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Department for Transport, Local Government and the Regions

Comments from the Association of Chartered Certified Accountants

November 2001

Executive Summary

The Association of Chartered Certified Accountants (ACCA) is pleased to have this opportunity to comment on Improving Communications with Council Taxpayers. These comments have been prepared in consultation with members of ACCA's Public Sector Technical Issues Committee, a group of experienced accountants working in the public sector.

We welcome this opportunity for local authorities, especially billing authorities, to work with government to improve the quality of information which is provided to council taxpayers. We are concerned, however, that the Government appears to view its role as imposing improvements on local government. We believe that, in order to be effective, such initiatives need to be co-operative ventures between local authorities, with central government playing a facilitating role in developing and disseminating best practice.

The consultation paper recognises that communications with council taxpayers require significant improvement. This is highlighted by the comments in the consultation document that only 15% of electors say that they read their council tax bills and that those who do are critical of the content. Given this situation, local authorities should be encouraged to innovate and consider different approaches. The introduction of electronic billing, in particular, provides an opportunity to experiment with new ways of presenting information which could be manipulated individually by the electorate to suite their own particular requirements.

Innovation, however, will not be encouraged by prescription. The Government should allow and encourage local authorities to develop their own approaches within a framework which includes a minimum of prescribed elements. A period of innovation should then be followed by a formal process of review and evaluation by local authorities, professional associations and others. This review should lead to the development of a code of best practice. Such a code should aim to disseminate those approaches which have been found in practice to be successful. We believe that regularisation of the communication process by recommended code rather than Statutory Instrument will encourage continuing innovation and refinement.

Responses to specific issues

Making council tax bills clearer for taxpayers

1. We believe that, for each authority, the previous year's actual figures rather than just the percentage increase should be provided. This should enable council taxpayers to understand more clearly the extent to which each authority is responsible for any increase in the total bill.

2. We consider that, at least for an initial period, authorities should be allowed to provide, for each component of the bill, either the annual percentage increase or the comparative figures for the previous year. Billing authorities should be permitted to decide for themselves the approach which should be adopted locally and which will best improve local financial accountability to taxpayers.

3. An open and public assessment should be undertaken of the various approaches which local authorities have adopted. The results of this assessment should then be reflected in a code of best practice developed and promulgated by the relevant professional association, for example, the Institute of Revenues Rating and Valuation. This code should then be subject to regular revision.

Levying bodies

4. We consider that the present system of providing information on the total amount of levy (paid by the local authority to local service providers, for example, passenger transport authorities) for the current and previous years should be continued. Local authorities should be encouraged to innovate and determine for themselves the nature of any additional information and its mode of presentation.

5. The proposed code of best practice for council tax bills should include guidance on accounting to taxpayers on levies and other payments made to local service providers.

Greater choice on information to be included on and sent with council tax bills

6. We welcome the Government's proposal to provide local authorities with greater freedom on the format which they may adopt for the provision of information with council tax bills. This increased flexibility should enable more meaningful communication between local authorities and their council taxpayers.

7. We consider that more effort should be made to ensure that research projects, such as that commissioned recently by the Department for Transport, Local Government and the Regions, are undertaken in co-operation with local authorities and relevant professional associations. The results of such research should be publicly available and should be supplied to the organisations participating in the research.

8. We also welcome the proposed pilot exercise which will contribute to the development of policy in this area. We hope that it will be undertaken in co-operation with local authorities and their professional associations. This should help to ensure that the results are used to inform practice by local authorities or the suggested code of best practice and any minimal regulation which is considered necessary.

9. We consider that the core information which authorities are obliged to provide should be kept to a minimum. Local authorities should be allowed to experiment so that the information integrates effectively with their own corporate communication initiatives.

10. Most decisions on the content and presentation of billing information should be delegated to local authorities. Any potential difficulties arising as a result of such an approach should be contrasted with the apparent failure of the current prescriptive approach.

11. Billing authorities should be allowed to reach agreement with the local authorities and other bodies for which they collect council tax on the content and presentation of the bills which they issue.

Supporting electronic billing

12. We welcome the Government's intention to facilitate the further introduction of electronic billing (e-billing) for those taxpayers who have requested such a service. We agree that e-billing should be an option for taxpayers in addition to paper billing.

13. We consider that more authorities should be encouraged to pilot approaches to e-billing. These pilot studies should then be carefully reviewed, in conjunction with local authorities and their professional associations, to ensure that any practical problems can be identified and dealt with. The best practice which is development from these pilot studies should be included in the code of best practice recommended above. The code should aim to encourage the wider adoption of successful approaches to e-billing and to allow further experimentation, innovation and refinement. This should result in its regular revision.

14. The aim should be to provide an efficient billing service which is utilised by the maximum number of taxpayers. Should they so desire, taxpayers should be able to obtain additional information about the authorities and bodies which they are funding, and as part of the process to share their views and concerns.

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