POLITICS

For now we see through an SSA darkly

NOEL MALCOLM

0 n April Fools' Day last year I re- ceived a letter from Mrs Margaret Hodge, the leader of Islington Council. It is always a pleasure to hear from Mrs Hodge, even when her communications are, like this one, wrapped round an extremely large rates bill. 'Dear Householder', she wrote,

This year's rates bill could be the last you ever receive. Thank goodness for that you might say. But I think that before long you might regret it. . . . Here in Islington we oppose the poll tax. Nevertheless the govern- ment is forcing its implementation. We are committed to persuading the government to get rid of this unjust and unfair tax. . . .

Accompanying this letter was a 36-page booklet, entitled 'Your Rates Explained', crammed with balance-sheets, tables, pie charts and, no doubt, pie-in-the-sky charts.

Well, there are explanations and there are explanations. Having searched through this booklet several times, I can still find not a single sentence which bothers to explain why the accompanying rates bill should have gone up by 20 per cent — nor why that part of it for which Islington Council is directly responsible should have gone up by 43 per cent. And if I, a moderately investigative and almost numerate journalist, am still in the dark about this, what proportion of Islington's 30,000 rate-payers — let alone its 140,000 adult residents — have even the faintest glimmering of an idea of what the explana- tion might be? Local government, which always claims to be more closely in touch with its voters than its remoter counter- parts in Whitehall and Westminster, de- pends in reality on a culture of ignorance.

In last week's debate on the financial mechanisms behind the poll tax, the En- vironment Secretary, Mr Chris Patten, appealed to two principles: 'clarity' and 'accountability'. If only he had added 'faith' — on which the Government is also heavily depending — we would be able to echo St Paul and say that the greatest of these is clarity. There can be no accounta- bility unless people understand in the first place how their money is spent, how their poll tax bill is calculated and why it goes up or down.

Will people understand this in future? Mr Patten seems to think so. 'There is little doubt', he declared, 'that local government spending will involve more clarity in future than it has in the past.' The most important reason he gave for this belief was the impending change in the way that central government calculates its grants to local authorities. In the past, these calculations have taken the form of 'Grant-Related Expenditure Assessments', which involved formulae of nightmarish complexity. In future they will be worked out as 'Standard Spending Assessments' (SSAs), the cal- culation of which, in comparison, will be simplicity itself.

Anyone interested in what counts as simplicity itself at the Department of the Environment should spend a few minutes (or days) studying The Revenue Support Grant Distribution Report (England), which explains these matters. Here, for example, is part (but only part) of the formula for calculating the SSA element for social services for the elderly:

(a) Potential elderly supported residents multiplied by the result of: National average expenditure on residen- tial support; minus Income from residential charges: (b) The result of (a) is then multiplied by Area cost adjustment for general PSS; (c) The result of (b) is then scaled to the control total given in Annex B for Residen- tial Care within the Social Services for the Elderly sub-block.

(d) Potential elderly domiciliary clients multiplied by £1,334.33.

At this point, before proceeding to (e), (f) and (g), you might like to turn forward a few pages to discover how the figure for 'potential elderly domiciliary clients' is calculated. It is:

The resident population aged 65 plus, multi- plied by the sum of: (i) 0.146 multiplied by the resident popula- tion aged 85 plus, and divided by the resident population aged 65 plus; and (ii) 0.117 multiplied by the proportion of persons aged 65 plus living in privately rented accommodation . . . and (iii) 0.091 multiplied by elderly living alone; and (iv) 0.055 multiplied by elderly on income support; and (v) 0.014.

Yes, that's right, 0.014 — not multiplied by anybody, living or dead. Presumably, it is the number Mr Patten first thought of.

You see the problem. Each one of these mysterious clauses may reflect a huge amount of patient and intelligent research. The more detail these formulae encom- pass, the more 'fair' they are. Unfortunate- ly, the resulting morass of details is as impenetrable to ordinary people's under- standings as any act of sheer arbitrariness could possibly be.

'Rough justice' was a phrase much in vogue in the early stages of government propaganda for the poll tax. It was ambi- guous — did 'rough' mean 'harsh', or 'approximate', or both? — but at least it emphasised that the point of the poll tax was justice as opposed to fairness. It may not be fair that a millionaire pays the same as a pauper for a loaf of bread, but it is indubitably just. In future, we were told, local government services would be thought of as any other services or com- modities are, to be paid for by a 'charge', not a tax.

But then the fairness started creeping in again. Transitional 'safety net' arrange- ments mean that some poll tax payers will be paying not only the cost of the services they receive, but also a subsidy towards the cost of their more profligate neighbours'. And since the poll tax will provide only a quarter of local government revenue, the idea of paying a real 'cost' is three-quarters fiction anyway. Most of the money local authorities spend will be derived from Mr Patten's impenetrably fair formulae; if they exceed his target by five per cent, the poll tax payers will be milked of an extra 20 per cent without having any real way of judg- ing whether the excess is justifiable or not.

So accountability, Mr Patten's second principle, goes out of the window. Indeed, the greatest psychological effect of the poll tax is going to be that people will blame all rises in their poll tax bills directly on central government. Mrs Hodge has shown the way: 'He could decide that we can't possibly ask you to pay higher poll tax bills to make up for the loss of government grants', she wrote — putting forward as an alternative the 'cuts', those famous 'cuts' for which central government is universally blamed already.

Mr Patten has dug himself so deeply into this hole that if he dug a little further he might come out on the other side. For the only solution now is to remove all powers of taxation from local government, and recognise local 'authorities' for what they really are: just the lower tier of a centrally directed and centrally funded administra- tive system. If people received an

im- penetrable booklet from Mr Patten instead of getting one from Mrs Hodge, would anyone notice the difference?