How to Reduce Council Tax Bills

East Hampshire District Council has managed to freeze its council tax rate for seven years due to the innovative policies of its council leader Ferris Cowper. While he has been in charge, his council has never put up its tax by a penny (crucially, without ever axing a 'frontline' service and without fining people for putting the wrong stuff in recycling bins) and he plans further reductions in the next three years.

His council of 200 square miles has not won the lottery or found oil or gold on its land but there has been a change of attitude together with commercial common sense and a willingness to think outside the box.

The council employs a chief executive on £120,000 a year (half the salary of some town hall CEOs, as some 2,300 town hall executives now earn more than the Prime Minister) but because she simultaneously runs the council in nearby Havant, the cost to East Hampshire is £60,000. The same arrangement applies to several other executives. Other philosophies that underpin the strategy are no fancy HQ, open plan offices, and no 'occupation of office space with personal possessions'.

Low-risk commercial property has been purchased instead of leaving the council's cash reserves in the bank earning negligible interest. The portfolio, now worth up to £100 million, ranges from a bank in the local town centre to a village branch of the Co-op, .

The council uses its staff and premises to run businesses from a printing operation to a regeneration consultancy. It rents out its planners, its traffic wardens and even its bin collection service to neighbouring councils. Having given its HQ a modest refurb, it now rents out vacant office space to the police. There are plans to regenerate the old military garrison town of Bordon with thousands of homes on old MoD land.

While councils have to play it safe with public money and most are naturally risk-averse, Mr Cowper believes you need to move from risk-aversion to balanced risk, giving you as much chance of success as failure. Councils must now follow new guidelines and take extra care with such investments, but East Hampshire has gone for rock-solid loan investments for the long term, based on yield, not capital growth.

Critics point out that a district council does not have to worry about the burden of adult social care which falls to the local county council, which is behind so many council tax rises. However, Mr Cowper sees no reason why his council should not be paying for that too, a few years in the future.

East Hampshire is a small authority with a small budget of around £30 million and 270 staff, while big councils have £1 billion-plus budgets and more services to deliver, but  maybe the same approach could work for them.

Source: DailyMail new item 14 February 2018.