Last year, Ealing council gave resident tax-payers a £50 refund. Many were surprised. We pay tax to the council, nobody expects money back, but they insisted and the supposed aim was to encourage people to go out and spend £50 locally that they might not otherwise have done.
But it was a flawed operation because this was a cash refund. Most people just got the money refunded back to their current account. So there was no compulsion to spend the money locally. Of course a voucher scheme could have been created – like the 20p-off coupons you used to see in magazines – but that would have cost a lot to administer anyway.
I’d like to suggest an alternative idea that really works, for both residents and the council. In São Paulo, Brazil, the local residents all pay their local council tax to the local authority, but the local authority also issues all tax-payers with a card similar to a credit card. When making any purchases, no matter how large or small, they can use this ‘council card’ as a loyalty card. The council totals up how much you spent in the local district over the past year and issues a refund to you based on a percentage of what you spent.
So the card ensures that local residents can prove they are spending money in the local area and even local corner shops ask for the number.
It’s not perfect. It does mean the better off and those with more disposable income can create a bigger council discount by spending more locally, but it does at least encourage residents at all levels of wealth to spend locally, knowing their tax bill will be reduced if they support local bars, restaurants, and shops.