Household Charge and the problem of unreformed and unaccountable local government

Talk to any politicos in London, or indeed anyone politically aware enough to notice in other parts of England and you’ll hear them heap praise on Ireland’s determination to get itself out of the deep bog the bank guarantee dropped it into.

But the funding mess is being further complicated by the government’s determination to fast track what’s called a household charge. To those of us living in the UK, that’s an equivalent of the regional or district rates.

This was abolished by Jack Lynch’s government in the late seventies (on foot of a manifesto promise in the 1977 general election) and in the process broke any local accountability between councils, councillors and their constituencies.

The charge is just €200 (£167) erm, that would be €100 (circa £83)… But so far only 85 83% of the people have paid it.

A sullen revolt of the greybeards… says Gerry McKeever in a piece in yesterday’s New York Times

Fianna Fail laid down an amendment to the legislation calling for a six month delay in implementation and bringing in an option to pay in four monthly payments… It was rejected…

Yet, the difficulty in knowing even how to pay it is undoubtedly a part of the problem too (inflating the apparent size of the ‘revolt’… Yesterday, Eamon Gilmore was caught out in the Dail yesterday, when he suggested people could pay it at the local post office… Well, they can get the forms, but they can’t actually pay it there.

Everything about this suggests the government has allowed itself to be prodded into premature action, not just because it requires a whole new mechanism for collection (since central government has been paying for councils for a generation or more).

It also implies that much deeper long term reforms are required to reassure people that this is not just about paying off external central government debt. They need to see the connection between what they pay in and what comes out the other end.

Suzy Byrne has probably got one of the best unspun accounts of the problem:

The ‘trick’ of removing funding for local government from the book of estimates and saying that the household charge is going to fund all these ‘important’ things won’t fool many. Neither will it wash when the government start saying that people have not paid their household charge so services have to be cut further. And it does not reform local government or the mess that is local authority housing and regeneration, stop the closure of libraries, the absence of regulation of bin charges and private operators, the lack of local play and recreation facilities in many areas. It won’t stop TD’s interfering in local politics either or concentrate their minds on national issues.

And she concludes:

I am in favour of a progressive property tax but what are the chances when it is finally introduced that the money will remain ring fenced to fund local amenities and administration? The household charge is another example of this government introducing charges or cutting payments without reforming anything and in this case the continued neutering of local democracy.

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  • Bangordub

    “The charge is just €200 (£167)… But so far only 85% of the people have paid it.”

    Sorry Mick, I believe its about 20%

  • Mick Fealty

    I was going by the NYT report, but I think you’re right…

  • Bangordub
  • Mick Fealty

    It’s got to be changing day by day… As people work out how to pay it, that they have to pay it and that the deadline is coming up… And have to contact the government to pay it… it’s not as though you’re getting pestered to pay it…

  • Scáth Shéamais

    Registration for the household tax currently stands at 18%.

  • Bangordub

    http://www.irishtimes.com/newspaper/ireland/2012/0322/1224313703045.html
    Thanks Scath,
    Link is to Irish Times report yesterday

  • Mick Fealty

    Look, it’s the issue underlying that interests me… And it’s clear that (whatever Phil Hogan’s part in this) the government was under pressure to reinstate a local tax it struck out 35 years ago in double quick time…

    That’s one reason why I personally would resist the temptation to dub it a revolt… it’s not as elegant as that… the Government let alone did not get their accounting systems ready, they haven’t sorted out their billing systems (which ought to be routed through the council concerned, if that’s who it really is going to, either.

  • Glenhead

    I reside in London, but born & raised in Donegal, and have a holiday home in Donegal. I already pay €200 to Donegal County Council for the privilege of staying there for a month every year. Reading the comments in your column a continuous reference is being made that the household charge is €200 – I was given to understand that this charge is to be €100. The most ridiculous charge of all is the one for the use of septic tanks and, to add insult to injury, council houses are exempt.

  • Mack

    The charge is actually €100 not 200. It’s the non-ppr charge for Landlords brought in a few years back that is €200.

    Very few are paying it at the moment. I think they are planning on bringing in a site valuation tax, which is fairer all round and argued for here –

    http://sluggerotoole.com/2010/07/09/on-the-necessity-of-a-land-tax/

  • wee buns

    FG’s finger is way off pulse here; underestimating public anger in a manner reminiscent of the late great FF – because when you get a mainstream squeaky clean DJ like Ray D’Arcy advocating a ‘No Pay’ position – he knows, and lord knows FG should know , there is no way this tax is going to be paid by the majority. This is certainly a revolt, demonstrably so when large numbers of householders appear to be making the 100 bucks payment to Crumlin Children’s Hospital in preference to paying the government. Who said the Irish have no sense of civism?

  • John Ó Néill

    Irish Times says that 300,200 only 18% had paid charge as of yesterday. According to the various press reports, on 20th Feb it was 109,600, on 28th Feb it was 142,000, on 8th March it was around 200,000 and 250,000 on 16th March. So it has been consistently adding around 50,000 sign-ups per week for the last few weeks. There are an estimated 1.6m households which are required to register, so, as of yesterday, around 1,300,000 had not yet registered (and have a week to do so).

    People are required to register various details of the property which will be used to then scale up the residential property tax with no indication of whether it will be progressive or just a flat tax. Local authorities don’t provide much in the way of visible public services that can actually be cut and the property tax is generally regarded as another stealth tax.

    There are a series of categories of people who qualify for waivers and it’s not known what proportion of the 18% do not have to pay (I’ve included the detail on waivers and exemptions from householdcharge.ie below):

    The waivers from payment of the household charge are as follows:
    Owners of residential property entitled to mortgage interest supplement
    Owners of residential property located in certain prescribed unfinished housing estates (see Unfinished Housing Estates section for more detail)
    Persons claiming entitlement to a waiver are required to register their property.

    The exemptions are below (there is no requirement to register an exempt property):
    Residential properties that are part of the trading stock of a business and have not been sold or been the source of any income since construction,
    Residential property vested in a Minister of the Government or the Health Service Executive,
    Residential property vested in a housing authority, including property where households are purchasing their homes under the Shared Ownership Scheme and where the local authority still retains an ownership stake,
    Voluntary and co-operative housing,
    Residential property subject to commercial rates and wholly used as a dwelling,
    Residential property owned by certain charities or comprised in a discretionary trust, and
    Residential property where a person has to leave their house due to long-term mental or physical infirmity (e.g. a person that has moved into a nursing home).

    Even if all the properties were liable, and paid, it would net the state 1.6 billion euro which is just under half of the cost of the Anglo-Irish Bank debt they are trying to convert to sovereign debt with the ECB rather than pay on 31st March. It is hard to see how 1,300,000 properties are going to be registered in the last week, or, at least, enough of them for the government to claim that the optics are positive. Given that the government had budgeted for growth levels that aren’t there, and, for the income from the Household Charge, even kicking the Anglo can down the road one more time might defer a mini-budget by May but its not looking likely.

  • Talk to any politicos in London, or indeed anyone politically aware enough to notice in other parts of England and you’ll hear them …

    For a moment, I wondered if the topic might come nearer home and include “free” water: another social benefit denied the rest of GB.