That could save something in the region of…

Media darling and economic blogger Duncan has been looking at the list of possible public spending cuts put forward by David Davis MP in today’s FT. He asked me what I thought of both the effectiveness and the likely saving from the proposal to “Abolish regional government and devolve remaining functions ‘back to the counties’ or back to the centre“. You can read my full answer in the comments, but I thought I’d raise the issue here in case any readers have any specific insights.

My general view is that at the moment the “regions” (RDAs, GORs, SHAs, and assorted other smaller regionalised Quangos) generally do the job they’re given adequately, but there’s no particular logic to them. Certainly there’s no reason it couldn’t mostly be accomplished either at a county level without spending any extra money (and sometimes by spending less) or centrally, since the limited devolution that the regions represent often doesn’t add anything in terms of real accountability.

The problems the proposal needs to address are, firstly, the variable geometry of the UK – not everywhere has Counties any more, so for example Doncaster and Brighton may not be large enough to undertake some tasks, but the Conservatives are generally opposed to structural reforms that might address that, and to the best of my knowledge not exactly enthused by the city-region (aka “metropolitan county”) agenda. London is the other anomaly – would the Mayor be the County and decide what can and cannot be pushed down further to the individual boroughs? Instinctively that seems sensible.

Secondly, where the savings from scrapping the regional tier come from the amount of work the Government Offices of the Regions do on liaison over regulation and inspection with individual Councils, there is a risk of double-counting, since the Conservatives are already proposing to save much of that money by reducing the amount of regulation and inspection. You can’t, sadly, save the same money twice. I suppose you can get rid of some of it, and have the part you keep done more consistently and with fewer layers.

In principle though, it’s much simpler to me. Democracy works better when there’s demos as well as cratos. Villages, towns, cities and counties tend to have a significant number of people who describe themselves as being “from x”. I meet very few people who say “I’m from the East of England”, and when someone says “I’m from the West Midlands”, they tend to mean the conurbation, I don’t think it’s a widely used self-description by people from Herefordshire.

Therefore I would want the argument to be overwhelming for governance at the regional level if it were to continue – which is not to say that some delivery can’t still be done at that level by agreement, but I wouldn’t use the current structures or, to be honest, regional boundaries. I am put in mind of a comment once made by Matthew Taylor, MP for Truro and St Austell - who when asked his views on regional government replied that he was entirely at ease with it but that there wasn’t really room for many regions in a country the size of Cornwall. I think he was joking…

While we’re on the subject, I have some changes I would like to make to the sections of the Local Democracy Economic Development and Construction Bill dealing with drawing up the Integrated Regional Strategy. Will supply own red ink if required.

Under the weather

Credit is being bestowed on Lincoln City Council at ConservativeHome for their success in reducing sickness absence from a peak of a fairly astonishing 18.2 days per member of staff in 2002-3, to a target-busting 8.7 days a year for the financial year just ended. The Editor has written to the Leader of the Council to ask how this was accomplished. Knowing a little about this I can offer some insights into what the response might be, although of course things may look entirely different from within the organisation as against how they appear from my perspective.

The first thing to say is that while sickness levels in the public sector are quoted as an ‘average’ per member of staff, and that’s a useful measure, it doesn’t give you a very good feel for the reality. 18.2 days looks like a prodigiously high number, and indeed I can’t imagine how it could be thought acceptable or how exactly it happened. It is very unlikely, however, that it was composed of some people taking 20, and some taking 16. More likely that among Lincoln Council’s staff there were a couple of dozen who were effectively absent because of some long-term illness for the best part of the year (sickness measures include those who are no longer being paid sick pay), and the remainder were off for something closer to the overall average of 9 days. Whatever the case, one would want to ask some fairly searching questions, but they are clearly different problems requiring different solutions.

Ordinarily, one would expect Lincoln to outperform on sickness – as a District Council it does not employ many of the staff members in whom the problem of long-term sickness tends to arise most frequently: firefighters with injured backs, teachers and social workers with nervous breakdowns, and so on. Similarly, short-term absence is often very high in social care for old people, simply because if I have what most of us would call “a bit of a cold”, it can still be too great a risk to go into a frail old person’s home and give them what might in their case be a much more serious infection. On the other hand, they do have a greater percentage of public-facing staff who might be expected to pick up more ‘bugs’ than an office worker. You can see a breakdown by department here (pdf). Interestingly sickness levels in the planning team are falling, and in the revenue team they’re rising – perhaps that’s not surprising given the economic climate! 

Without wishing to detract from Lincoln’s undoubted achievement, there is also the problem of mean reversion. While sickness was a staggering 18.2 in 2002-3, it was consistently around 11 days in 2000-1, 2001-2, and 2004-5, 2005-6, and 2006-7. I believe (I’m open to being corrected) that the Conservatives took control of the Council in 2007, so while sickness levels were still unacceptably high, they had already been brought down some way, whether by the law of averages, or by people taking action, from the bizarrely high numbers of 2002-3. Councillors have been actively involved at both Cabinet and Scrutiny level in leading and monitoring the ongoing work to bring these numbers down further.

A number of things were done in Lincoln with the aim of reducing sickness absence, and I’m not sure they all make comfortable reading for those who believe that the problem is skiving, or that the solution is a harder line from managers. I suspect some will, and some will not. 

• HR policies around equalities were strengthened, to ensure that if people developed a disability it did not prevent them working for an extended period of time if there was a way of helping them continue in their role, as well as monitoring the casues of accidents and stress more closely.
• Managers were encouraged to become more active in helping or disciplining, as appropriate, those employees whose absence was the result of misusing alcohol or drugs.
• The Council also acted to speed up the resolution of disciplinary and grievance proceedings where “off sick” was being used as a euphemism for the real situation.
• Absenteeism in previous employment was given greater prominence in the recruitment process in an attempt to reduce the number of people being brought into the organisation who were likely to prove ‘bad risks’ in terms of absence.
• Managers were trained in ‘emotional intelligence’ so that they could offer more tailored support to staff where sickness absence appeared to be becoming a problem, and a ‘third eye’ approach adopted so that managers could have a colleague to call on to look again objectively at a problem situation.
• The function of occupational health workers was promoted more actively, ensuring that staff who were off sick for an extended period of time attended interviews focused on getting them back to work.
• More was done to encourage recognition of those staff with an exemplary attendance record.

Now, think what you like about some of it – I can hear the cries of “occupational health? non-job” in my ears now, and as for rewarding people just for turning up and doing the job they’re employed to do in the first place, shocking! But there we are, one way or another it appears to be working. Contrast this with some truly bizarre decisions around sickness - I know one (Conservative as it happens, but I doubt this has come from the Members!) council which has decided that if office staff are too ill to make it to work they are now to be banned from working from home, on the premise that “you are either ill or you aren’t”. That might, just about, be fine if people have flu (though I’d have to be iller than that before I stopped at least picking up my office e-mail), but what if you have a broken ankle?

For the record, my maths says I have had 6.5 sick days in the last three years, although I’ve had some other persistent issues which have meant taking occasional scheduled time off during the day for medical appointments, for which I have happily (from my perspective) not been required to use holiday allowance.

More guest blogging – spending cuts

Councillor Harry Phibbs approached me recently to write a guest blog for ConservativeHome about “how to cut Council tax”. I said that I couldn’t do quite what he wanted, but was happy to write an article about where I thought spending cuts might be targeted in an environment where local government’s central funding is reduced substantially, and ‘efficiency’ no longer comes anywhere close to filling the gap.

The resulting blog post is here. Two things I should say – firstly, I’m not a Conservative – I say that both because I don’t want this to be seen as a partisan blog, but also because I don’t think ConservativeHome should be subject to mischief if someone decides to use my suggestions and claim they are ‘Conservative proposals’. I have worked with and for Councillors of all three main parties quite happily – they’re all individuals, and they all have their strengths and weaknesses. Secondly, while the article has been titled ‘where the axe must fall’, I am clear that I hope the very worst case scenario doesn’t arise, and in some cases I think the savings I’ve suggested should be on the table, but I would advise against them when it came down to it.

Anyway, my contribution to what I expect will be a lively debate. Fingers crossed that in five or ten years I’ll be writing about great ways to spend our unexpected new wealth. Doubt it, but life’s funny like that.

Budget: Housing, Building, and Local Housing Allowance

Note to self: 100 lines – this is not a housing blog. Nonetheless:

I was glad to see that some kind of extra housebuilding programme did make it into the budget following my pessimism earlier in the week, though disappointed that it only seems to be £500m compared to the £1bn which had been leaked, and of that only £100m will be delivered through Councils. As I think a Lib Dem MP pointed out, that adds up to about a dozen houses per Council area, on average, and it is dwarfed by the sums being spent to encourage the price of existing houses to go up in mortgage bailouts, guarantees, rescue schemes and the like. Setting Councils free to borrow money and build housing for a mixture of social use, market rent, and sale – in whatever partnership model with building firms they choose, would make a lot more sense in this economic climate and context.

That aside, I was perhaps more worried by something which seems to be being seen as a footnote to the budget. In the press notice here, we see the following;

From April 2010, households will no longer be able to keep any of the surplus if the LHA they receive is higher than their rent.

This may take a little explaining, please bear with me. Once upon a not very long ago, if you couldn’t afford to live on your income or benefits, and were eligible for help with your housing costs, you found a flat, and the landlord claimed your rent from the Government, or you claimed and it was paid to them. That had some benefits and some flaws, in particular it meant landlords could discriminate – “No DSS”, as adverts used to say. Now, instead, you apply for help, this is calculated based on “Local Housing Allowance” (roughly the average price for the cheapest x% of the number of bedrooms you need in the last year, roughly), and then you find a flat based roughly on that amount.

So suppose you are a single parent with two young children. You will be assessed as needing two bedrooms, and told your local housing allowance in, say, Leeds, is therefore £121.15 a week. Having applied for this, you set about finding a flat to rent. I’m given to understand that isn’t too difficult in Leeds at the moment. Now, if you can find a flat that costs £121.15, so much the better. If you find one that costs £130 a week and are prepared to pay £8.85 out of your own pocket, that’s fine too. Even better, if you can get one that’s acceptable to you for £110 a week, this one, maybe, then you get to keep the £11.15 all to yourself, buy some sweeties or your bus pass or whatever.

That’s where the Government is aiming to claw back the money. Now, the most you can get is what you’re actually paying. In principle, that seems entirely reasonable. In practice, there’s a big flaw with it, which is why personally I’d suggest clawing back maybe 50% to 75% and leaving people with an incentive to shop around.

Firstly, it may not save the sum of money cited. I might be prepared to live in a fairly grotty flat in the dodgy bit of Roundhay in exchange for an extra £10 a week on my low income. Discovering that there’s no incentive to make that saving however, I might decide to spend up to the maximum and get somewhere a bit nicer. I could head a bit out of town but still, I think, technically be in the City of Leeds Council area, and get this nice end terrace with garden and room for a ponyconservatory. Why shouldn’t I, I’ve effectively been given a target expenditure now, instead of a cap.

This threatens to exacerbate another problem some people have claimed exists with local housing allowance, which is that it ‘bids up’ the cost of lower-end rental housing and is necessarily inflationary. If there are ten similarly sized but differently appointed houses on the market in a town, for rent at £100, £200, £300, £400 and so on, then the ‘local housing allowance’ will be set at the average of the lowest three or thereabouts – £200. If, in response to this, the landlord of the first house realises nobody will need to pay less than £200, he can raise his rent to £200. The next year, the average of the cheapest three houses has risen to £233, meaning the local housing allowance needs to go up, meaning… and so on. I’m not certain this has really happened to the extent people believe, but this change certainly makes it more, rather than less, likely that it will in the future.

Of course, if the public sector was the landlord more often… but there I go again.

I’m not holding my breath

I am no economist, but as far as I can tell most people accept that Governments should attempt to smooth the economic cycle – spending more and / or taxing less when the economy shrinks, and spending less and / or taxing more when it grows unsustainably quickly. The expectation is that Alistair Darling is reaching the limit of what the market will bear in terms of lending to the Government, and therefore needs to announce policies which, while raising borrowing forecasts in the short term, will also show how the debt is to be brought under control further into the future.

A range of policies have been proposed which we may see included in the budget, from giving people paying top rate tax less money back in exchange for their pension contributions, to giving people money to buy a new car if they have an old one to scrap. Declaring an interest (I don’t currently have a car at all, I have a slightly used rail season ticket if Alistair would like to buy it off me, or the Bank of England want to swap it for gilts) I think that one’s a bit weird, costing the taxpayer money to create demand for cars today (many of which will be imported anyway) at risk of reducing it next year, and reducing the demand for mechanics, before the recession is over.

My hope is that Alistair Darling will announce a policy relating to the housing market which will stimulate the economy in the short-term, and generate revenue for the Government when the debt needs paying down. I am not talking about the latest scheme to encourage people to take out mortgages and keep house prices up, but rather a simple programme of public sector house-building. Not old-fashioned council tower blocks or monolithic council estates, but mixed developments in sites mostly already identified but stalled because of low demand from buyers, and the lack of finance for developers.

Local Councils are well placed to deliver or commission this work as housing authorities with knowledge of the local market and land availability, though it need not necessarily be done by us. With the construction industry at a low ebb, good prices could be secured for land and labour, delivering a combination of homes for allocation to people on the Council house waiting list according to need, homes for people wishing to rent at the market rate, and homes for either purpose which are to be sold into private ownership in the future to prevent the next increase in house prices from turning into a bubble.

Short-term expenditure by the Government in this way would do something far more important than the demand-stimulation of the VAT cut. It would guarantee a large number of people’s job security, and cost less than even the headline figure, since those people would be paying some of their wages back in tax, rather than claiming benefits while being unemployed. Further down the line, the public sector would have a valuable revenue stream from rent and sales income, which could be used to reduce debt and other taxes.

And it would mean we had more decent housing, which whatever is going on in the mortgage and housing markets, much of the country has too little of relative to the number of people who need it.

Dog’s Breakfast

So it appears we are to have our “spying powers” taken away from us. Honestly I don’t feel, or look, like James Bond, and I’ve never understood this description of the RIPA – which as far as I can tell was more about requiring public bodies to authorise and register any surveillance activity than encouraging them to do more of it. This, combined with the Freedom of Information Act, meant that the newspapers could find out how much “spying” Councils are doing. I suspect much of it could have been done before the Act, but nobody would have found out. Don’t even get me started on the Daily Mail line that it is an “anti-terror” law.

Of course we could spend all day arguing about the pros and cons of the ‘surveillance society’. Frankly where I live isn’t very nice, and short of having hundreds more police officers on the beat, I’d welcome the installation of more CCTV, particularly the high-quality stuff, ideally being watched in real time. I have yet to be a victim of anything more than ‘not feeling very safe’ and having to duck local kids shooting fireworks at each other, but friends have been assaulted, burgled, and so on. Equally though I appreciate that some people would prefer not to be watched, and will take the greater risk of being victims of crime as a price worth paying. Unfortunately, public places being just that, short of having Freedom Town and Safety Town (audience: “It’s a postcode lottery!”) we have to reach some kind of shared view about the balance.

I’m not going to suggest how that balance should be reached, I’m going to make a far more trivial point, which is that listening to the radio and scanning through the papers this morning I got very annoyed by the media’s obsession with the immorality of CCTV and so on being used to detect and prosecute dog fouling. Dog fouling is a serious issue, and until Councils largely got on top of it, partly with these measures, it filled Councillors’ postbags like little else apart from potholes can. It turns parks into no-go areas, ruins walks, is generally unpleasant and can in extreme circumstances cause blindness in children. A couple of years ago people in my area became so angry at dog fouling that a small group of them formed a vigilante mob who spied on the owners of fouling dogs, collected the offending product, bagged it, and returned it through the owner’s letterbox.

So, I have an alternative proposal. I believe that someone’s likelihood to commit crime is largely driven by three factors – the reward for committing it, the chances of getting away with it, and the leniency of punishment if caught. On the basis that we will be significantly reducing the likelihood of getting caught, it seems to me the only option is a significant increase the severity of the punishment for the small number who are caught, on the model of the vigilantes above.

Therefore, in the spirit of restorative justice, I propose that anyone caught letting their dog foul a public area in the future should be required to lick the pavement clean. 

That seems like a fair swap for making it harder to catch them.

In other news I have been “guest blogging” inasfar as Alice who blogs about UK housing (the fact that it’s too expensive, primarily) has picked up my post about Council Mortgages and shared it on her blog. I feel a bit fraudulent, a guest post really ought to be something new, but in this case it’s very relevant and likely to be interesting to her audience, so I forgive myself. How generous of me.

Spot the Customer

The financial climate for public services has not been as good over recent years as many pundits suggest, but there is no doubt it is set to worsen dramatically over the next few and quite probably beyond. As this happens, the attraction of “more for less” theories and the temptation to embrace easy answers will grow across local government. Of course it is always important to look for ways to deliver the best possible balance between good services and low costs. It is also important not to waste scarce resources.

One way local government is sometimes very good at wasting scarce resources is in the ineffective or inefficient employment of consultants. Let me be clear, I am not opposed on principle to the employment of consultants, though if spending on them were to exceed about 1% of total turnover, alarm bells would ring, and I would ideally hope it would be a great deal lower. Consultants can be useful in delivering specific projects on which they have expertise when it would not make financial sense to employ someone in-house for a short time period, or to develop those skills internally. They also, rightly or wrongly, can be a better way of delivering hard messages to the Council – to staff or Councillors, which they would find easier to resist or ignore if they were raised internally in a similar way.

However, consultants have a number of drawbacks. Firstly, they are often very expensive in terms of cost of time, compared to internal staff. Secondly, they often turn out not to have the expertise claimed for them, and finally – worst of all in my view - they are sometimes misdirected by a Council which is unclear about what they have been employed to deliver in the first place. One example of when this can happen, perhaps ironically, is when consultants are employed in order to identify ways of saving money.

A fashionable cost-cutting theory at the moment is one arising from manufacturing, suggesting that organisations should become “lean“, following a theory which “considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination”. So far, so difficult to argue with (unless you work in the advertising or sales department, I guess). Now Lean is making the leap into the public sector, and certainly advice on saving money is welcome. However, there is a big problem. Wikipedia again;

“Working from the perspective of the customer who consumes a product or service, “value” is defined as any action or process that a customer would be willing to pay for.”

Now tell me who my customer is. For now, let’s imagine that I am working in a department providing services to children with serious disabilities. There are a string of people who might be my customer - sufficient that this is not a theoretical debate, but one any Council using this sort of method needs to be absolutely clear about before proceeding. I am not arguing against setting about the process of saving money, this is increasingly urgent, but to do so in a counter-productive way which either doesn’t save money, or later needs to be undone, may be worse than failing to do it at all.

1. The Child: I am employed to improve the quality of life of a disabled child. My success should, in principle, stand or fail on how well I achieve that, within the resources available. Of course depending on the extent of the disability and the age of the child it might be difficult for them to tell me how effective I have been. So, customer number two:

2. The Parents: They will have the strongest interest going in the wellbeing of the child, as well as hopes and fears of their own, and a potential need for ‘respite care’ if the disability is such that they are acting as full-time carers. Arguably my services are being provided as much to them as they are to the child, and therefore they should be included as ‘customers’ just as much, in any Lean analysis. However, parents will always want the best for their child, and it may not be possible to provide “the best” in every case, because the best is expensive, and there’s customer number three to consider.

3. The Taxpayer: In theory the taxpayer will have no problem with us going ‘Lean’, since while they are a customer in the sense of being the one who pays for the service delivered, there is no direct link at an individual level between the tax they pay and the service received. The parents of the disabled child might be happy to see taxes rise in order to fund better services for disabled children, but many people don’t have children, and most children are, happily, not disabled. Do I spend money on a newsletter about Council services, so that they can see what great work is being done with their money, or do I save that money so that they can pay slightly less tax, but have no idea what is being done with it? Hopefully there’s a way to cut that Gordian knot, but it lies in understanding different aspects of the customer relationship from those which will be explained by Lean. One person who might help me is customer number four.

4. The Councillor: Cabinet member, Scrutiny Chair, Ward Councillor, it doesn’t matter. These are the people who vote through my wages and the plans that set out what my service should be delivering. I am accountable to them, and clearly they will place a high priority on the outcomes for the specific customer of each service, but they need to know what those are – which means a string of activities which are unlikely to be Lean – collecting data when I could be working with children, attending scrutiny meetings when I could be attending parental meetings, and so on. Of course Councillors are not masters of their own house either, because of customer number five. 

5. The Government: Local government is, famously, a creature of statute. The services it provides are, to a very great extent, those dictated to it by central government. Furthermore, the success or failure of those services is often also judged by central measures, rather than local feedback.

While there has been some welcome progress by Government over recent years in moving to indicators of success, rather than indicators of process, there are still major problems. Collecting reams of data is not Lean. Employing people specifically to liaise with inspectors is not Lean. Directing activity to meet arbitrary targets which do not really benefit the service user is not Lean. Yet I can give examples of Councils who have commissioned consultants to save money who have wholly disregarded this, and found themselves slammed in their Comprehensive Area / Perfomance Assessment, despite their services not having worsened in any appreciable way. Unfortunately, this has a significant impact on customer number six, to whom both customers four and five should in theory be accountable:

6. The Voter: The average voter will, of course, be both a service user and a taxpayer. It is statistically likely, however, that they will pay for more services than they receive – simply because a large proportion of spending is concentrated on a small number of people – disabled young people, the very elderly, troubled families, and so on. Should we treat the voter as a customer, directing resources to engaging them more in planning services, delivering local forums, and informing them of the work of the Council, or should we treat that as non-Lean activity, and focus on pure service efficiency?

As usual I’m not trying to suggest answers to these questions – I’ll make it very clear when I think I have answers! – but I think it is important for the Council to be clear about the relative needs of these possible “customers” – as well as others with whom it engages – local businesses, other partners in the public sector, local Members of Parliament, newspapers and, heaven forbid, bloggers – in order to get value for money out of an analysis of spending and potential efficiency savings – whether delivered through Lean or any other way. 

Oh well, at least it’s not six-sigma!

Erin go broke

As Iceland’s banking system spiralled into disaster, I didn’t really say anything – it just seemed so obvious that I assumed everyone who needed to know, knew. Evidently, I was wrong. Therefore just in case any Councils have reserves with them: All Ireland’s major banks have had their ratings downgraded.

Always be a good boy, don’t ever play with guns

“Lisa, if you don’t like your job you don’t strike. You just go in every day and do it really half-assed. That’s the American way.” – Homer Simpson

Does anyone have a job that involves them in delivering an objective with which they fundamentally disagree? What do you do? I have always been fortunate, whether because I have very flexible principles, or because I have always worked for wise Councillors and managers. I have never been told that a policy needed to be implemented, and found myself wholly at odds with it - but I imagine it could happen. This might sound like a random stream of consciousness, but I was talking to a friend recently in Children’s Services, and he regards a large part of his job as being, and I’m only paraphrasing very slightly, to make sure “no child convicted of criminal behaviour is ever given a custodial sentence”.

Now, he’s fully signed up to this, and of course I buy a lot of the arguments – sending, say, a young shoplifter to prison at their first conviction is just as likely to lead them to an extended life of serious crime as it is to scare them straight. Community sentences can work, but more important still is his wider work – trying to figure out what went wrong, sort out their family life if possible, get them into some kind of intensive fostering if not, and find them other opportunities to give them an ambition for a more productive life than that of petty crime.

But a lot of these kids aren’t naive young shoplifters tempted in the heat of the moment. A fair number of them are serial offenders terrorising their local communities, which are looking to the Council to help them deal with the impact that’s having on local quality of life, just as much as the youngster might be looking to us for a way out. Some of them can of course be turned around by non-custodial measures, but some of them seem to see the help they get as a get-out clause, put on the crocodile tears long enough for the magistrates, and then head straight back to their life of crime. At least one of them has committed a serious sexual assault. And sure, they have a troubled home life, and so on – but I imagine their victim has quite a troubled life too, if they didn’t already. One only has to look at this morning’s front pages to recognise that very young children are capable of acts which I cannot find a word other than ‘evil’ to describe.

So I’m torn, I don’t know to what extent this “no kid goes into custody” is a Council policy, to what extent the elected Councillors know about it, and what would happen if the local newspaper decided to make a scandal out of the fact that taxpayers’ money is being used to keep free precisely the people that I would bet most local voters want us to help catch and lock away. Or is this largely driven by professionals who hold to a sociological theory of crime? What happens when one of them reoffends in a really serious way, and the national papers get hold of the fact that he was kept out of custody largely on the sayso of a council officer?

What would you do if you found yourself in that role, and those were the pressures on you – but you believed custody was sometimes the right option? Or do people who feel that way just not go into children’s social work? Alternatively, what if you believed that there was always a better alternative to custody, but the Council adopted a policy requiring you to support custody for certain offences, or after a certain number of repeat offences?

I don’t have any easy answers, and maybe the problem often solves itself, as in this case, by the jobs people choose - I was just wondering!

Council Tax – reprise

Excitement has broken out at ConservativeHome over Conservative Councils charging lower Council tax. This is measured by Band D, the “average”. Labour’s response is that Band D isn’t a fair comparison, and what should be used is the figure for how much the average house pays. The Conservatives say that using that comparison is “thoroughly dishonest… because you have huge fluctuations in property prices between different authorities“.

At risk of getting my graphs out again, I think both parties are behaving unhelpfully here. Band D certainly isn’t a real average in any meaningful sense – the average house in England is actually something like B and three quarters. So to an extent Labour have a point. Imagine for the sake of argument two Councils with only one house each in them. Poshville has a mansion house in the grounds of the Town Hall, which is in Band H, and charges the resident £1500 a year. Slumton has a council bedsit in the basement of the Town Hall, in Band A, and charges the resident £600 a year. Now according to the Band D principle, Poshville’s Council Tax is £750 a year, and Slumton’s is £900 a year. Would it really be fair to say that Poshville has set a lower Council tax than Slumton? All else being equal, Slumton raised less tax, and has less to spend on local services.

This is not an academic example – compare a Band F property in the Midlands with a Band G property in London, and consider what this might mean for the proportion of properties in each band in that area, whether the residents of the London studio flat would recognise a description of their local Council tax as “lower” if it was the same as that paid by the residents of the 3-bed place in the Midlands, and the total money therefore likely to be raised by a Band D rate of, say, £1000, in each of those Council areas.

Average actually charged per dwelling, however, pushes up the apparent charge for areas which have disproportionately large houses, it shouldn’t push it up for those which merely have disproportionately expensive houses, since that will “come out in the wash” by allowing a Council to set a lower Band D, and allowing the more expensive housing to catch the income back up. So, if Poshville’s mansion house is in fact rented out to five sharers, but the studio flat in Slumton is merely occupied by a young couple, we would want to look at the Council Tax paid per head. At this point we discover that each council is in fact charging the same – £300 a year, despite the huge variation in the ”headline rate” and the substantial variation in the “per dwelling rate”. Score one against the Labour case as well, then.

This thought may explain a further quirk shown up by the Conservative figures, the very high figure for Band D among Lib Dem Councils could be down to the fact that Lib Dems are doing well in areas where there is high population density, but multi-occupancy housing rather than many small flats – broadly areas with a lot of students or ethnic minorities. I’m not sure, but that feels intuitively plausible.

It should also be said that £25 a month is probably a greater burden to someone living in a Council bedsit than it is to someone renting a room in a mansion, so Poshville could use the measure I ended up with in my previous post – tax per head as a percentage of median resident wage, and come out with a lower number. That would certainly be more legitimate than comparing Band D, a largely mythical average.

The more important point though, which is picked up by some of the commenters on the original article, is that Council Tax charged isn’t a terribly useful measure of anything, particularly when comparing one authority with a completely different one. The costs of delivering services differ substantially – for obvious reasons more will be spent on caring for elderly people in Eastbourne than in Cambridge, and more will be spent on tourist centres in Cambridge than in Slough. In any case, at a time when spending pressures are high but Council tax is capped, most of the locally determined difference in tax levels is likely to reflect past decisions, and therefore potential the priorities of a different party.

All else being equal, there may be a fair comparison between Councils around rate of increase, but even that will often be driven more by the Government’s funding decisions and the Council’s need to “make up the difference” than by the Council’s own choices around spending. If pushed to come up with a measure which allows comparison my instinct would be to go for aggregate spending as a percentage of resident Gross Value Added, but I can’t imagine that ever making it onto an election leaflet! (and I’m not even sure it’s collected at a more local than regional level). It could also make some councils look profligate when in fact they just have large populations who require services but don’t generate much GDP – pensioners, schoolchildren, and so on.

I think that made sense. I attribute any statistical errors I’ve made to April Foolery, on the “I was just testing” principle.