Town halls blame council tax losses on IT

21 Jun 07
Computer glitches have been blamed for a substantial drop in council tax collection in 23 local authorities, leading to a loss of more than £26m from town hall budgets last year, Public Finance has learnt.

22 June 2007

Computer glitches have been blamed for a substantial drop in council tax collection in 23 local authorities, leading to a loss of more than £26m from town hall budgets last year, Public Finance has learnt.

Figures published by the Department for Communities and Local Government on June 19 showed that, overall, local authorities in England increased their council tax and non-domestic rate collection by 0.01% between 2005/06 and 2006/07. But in 23 councils collection rates dropped by one percentage point or more, leaving councils £26.14m down on the year before.

The biggest drop was at Bradford City Council, where the fall from 95.2% in 2005/06 to 91.8% in 2006/07 meant the council forfeited £4.64m last year. A spokeswoman said: 'While the council is disappointed with the short-term drop in performance, it was nevertheless expected during a period of significant change last year when we introduced a new integrated computer system that brought together the benefits and council tax systems.'

A spokeswoman for Birmingham City Council – which missed out on £4.19m council tax revenue in 2006/07 – similarly blamed the implementation of a new computer system which led to bills being sent out late.

The same reason was given in Rochdale, Tameside, Wirral and Manchester, which together lost £5.37m. Manchester also had the lowest council tax collection rate of 87.3% – almost ten percentage points below the national average of 96.9% – but a spokesman said that it was on track to increase collection to 90% in 2007/08.

Publication of the revenue and collection rates for 2006/07 followed the DCLG's publication of local authority expenditure plans for 2007/08. They showed that education, environmental services and police and rescue services would receive the largest expenditure increases of 7%, 8% and 7% respectively.

Spending on social services will increase by 4% overall, but services for older people would continue to be squeezed, with just a 2% increase in spending. Councils claim sector inflation is 5.3%.

Local Government Association chair Sandy Bruce-Lockhart said: 'Half the cash that councils spend comes from central government, and that includes no funding for demographic change such as the increasing number of elderly people and more people with mental and physical disabilities requiring care.'

PFjun2007

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