Despite widespread cynicism about what was dubbed the ‘guilt tax’, more than £620,000 is being ploughed into services prioritised by contributors.
- Project: Community Contribution Scheme
- Objectives: To raise additional revenue for the council’s non-statutory services supporting vulnerable residents from a voluntary contribution on council tax bills
- Timescale: Launched March 2018
- Cost to authority: The total cost incurred by the council to support the scheme is £32,995
- Staff working on project: Staff from policy, evaluation, and communications teams
- Outcomes: The community contribution scheme has so far raised £620,000, with money being spent on schemes for rough sleepers, young people and tackling loneliness across the generations
- Officer contact details: Nickie Aiken
What connects the DJ Tim Westwood, former BBC Apprentice judge Margaret Mountford and business tycoon Stelio Stefanou?
First, they are Westminster residents. Second, they were prepared to be early supporters of Westminster City Council’s community contribution scheme, our attempt to invite our better off residents to make a voluntary contribution alongside their council tax, making us the first UK local authority to do this.
While our celebrity supporters were welcome, the original motivation for the scheme came from conversations I and fellow councillors had been having with our richer constituents.
It is well known Westminster is home to wealthy people. We have around 2,000 houses worth more than £10m, and Mayfair and Knightsbridge are in our patch, home to some of the most expensive properties in the world.
What is less known is that in informal conversations about council tax some better off residents were asking: can I pay more? The rational for this stems from the fact that Westminster City Council is a low tax authority.
We have one of the lowest band D council tax rates in the country. Even our top-rated band H taxpayers only pay a Westminster City Council precept of £832.54 on multi-million-pound properties. Their altruistic argument was that they can afford to pay more to help our communities and wanted to do so. They wanted to know how they’d go about it.
As readers will know, you can’t just increase the top council tax rate without affecting everyone else, which is hugely unfair to our many ‘just about managing’ families.
The solution, it struck us, was to come up with a kind of voluntary contribution for our most affluent residents. Working with policy and finance officers, we concluded we could ask for this contribution in a note issued alongside council tax bills.
”In informal conversations about council tax some better off residents were asking: can I pay more?”
But who to ask? The obvious answer was the 15,000 plus households that fall into band H in Westminster. So, before any fiscal wheels turned, we consulted them in late 2017.
The results were promising. Of the 904 who replied, more than half with homes worth more than £5m backed the proposal.
In the same consultation, we also asked band H residents what they wanted us to spend the money on if the scheme went ahead. They came back with three priorities: services for young people, help for rough sleepers and tackling isolation across the generations.
The council sent out letters inviting contributions in March 2018 and media picked up on the story. We ran into howling headwinds of cynicism from critics who said it would never work. The rich, they declared, would be indifferent to the fate of people living down the same road.
Westminster City Council could not come up with a snappier name than ‘voluntary community contribution’, so newspaper sub-editors did it for us. We appeared on the front of one Sunday national newspaper for our ‘guilt tax’, while others resurrected a headline of yesteryear with ‘voluntary mansion tax’.
I never tire of explaining this isn’t a tax – it’s voluntary. But David Cameron never said he would ‘hug a hoodie’, and he’s stuck with that too.
Even so, the outcome has been remarkable.
Our community contribution scheme has so far raised more than £620,000, with around 500 residents contributing. Our initial suggestion for a contribution was double the £833 band H precept they paid last year. Some generous donors have given up to £10,000.
The money raised has gone into a fund overseen by the City of Westminster Charitable Trust, an independent organisation. This charitable fund was set up to distribute the money as a direct result of feedback from residents that they would like their contributions to be tax efficient.
The trust has just invited local groups to bid for £200,000 worth of grants for schemes to help rough sleepers, the lonely and young people – those original priorities I mentioned. A grant of £60,000 has already been allocated to a charity called Riverside Care & Support which is going to employ two former rough sleepers to help those who spend their nights in Westminster’s doorways and undercrofts.
Because of our location, Westminster has the highest number of rough sleepers in the UK – around 300 on a typical night – and we spend £6.5m a year on trying to help them. The use of former rough sleepers is, we hope, a new way to try to engage with those who don’t want to engage with us.
This is a bright start, but there is more to do. We sent waves of letters in spring 2018 and autumn 2018 to people who haven’t contributed asking them to reconsider.
And as we enter year two of the scheme, we are writing again to all 15,000-plus band H householders to ask them about contributing.
“We are not the golden postcode ghetto cynics suggest.”
In terms of take-up, you must remember there are a lot of properties in Westminster which are company-owned, so may have a changing cast of occupants, and there is a high population turnover in the area, so these are people not necessarily invested in their local community. Perhaps some residents want to see some solid examples of where this money is going and how the scheme works before they make their contribution.
The fact is the scheme is working. Other local authorities are looking to go down a similar route, for example Islington LBC and Kensington & Chelsea RBC.
The community contribution is evolving, but it is here to stay and will now roll out every year alongside the council tax. In its first year of operation it’s allowing us to spend money we didn’t have before on nonstatutory services to help some of our most vulnerable residents, and with clear priorities stated by those who donate it.
The willingness of our better-off residents to voluntarily give more shows we are not the golden postcode ghetto cynics suggest.
These residents have shown they want to help in the streets they share: a genuine gesture in our shared ambition to create a city for all.
Nickie Aiken (Con), leader, Westminster City Council