Thursday, 22 August 2013

Hotel Bed Tax could raise £4m for cleaner streets in Camden

A new 'Hotel Bed Tax' for hotels could raise substantial sums to fund front-line services, such as street cleaning and keeping our public realm attractive, and help maintain services against another £50m wave of government cuts the council will have to implement after 2015. 

The recently concluded cross party London Finance Commission - commissioned by the Mayor of London - argued strongly for new powers of taxation for the capital, including the freedom to levy a ‘tourist tax’ (a small levy on hotel rooms) common across Europe and the USA.
Camden argued for a levy in its submission to the Commission. The intention is that the funds raised will primarily be used locally by boroughs to compensate them for the higher costs they have to incur to cater for tourists. In general would welcome the ability to generate additional revenue streams that reflect the unique circumstances Camden finds itself in.

So how would it work?

There are a number of ways of modelling what potential income this would give Camden. Based on 50p per room per night we estimate this would give us £3.4m to £3.9m per year. This could be simply scaled up – i.e. a charge of £1 per night would double the estimates.
  • Based on the number of rooms from the last full hotel survey (2010) and average occupancy this would give £3.4m a year
  • Using Visit England room stock data by Local Authority – Camden had 26,530 tourist rooms in 2012 (including hotels and non-serviced accommodation) – and occupancy rates by region for 2012 (London annual occupancy rate is 80%). This would give annual revenue of £3.9m.
  • Basing a calculation on the number of visitors to the borough and the average nightly stay gives a figures of £3.7m.
These are very rough calculations and could vary significantly with level of tourism activity. We haven’t factored in cost of collection or the impact of differential charging would have on where tourists stayed in London.

Introducing such a tax will be hard, where it has been floated before there has been a vociferous response from the hotel industry - but we should take no lessons from some of these big conglomerates, who have failed to secure local jobs for local people and should be more socially useful to the borough.  

Last year hotels in Camden only offere 6 apprenticeships to local people. 

The annual revenue boost, at a time of continuing government cuts, could be used to invest in a better public realm.  

The 2011 cuts to street cleaning removed the twice-weekly from residential streets and kept only one.  This is supplemented it with 'hotspots' targeted by council teams.

The street cleaning budget was cut from just under £10m to £6m.

However, we preserved the cleaning capacity for Camden Town and south of the Euston Road because of high tourist and business numbers putting pressure on the street environment.

In these areas daytime population is roughly double our resident numbers.  We know that good levels of cleaning impact on both business location decisions and assume that this applies also to visitor numbers, but it seems unfair that this is paid for by residents elsewhere in the borough.

We can't currently levy these charges - we are dependent on national government to give London and the boroughs the power to do this - but it is good to see the development of some cross party consensus on this from the Mayor to Labour's Sadiq Khan: lobbying for a new tourism tax should be priority.

But residents hoping for retained street cleaning shouldn;t hold their breath,  immediately after our announcement, the proposal was slammed by Conservative Minister Eric Pickles and his friends in the hotel industry lobby - attacking Camden for having the temerity of suggesting a local policy.

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