Second Home Council Tax in the context of Local Government Reorganisation

I presented Norfolk County Council’s annual Budget to Full Council in Norwich on 18th February.

I have prepared a summary as a ‘Budget on a Page’ which can be found at the end of this article, but here I want to focus on the decision to charge a 2^nd Home Council Tax Premium and the basis on which I and my administration will come to a decision on the best outcomes from Local Government Reform.

The Borough of Kings Lynn and West Norfolk, North Norfolk District Council and The Borough of Great Yarmouth all voted to apply a 100% premium on second homes in their districts. Rather than hitting second home owners, I had vigorously lobbied the previous government to apply council tax to all homes, whether residential or buy to let. This was on the “if it quacks like a duck, it’s a duck” test: if it looks like a house it’s a house. However, the District Council Network lobbied against this, thinking, incorrectly, that they would receive more income from including buy to lets in their business tax take. In the event, most rental businesses keep their turnover below the level at which Business tax is levied, nor is a Parish Precept paid: local residents are thereby denied any revenue two times over.

However, we are where we are. For this year, it was agreed with Districts that 25% of the County share of this additional income in 2025-26 would be used to deal with increasing pressure from housing and homelessness. In the long term I will work to achieve a far more cost effective process via a streamlined Local Government and I believe this money, some £2,500,000, could thereby be saved for other uses.

The sort of scheme I have in mind is to grant 20%-25% of the funds raised by this premium directly back to the Towns and parishes where it is raised. This would mean that, despite paying the additional tax, second home owners would be able to see what their money was paying for. My headline proposal would be to directly fund locally worked out schemes for the following:

1 A fund to subsidise a number of specific bus services.

Rationale. A significant challenge facing rural communities is the ability for staff to access work and students to access training.

Example. Staff working at hospitality businesses on the A149 coast road are unable to get home by public transport after late night shifts.

The increase in the number of second homes has brought additional spending power to our hospitality businesses. The main challenge facing businesses is not customers but getting staff to and from their premises.

The aim would be to work with local businesses to identify a number of routes to subsidise to drive up demand, with the demand in time removing the need for a subsidy.

This model has been successful in our Bus Service Improvement Plan (BSIP).

2 Investment in broadband

Significant parts of our rural communities – particularly West and Norfolk – continue to suffer from poor broadband. NCC is investing through Government funded project gigabit and our low orbit satellite programmes.

Further investment in hard-to-reach areas with alternative provision such as satellite or boosted mobile on public sector buildings would enable us to accelerate these programmes and provide fast broadband to more rural parts of Norfolk.

Also we’d like to extend our digital inclusion programme – this award winning programme originally funded through Pooled Business Rates is helping isolated residents and businesses get online or access mobile phones.

3 Affordable housing grant fund

Affordable housing is a real challenge in rural and coastal communities, particularly those with a high concentration of second homes.

However, it would be possible to increase the number of affordable housing by offering an affordable housing grant. This would be designed to bridge the gap between market housing and affordable housing.

It is worth saying that the grant must provide additional affordable housing and not simply subsidise affordable housing that a developer is required to bring forward. It might be particularly useful on smaller sites where affordable housing is not a requirement; however, it could be used to subsidise the additional costs and charges to social housing developers, school charges for example, where such charges render such a scheme unviable.

5. Climate adaption fund

Areas with higher concentrations of second homes tend to be in coastal and rural areas which are prone to coastal erosion and flooding. A portion of second homes funding could be set aside to support projects which preserve and protect local communities from the impact of climate change.

6. The Norfolk Coast Protected Landscape Partnership is entirely focussed on supporting businesses and tourism in ways that work within the the natural environment

A fund to support sustainable tourism, active travel and supporting biodiversity through for example improving the county’s network of countryside trails and providing funding for smaller, community based schemes.

There are huge changes to coming to Local Government and the way we, the people, interact. Therefore, I would like to close by looking ahead: this Reform creates an opportunity for the Public Sector, not just local authorities. While dizzyingly complex the details may be, the overarching strategic objective is very, very simple:

• What is best for residents: for the people, communities and businesses in Norfolk?
• If Councillors or Councils argue for a structure that does not deliver the maximum savings: which should run into tens of millions of pounds a year, that must be justified to residents;
• If Councillors or Councils argue for a structure that does not deliver the greatest administrative efficiencies for social care, children's services, SEND, housing delivery, homelessness and public safety, that must be justified to residents;
• If the reorganisation process is made harder than it need be, costing many millions of pounds to disaggregate and reconstruct, that cost, in both money and welfare, must be justified to residents.
• If residents, parish and town councils do not feel they have democratic oversight and neighbourhood empowerment, they will hold Councillors and Councils to account.
• We must ensure a new landscape offers the most value for money, with the most efficient service: we have the chance to be far more streamlined: far less costly

If done right, a new unitary system supporting a new strategic authority will deliver tens of millions of additional investment and save tens of millions in the delivery of services.

It will enable towns and parishes to have significant influence on the things that matter most to residents.

It makes sense to utilise funding generated by second homes to support the very sectors they are utilising – strengthening these sectors and improving their resilience.

Deputy Leader of the Council andrew.jamieson.cllr@norfolk.gov.uk

Deputy Leader of the Council  andrew.jamieson.cllr@norfolk.gov.uk