£500m council tax goes unpaid in London

Struggle: £500m council tax is unpaid in London
12 April 2012

Town halls across London have failed to collect £526 million of council tax due to "breathtaking incompetence", the Evening Standard reveals today.

The lost money is equivalent to the cost of the 2012 Olympic Stadium or the amount in planned cuts in council services. It could pay for 1,000 libraries or more than 16,000 police officers.

The Standard's investigation shows Londoners failed to pay £117 million last year alone.
The five worst local authorities account for nearly 30 per cent of the total bill, which has built up since council tax was introduced in 1993.

Top of the table is Labour-controlled Lambeth council which is still owed more than £51 million. Next is Tory-run Croydon which is owed £35 million.

The figures reveal that Labour councils are responsible for more than £366 million of the uncollected money.

Lambeth, led by £250,000-a-year chief executive Derrick Anderson, will make £37.2 million of cuts this year after its government grant was reduced, with a total of £78.8 million in cuts needed over the next three years.

Local Government Minister Grant Shapps said: "This confirms what we all knew about Labour councils wasting public money without a second thought.

"Not only are councils like Lambeth pursuing a strategy of cutting jobs before waste they are displaying breathtaking incompetence when it comes to financial management. All the millions could have been diverted to protecting frontline services."

Matthew Sinclair, of the TaxPayers' Alliance, said: "Families who pay their council tax bills without any trouble every year will be disappointed that they are having to pick up the bill for London boroughs failing to collect so much money."

The organisation which represents local authorities, London Councils, said rates of payment in the capital are high, adding: "Councils in urban areas like London face a significant challenge in collecting council tax, with a large and highly mobile population.

Despite this, they have ensured council tax collection rates between 96 and 99 per cent - better than other forms of taxation such as income tax and VAT."

But Tony Travers, an expert in local government, said: "Every penny not paid in council tax will mean lower service levels or that other people have to pay higher council tax. Every person who pays their council tax will feel cheated by those people who don't.

"High non-collection rates need looking at. For every £60,000 not collected there is one fewer member of staff. The maths is simple. It's a significant number of potential employees at a time when libraries and other services are under pressure."

Paul McGlone, Lambeth council cabinet member for finance, said: "As the second largest authority we will always show up disproportionately in a table like this one." A spokesman for Croydon added: "The amount we have outstanding is less than three per cent of the £1.5 billion available to collect."

Cuts in the five worst boroughs for tax collection

Lambeth
The council will make £37.2 million of cuts this year, with £78.8 million needed over the next three years. The future of four libraries, and a mobile one, is uncertain. Thirty lollipop patrols costing £150,000 will go as well as 10 park rangers, saving £400,000. There are big cuts to youth services, including summer play schemes, and £3.5 million from children's social care.

Croydon:
Tory-run Croydon agreed to cuts of £90 million, making £22.7 million savings from a budget of £273.8 million in 2011-12. A total of £14.2 million will be cut from back-office costs with other cuts to hit some youth services and the arts. Six libraries under threat will remain open until next month while their future is decided. There are plans to make 310 voluntary and compulsory redundancies.

Hounslow:
The council will make £60 million of cuts over four years. Plans to close eight libraries have been postponed but campaigners claim they are still threatened because there is a £569,000 shortfall in the amount that needs to be saved. Council workers will take pay cuts and redundancies are believed to be under consideration.

Haringey:
In February councillors in Labour-run Haringey approved £84 million cuts from a total budget of £273 million over the next three years. More than 1,000 jobs will be lost and less money will be spent on libraries, leisure centres and services for the young and the elderly. No library closures are planned.

Hackney:
The council announced £44 million worth of cuts in March but says no libraries or youth facilities will be closed. About 200 jobs will be cut from "back-office posts". Hackney employs 3,200 full-time staff.

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