able to contribute more, but currently live in properties of a lower value.

A great start to differentiating prices of the council tax for high and low earners would be an introduction of voluntary top up. An addition to the council tax which one could subscribe to and which would go only and directly to front line services.

The spending review tomorrow will surely bring more cuts and thefore more hardship. Maybe, just maybe, through allowing councils to raise the tax it will also open up discussion about the need, cost and value of the local services and the ways to save them.

 

Why are we not angry? – The London rent rant

Imagine going to the shop tomorrow. You pick up some eggs, a bun or two anhousingd some fruit. You walk past the self-checkouts not willing to hear dreaded ‘unknown item in the bagging area’ again. You approach the cashier holding contactless card in your hand to make the encounter as quick as possible. The cashier does not start to scan your stuff; instead there is a questionnaire to fill out to see whether you qualify for shopping. And a small charge. And by the way there are two people willing to pay more for the eggs you want to buy, so you either outbid them or go without a breakfast. Would that make you mad? Would that made you shout and swear and throw random objects around?

Welcome to the private renting market in London. A place where you’ll be outbid, mildly humiliated, interrogated and forced to pay to run checks on you to make sure that you are able to afford mediocre standard but well overpriced roof over your head.

Shelter is one of the most basic human needs; perhaps more important than anything but food. And yet, in my opinion, property rentals are amongst least regulated markets of all in the UK. You start your journey by paying high agency fees just to check that you will be able to afford the property you’re about to rent. It does not quite matter that you’ve been paying just as much for the past 3 years… you need to be checked. Then there is rent. What would happen if all the major supermarkets decided to raise prices by 40% as of tomorrow? I suppose we would have millions of people on the streets. Somehow private landlords do that (slightly less rapidly) continuously and no one says a word. Landlords are quite aware that people have to live somewhere, so no matter how much they asked for the hole they have to offer there will be someone to take it. According to Guardian (http://www.theguardian.com/money/2015/apr/11/buy-to-let-landlords-earn-returns-of-up-to-1400-since-1996) landlords who invested in properties in 1996 have returns of up to 1400%. This is more or less five times more than any other kind of investment in the same period. Now, I believe that shelter – again, a basic human need, should ideally not generate any returns whatsoever. I can understand that for some that would be by far too radical an approach, fair enough. Nonetheless, whatever your views are you must acknowledge that in no circumstances providing accommodation for people should be the most profitable source of investment of all. It is just not right.

This is not all. I will not be able to delve into all the wrongs of the property market in one post, but I just wanted to signal a few of the things I noticed (and I am sure that there are some that escaped my attention). If you’re a landlord you are able to deduct the interest on your mortgage from your income tax. All the tenancy agreements are signed for a year and then extended as a rolling contract allegedly because this is suitable for everyone. In reality the tenancy agreement is the only protection for the tenant. Without it landlords can ask for their property back at any time with a 2 month notice. There is absolutely no defence against it and the landlords do not have to give their reason. In effect this means that often asking for repairs to be done or complaining about anything after your tenancy expires puts tenants at risk of losing their flat. I understand that there are many great landlords out there (and on that note all the best to D. wherever you are man) but there are loads of really shitty ones too and without property legislation there is no way to protect people from them. Effectively there are almost no standards (because there is always someone desperate enough to accept a flat in any state, hoping that the landlord might do something about it in the future), no regulations and no supervision. Building 200 or 300 thousands houses every year may well be the best way out of the housing crisis. However, regulating the rent market would provide an immediate solution, not one that really works in 2025.

How is that not the main story on the news every day? I don’t quite know…

Burning Money

Last four years and, most probably, four years to come are for UK’s councils a time of cuts and austerity; how is it that huge displays of fireworks still make it to the list of priorities?070811_1913~01

Local authorities have lately been squeezed from every direction possible. The government expects them to spend significantly less; the public pressurises to freezer or even decrease the council tax. So far the impact of the squeeze may not be great, but if anyone suffers that would be those who already are the most disadvantaged. With their benefits frozen they also have to face cuts to some of the services or programmes they so far relied on.

Nonetheless, during the week just before and after the 5th of November sky over London west to east and north to south was lit by more or less impressive displays of fireworks. They don’t seem to bring any profits to the organisers – people just come and go; sometimes there are even no street vendors, who could have extra profit. They do not really create sense of community or bid people closer together; if someone would like to promote particular borough or area, also, there are many better options. I do not find it shocking or infuriating, it is not something that should be investigated, I just find our priority list interesting… Or perhaps I just do not understand?

Clueless about homeless

Recent article on the Guardian (www.theguardian.com/lifeandstyle/2014/apr/21/london-internal-refugee-camps-homeless) suggested that London should think about setting up refugee camps for its homeless. As it got me interested I ended up scrolling though some of the comments. Most people seemed to think that this is some kind of a joke, a provocation aimed at raising awareness of the issue. The problem is real enough, but the social awarness of it is far from sufficient.

There are different types of homeless people – there is rough sleeper, couch surfer, shelter occupier, and family visitor. None of them, apart rough sleepers perhaps, is visible or considered a real problem. Having a place to live makes all the difference for the poor. As long as you have your flat there are things to be done, help to be sought. There are people who’ll help you during your eviction hearing, and schemes to help you pay your rent arrears. If you fall behind with your rent and end up facing eviction the judge will probably look at you kindly and order your landlord to give you yet another chance. But once you’re out, you’re out and on your own. Whether you were evicted due to the fault of your own or not, councils have a duty to rehouse only those in priority need – mainly people with children or those disabled. Everyone else will be refused and informed that it would be best to make arrangements on their own.

So then you have to search. To find a home when you’re employed and capable is difficult, but no one really says how to search for one when you’re homeless, computer illiterate, or disadvantaged in a different way and plan to pay you’re rent with housing benefit. But that’s not all. Say you are eager to look and assume you even know how to. With the constant incline of house prices and introduction of benefit cap you may forget about the inner boroughs. The bigger house you need the further you look; three or four bedrooms will probably take you to a different county. If you need five – you can start familiarising yourself with the map of Wales.

I am fully aware how terrible idea the camps for homeless would be, but do they still sound so ridiculous now?