TV show costs councils (From Witney Gazette)

TV show costs councils

6:45pm Thursday 24th January 2008 in Headlines By Reg Little

SIR TREVOR McDonald is being blamed for the loss of millions of pounds from Oxfordshire's councils.

A television documentary hosted by the News at Ten presenter resulted in hundreds of residents successfully appealing against their council tax banding.

It means thousands of pounds are having to be handed back to residents who have been overcharged over years, with councils in Oxfordshire estimating that it will cost them more than £2m next year.

It has emerged that some of the banding reductions must be backdated 15 years, resulting in some householders being paid back sums in excess of £2,000.

The banding changes hit councils in two ways - reducing the amount of council tax they receive and also burdening them with one-off repayments to people who have been incorrectly banded.

As Oxford City Council was finalising its budget, councillors were being warned that the banding appeals meant the council would end up with £200,000 less from council tax next year than it had been expecting.

Oxfordshire County Council, which receives the biggest proportion of council tax money, confirmed it would be £1.8m down next year.

The councils were taken aback by the scale of the local public response to the Tonight with Trevor McDonald programme that went out last year.

It highlighted how thousands of homes were in the wrong band because of inaccurate valuations carried out back in 1991.

It resulted in more that 300 families in Oxford alone successfully appealing to win council tax reductions of up to £120 a year.

Those living in the same property since the introduction of council tax are entitled to rebates back to 1993.

The scale of the problem will be set out in a financial paper to the city council executive on Monday.

Councillors are told: "Primarily as a result of a Trevor McDonald TV documentary, we have received a large number of banding reductions, some of which go back to April 1993.

"These changes indicate that the tax bases previously estimated for 2008-9 onwards were overstated. These have been amended accordingly, resulting in a reduction in the estimates of the council tax yield."

The blow to the councils could not come at a worse time for the financially-pressed city council, which is faced with making savings of £8.1m.

It will also put pressure on the Liberal Democrat administration's hopes of a below-inflation council tax increase of around two per cent.

Jim Campbell, executive member for finance at the city, said: "It means that our projected income is less than expected. This is certainly another pressure.

"If Oxford is typical, it seems to have been a very important programme. It seems that one programme has done a great service to a number of individuals across the country, if not to the local authorities who collect the council tax.

"But all these complications show what an unsatisfactory and flawed system council tax is."

It means the city council's share of council tax receipts, estimated to be £11.54m will have to be downsized by close to two per cent, eating up practically all the proposed council tax increase.

Charles Shouler, Oxfordshire County Council cabinet member for finance, said: "There have been appeals, with people having banding reduced. The net effect is that we will have £1.8m less than we would have had. This is money that could have meant more investment in services, or it might have allowed us to reduce council tax increases to 3.5 per cent, if this had not occurred.

"But we have to live with the facts of the situation. The refund payments will be a one-off but the changes to the council tax base will be ongoing."

Council tax charges depend on the 1991 valuation of house prices.

Homes were graded from A to H. But there were suggestions of 'second gear valuations', with estate agents simply driving past houses to allocate bands.

Tonight with Trevor McDonald highlighted how consumers could check the tax band of neighbours and similar properties on the internet, holding out the prospect of millions of householders being able to claim back thousands of pounds.

The Vale of White Horse and other district councils confirmed that they had experienced an increase in banding appeals.

Meanwhile, Oxford City Council is facing another major financial pressure, with councillors next week being asked to set aside £800,000-a-year over three years as a result of a staff pay review.

It follows a job evaluation exercise, partly introduced to ensure equal pay among sexes, which has established that a significant number of its staff have been underpaid. Local authorities were ordered by the Government to carry out "a single status" review, designed to make the salary structure fairer.

But it is certain to lead to widespread upgrading. About a third of staff, however, may find they have been overpaid.