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What is Council Tax?

Council Tax is a local tax that helps to pay for a wide range of public services in your borough.

Each household receives a bill and the amount each household pays depends on which property valuation band the home is in and any discounts or exemptions that apply. 

There are 8 valuation bands which relate to the value of the property on 1 April 1991, with the value of new properties being assessed back to this date. 

In addition to Merton’s Council Tax, the Council also collect an amount of Council Tax on behalf of the GLA, and households within three quarters of a mile of Wimbledon Common are required to pay an additional levy for Wimbledon and Putney Commons Conservation.

Leader's letter to residents

Council tax charges and bands

The amount of council tax you pay depends on which of the eight bands your home comes under.

We use band D charge as the basis for working out the charge for the other bands. For example, the charge for a band D property for 2023/24 is £1,883.82.

To work out the cost of a band A property in the main part of the borough it’s £1,883.82 x 6/9.

Band

Property value (on 1 April 1991)

Proportion of band D charge

Council tax charge

(main part of borough)

A

Up to £40,000

6/9

£1,255.88

B

£40,001–£52,000

7/9

£1,465.18

C

£52,001–£68,000

8/9

£1,674.50

D

£68,001–£88,000

9/9

£1,883.82

E

£88,001–£120,000

11/9

£2,302.45

F

£120,001–£160,000

13/9

£2,721.07

G

£160,001–£320,000

15/9

£3,139.70

H

£320,001 upwards

18/9

£3,767.64

If you live within the area of Wimbledon and Putney Common you pay an extra £35.96 (Band D) to cover the expenses of the Commons Conservators. Including this charge, the Band D charge is £1,919.78.

You may not have to pay the full council tax charge as you may be entitled to a discount or an exemption

What council tax helps pay for

Council tax helps pays for the local services we provide. With the introduction of the Adult Social Care Levy there are four main elements to the charge:-

  • spending on local services, such as education, waste collection, green spaces, and care services including levies , which the Council is required by statute to pay to  the Environment Agency, the London Pension Fund Authority, and Lee Valley Regional Park.
  • Spending on adult social care which is ring-fenced and funded by the Adult Social Care precept
  • the GLA charge for the services they provide, such as police and fire services which is collected by the Council and passed to the GLA
  • If you live within the area of Wimbledon and Putney Common you pay an extra £35.96 (Band D) to cover the expenses of the Commons Conservators.

Merton's Band D Council Tax

2022/23
£

2023/24
£

Change
£

Change
%

Merton General Precept

1,236.77

1,278.06

 

 

Merton Adult Social Care Precept

144.10

171.62

 

 

Merton Band D exc. WPCC

1,380.87

1,449.68

68.81

*5.0%

GLA Precept

395.59

434.14

38.55

9.7%

Merton Band D inc. GLA exc. WPCC

1,776.46

1,883.82

107.36

6.0%

WPCC

32.14

35.96

3.82

11.9%

Merton Band D inc. WPCC & GLA

1,808.60

1,919.78

111.18

6.1%

* Of the 5% increase in Council Tax, 3% (£41.29) is for Merton’s general precept and 2% (£27.52) is for the Adult Social Care Precept.

Average Council Tax

The Government require the Council to express its Council Tax as an average. Merton’s  average 2023/24 Band D council tax is £1,455.13. i.e. across the Council’s area most properties pay the general Council tax but some properties also pay the Wimbledon and Putney Commons Conservators levy. The total council tax raised for Merton’s services across the borough is then converted to an average although no properties pay the average, they either pay the Merton Council Tax (Band D = £1,449.68) or the Merton + WPCC Council Tax (Band D = £1,485.64)

The 2023/24 average council tax (Band D) including the GLA precept is £1,919.78.

Image
Band D CTAX

Precept

Local authorities with responsibility for social care, such as Merton,  may levy a precept to

spend exclusively on adult social care. For 2023/24, without triggering the need for a local referendum, councils such as Merton are able to increase their council tax level by 5% (comprising 2% for adult social care precept, and 3% for other expenditure). The 2023/24 Adult Social Care precept (Band D) has been set at £27.52 (2%)

Our main income sources

Our main sources of income are:

  • fees and charges – charges that we make for services that we provide
  • business rates – these rates, called National Non-Domestic Rates, are the means by which local businesses contribute to the cost of providing local authority services. Under the Business Rates Retention scheme in 2023/24 we keep 30% of our income from business rates, 37% goes to the GLA with the remaining 33% being paid to central Government.
  • revenue support grant – a Government grant which can be used to finance revenue expenditure on any service. Under the 2023/24 arrangements Merton will receive Revenue Support Grant of £6.108m.
  • Other Government Grants – grants from Government which are usually allocated to fund specific services.
  • collection fund – this is any surplus or deficit from previous year’s council tax and business rates. Due to the pandemic leading to significant deficits on Collection Funds in 2020/21, local authorities are in the third and final year of a government scheme that allows them to spread exceptional balances from 2020/21 over the following three financial years 2021/22 to 2023/24. This is added to any surplus/deficit from 2022/23.
  • council tax requirement –this is an estimate of the income we’ll raise from council tax in 2023/24.
  • budget requirement –this is an estimate of what we will spend in 2023/24 after deducting income raised from services we charge for, government grants and any funding from reserves.

How is Council Tax calculated?

  1. we plan our services for the coming year and work out how much they will cost to provide
  2. we deduct any income that we expect to receive during the year from fees and charges, government grants and other contributions, and a share of business rates (30%)
  3. the resulting balance is the amount we need to fund from Council Tax. The Council Tax is calculated by dividing this figure between all properties in the borough, taking into account the different Council Tax property bands

Our main income sources

Main income sources in 2023/24 and amount raised per head.

  • fees and charges – charges that we make for services that we provide
  • business rates – these rates, called National Non-Domestic Rates, are the means by which local businesses contribute to the cost of providing local authority services. Under the Business Rates Retention scheme in 2023/24 we keep 30% of our income from business rates, 37% goes to the GLA with the remaining 33% being paid to central Government.
  • revenue support grant – a Government grant which can be used to finance revenue expenditure on any service. Under the 2023/24 arrangements Merton will receive Revenue Support Grant of £6.108m.
  • Other Government Grants – grants from Government which are usually allocated to fund specific services.
  • collection fund – this is any surplus or deficit from previous year’s council tax and business rates. Due to the pandemic leading to significant deficits on Collection Funds in 2020/21, local authorities are in the third and final year of a government scheme that allows them to spread exceptional balances from 2020/21 over the following three financial years 2021/22 to 2023/24. This is added to any surplus/deficit from 2022/23.
  • council tax requirement –this is an estimate of the income we’ll raise from council tax in 2023/24.
  • budget requirement –this is an estimate of what we will spend in 2023/24 after deducting income raised from services we charge for, government grants and any funding from reserves.

How is Council Tax calculated?

  1. we plan our services for the coming year and work out how much they will cost to provide
  2. we deduct any income that we expect to receive during the year from fees and charges, government grants and other contributions, and a share of business rates (30%)
  3. the resulting balance is the amount we need to fund from Council Tax. The Council Tax is calculated by dividing this figure between all properties in the borough, taking into account the different Council Tax property bands
  4. Main income sources in 2023/24 and amount raised per head.

Funding sources 2023/24

£m

%

£/head*

Government Grants

24.9

14%

£115.59

Business rates

39.5

22%

£183.72

Revenue Support Grant

6.1

3%

£28.38

Collection fund

-0.7

0%

-£3.13

Council tax requirement

112.2

62%

£521.49

Image
our main funding sources

Medium Term Financial Strategy (MTFS)

You can view our financial plans for the next four years in our Medium Term Financial Strategy

The services we deliver

This table shows the amount we plan to spend on council services in 2023 to 2024 compared to last year

 

2022/23

 

2023/24

 

Gross Expenditure
£000’s

Income
£000’s

Net Expenditure
£000’s

 

Gross Expenditure
£000’s

Income
£000’s

Net Expenditure
£000’s

Corporate Services

119,002

(106,399)

12,603

Corporate Services

122,078

(107,318)

14,760

Children, Schools, and Families

249,220

(183,183)

66,037

Children, Schools, and Families

267,357

(197,826)

69,531

Environment and Regeneration

70,098

(52,452)

17,646

Environment and Regeneration

72,771

(54,770)

18,001

Community and Housing

101,208

(30,354)

70,854

Community and Housing

118,382

(42,858)

75,524

Levies

982

0

982

Levies

1,040

0

1,040

Investments and Provisions

38,557

(27,289)

11,268

Investments and Provisions

35,961

(32,813)

3,148

Planned Expenditure

579,067

(399,677)

179,390

Planned Expenditure

617,589

(435,585)

182,004

Contribution to/(from) Reserves

0

(12,086)

(12,086)

Contribution to/(from) Reserves

68

0

68

Net requirement for tax purposes

579,067

(411,763)

167,304

Net requirement for tax purposes

617,657

(435,585)

182,072

 

 

 

 

 

 

 

 

Memorandum:
Public Health

10,767

(10,767)

0

Memorandum:
Public Health

12,470

(12,470)

0

*Public health funding is provided by the NHS and is not part of our services. We have included it to show that it is money we are responsible for although it has no effect on the level of council tax set. 

Planned spending for 2023-24

This chart shows the figures in a pie chart from the 2023 to 2024 income and expenditure table

Image
how the money will be spent

Changes in our revenue spend from 2022-23 to 2023-24

 Our spending has gone up from £167.304m in 2022-23 to £182.072m in 2023-24.

Item £000

Revenue Spending 2022/23

167,304

Savings in Service Provision

(6,458)

Growth in Service provision

3,755

Social Care

6,615

Pay and Price increases (Net)

14,207

Provision for DSG Deficit

(8,003)

Other adjustments, concessionary fares, income etc.

1,057

Capital financing and Investment Income

(5,409)

Appropriations to/(from) reserves

9,004

Budget Requirement 2023/24

182,072

Levies

These are the bodies we pay levies to. These are set by the bodies and we do not have a choice in paying these.

Levy

2022/23
£

2023/24
£

Lee Valley Regional Park

179,223

197,385

Environment Agency: Flood Defences

178,492

183,743

London Pensions Fund Authority

254,302

254,302

Wimbledon and Putney Commons Conservators

376,231

422,948

Total Levies

988,248

1,058,378

Borrowing

We estimate our long-term borrowing to fund capital programme projects which help improve the borough’s economic well-being, to be £95m as of 31 March 2023.

It is expected that this will reduce to £83m at 31 March 2024. 

The interest charges arising on this amount are financed from the council’s resources.

Staff

We estimate the number of staff we will employ (calculated on a full-time basis) in 2023/24  to be 2,000 This compares with a total of 1,929 in 2022/23.