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'Surrey's referendum reflects a central government failure'

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Surrey CC’s decision to hold a referendum on a 15% council tax rise to fund adult social care has received national media coverage.

Less coverage, it must be said, than Donald Trump’s accession to power, but a significant amount nevertheless.

According to the ConservativeHome website the Taxpayers’ Alliance is reportedly “gearing up to fight the referendum, and hopes to lead the official No campaign”.

The chief executive of the TPA was quoted in the Daily Telegraph as saying “Surrey residents will have seen their council tax go up by around 85% in the past two decades and have every right to feel that their local representatives have let them down”.

The real challenge facing Surrey and other councils is the fact that successive governments have failed to sort out adult social care funding

Eighty-five per cent may sound a lot but the Treasury’s overall tax bill will have increased by 133% in the same period. Income tax has risen by £95bn (over three times the UK council tax yield) since 1997-98.

In 1997-98, ‘general government receipts’ were £316bn. In 2017-18 the equivalent figure will be £738bn. Even with a 15% rise in 2017-18, Surrey would be lagging significantly behind central government’s tax increases.

Of course, council tax is the UK’s only perceptible tax. The other 95% of taxes (set by the Treasury) are far harder to understand and often rely on buoyancy in the tax base to mask increases. Consequently, virtually all public attention is focused on local not national tax rises.

To the credit of the TPA, they are supporters of greater local tax-raising powers. The organisation believes that taxpayers’ money would be better used by town halls than Whitehall.

The real challenge facing Surrey and other councils is the fact that successive governments have failed to sort out adult social care funding. NHS spending has continued to rise since 2010, while councils have had to hold adult care resources flat in cash terms.

This week LGC’s sister title Health Service Journal has reported that thousands of patients could be forced into residential care as a result of NHS clinical commissioning groups restricting funding for care at home.

The proposed referendum is a symptom of successive national governments’ long-term failure to face up to the need to reform care.

Tony Travers, director, LSE London

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