Has Boris Johnson saved every Londoner £445?

Published: 7th Mar 2012

"The Mayor, who has said he will cut his share of the council tax precept if re-elected, will claim he has put £445 back in Londoners' pockets by freezing the tax over the past four years."

Evening Standard, 2 March 2012

"Putting £445 back in your pocket by freezing the Mayoral share of council tax"

Boris Johnson, BackBoris2012

Boris Johnson has raised the stakes in the upcoming mayoral elections by launching a nine-point plan for London's future, the Evening Standard reported ahead of his speech to the Conservative Party Spring Forum.

In revealing his vision for the capital, Mr Johnson claimed that by freezing - and then cutting - council tax over the past four years, he has put £445 back in Londoners' pockets.

This money saving achievement has since appeared as the second of nine pledges to the electorate. But does it add up?

Analysis

The overall council tax rate in London is not set by the Mayor, but rather local borough councils. However the Mayor does take a sum from this total set by him known as the Greater London Authority rate, which accounts for the Metropolitan Police, the London Fire Brigade and Transport for London on top of the Mayor and the GLA. It is to this portion of council tax that these claims refer.

With this in mind, we can set about examining the statistics behind the claim. The Department for Communities and Local Government provide figures on average Band D rates set by every precepting local authority from 1993/4 to 2011/2. This presents us with a clear view of the charges brought by City Hall under both Ken Livingstone and Boris Johnson's tenures.

Under Ken Livingstone (2000 to 2008), the GLA's segment of council tax revenue rose from £123 to £310, a difference of £187, or 152 per cent, as one Conservative Party website puts it.

Boris Johnson has, in contrast, frozen the levy for the last three years, proposing a one per cent cut for 2012-13, in time for the mayoral election in May. This would decrease the rate for every Londoner from £310 to £306.90, a fall of £3.10.

So how does this translate into £445 saved?

The number is based on the cumulative impact on a Band D household of the average increase under Ken Livingstone of 12.58 per cent, assuming he won a third consecutive term as mayor. The 12.58 per cent figure is calculated by adding together the annual percentage increases in the GLA proportion of the council tax and dividing by eight years.

The relevant calculations are as follows:

By calculating the percentage changes for the period in which Ken Livingstone was mayor, there was indeed an average increase of 12.58 per cent for each year he was in power. 

This figure, assuming it continued past 2008, produces the following comparison:

Subtracting the Boris Johnson total from the assumed total for Mr Livingstone over the course of this mayoral term [£1,992.24 - £1,546.90] gives the £445 figure used by the incumbent Mayor in his nine point pledge.

However this is, of course, based on the assumption that the projected increases for Ken Livingstone would happen. His campaign team deny this is the case, and sent Full Fact the following statement:

"They have magicked this [the £445 figure] up by comparing Boris Johnson's council tax freeze against imaginary council tax rises from Ken - so it's not a new offer at all. In fact Ken has supported all the council tax freezes in the last four years, which makes this claim entirely bogus.

"Crucially, this is dressed up as a future pledge but refers back to a false claim about the last four years, not the next.

"They use the average rise under Ken Livingstone in his eight years. The precept rose to fund an expansion in police numbers, which had been falling for a decade and rose by a third under Ken to more than 33,000. In Ken's last year as Mayor, the precept rose by 4.8% as funding for police numbers was appropriate.

"Ken and the Labour Party supported each of the council tax freezes in this Mayoral term. His whole pitch is to preserve the living standards of Londoners now they are really struggling. "

Conclusion

If Ken Livingstone were to continue to raise the GLA council tax take at the same annual rate that he averaged in his previous tenure, then Boris Johnson's figures have some grounding.

However it is hotly disputed that this would indeed transpire, and is clearly conjecture on the part of the sitting Mayor rather than the fact it is presented as.

Mr Livingstone's team argue that rises in the early years of his inaugural term in City Hall owe to increases in spending on services which would not need to be repeated, and there is data that adds some weight to this perspective: the average annual increase in Mr Livingstone's second year was approximately half the 12.5 per cent average.

So while we cannot yet know whose spending projections are nearer the mark should Mr Livingstone be the one to draw up the capital's next budget, the £445 is certainly not yet money "in your pocket" as Mr Johnson claims.

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