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Surrey's referendum will deliver a verdict on ministers' approach to social care

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Whether intentional or not, Surrey CC’s announcement that it plans to hold a referendum on increasing council tax by 15% could not have been timed better.

Just as the newspapers were beginning to tire of stories of overcrowded hospitals struggling to discharge patients due to a lack of available social care services, Surrey’s proposed mammoth hike gave the issue a fresh angle and kept the pressure on ministers.

Some in local government finance circles may raise an eyebrow that it is a council serving an area as affluent as Surrey and which faces a reduction in spending power in 2017-18 significantly below the national average that is taking such a drastic move.

However, as Surrey and other counties point out they have less money to spend per household in the first place and mounting pressure from an ageing population. Ultimately, that it is a Conservative led council in the affluent south east proposing such a drastic measure only serves to further emphasise the scale and seriousness of the crisis.

It may be better for the sector, and even Surrey in the long run, if voters reject the proposal

However, the fact they are doing so just months out from county council elections suggests Surrey CC’s Tories, with their majority of 35, feel pretty comfortable.

Surrey leader David Hodge has been unequivocal in laying the blame firmly at the government’s door, uncomfortable for his local MPs who include the chancellor and the health secretary.

Assuming councillors back the referendum next month, it is widely expected the public will reject the increase, which amounts to nearly £200 extra a year on an average band D bill. In the first and only other council tax referendum in Bedfordshire last year voters rejected police and crime commissioner Olly Martin’s attempt to increase his precept by almost 16% in order to raise an additional £4.5m to pay for 100 police officers.

Surrey’s increase would raise around £90m, about £60m more than could be generated by the maximum 5% increases they could impose without holding a referendum and a boost to the council’s 2017-18 budget of nearly 8%.

Mr Martin’s failed referendum attempt cost £600,000, including the cost of re-billing residents. Surrey, which plans to hold its poll in May after council tax bills for 2017-18 have been sent out, will find itself in a similar situation but with such a big prize it seems worth the gamble.

Liverpool City Council has dropped its plans to hold a referendum on a 10% increase for 2018-19 after a public consultation indicated it would be unsuccessful.

The perception is residents in Surrey have more disposable income than those in Merseyside, but will they be willing to fork out to plug a funding gap left by central government cuts and its repeated failure to properly address the social care funding crisis? It may be better for the sector, and even Surrey in the long run, if voters reject the proposal, leaving the ball back in the government’s court.

By framing the issue so clearly and explicitly asking local taxpayers to step in where central government support is inadequate, Surrey has created a referendum on the government’s approach to social care.

 

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Readers' comments (2)

  • Surrey Council Tax hike - my understanding is - A local referendum must be held, and won, before an authority can increase council tax by more than the amount specified in the principles. BRIEFING PAPER Number 05682, 21 December 2016 refers.
    Not quite sure how they can make people pay the increase before this decision!

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  • Attempting to finance adult social care through allowing above inflation council tax increases is not only inadequate it is also unfair as the yield of each percentage point varies markedly between councils. It will not enable the recovery of past cuts, it will not deal with the current financial pressures.
    Surrey's attempt to raise 15% reflect the depth of the crisis and will probably fail providing a manadate for draconian future cuts to Surrey's care budget. Furthermore the LGA are now pointing to child social care facing a shortfall of £1.9bn in the next three years. This may have implications for the NHS also.

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