Many residents when moving to a managed or serviced neighbourhood sometimes get confused or unclear about the purpose of paying service charge on top of council tax.
Put simply, council tax is a form of local taxation in the UK, serving as essential source of revenue for local authorities to fund public services and infrastructure.
The amount of council tax an individual or household pays is determined by the valuation band assigned to their property. These bands are based on the property’s market value and are organised into bands from A to H, with A being the lowest and H the highest.
As for service charges, at Barking Riverside, there are two types: estate service charge and block management service charge.
These charges are fees imposed by landlords or property management companies on residents of properties with communal areas or shared services. These charges are separate from council tax and cover the costs of maintaining and managing shared facilities like open areas, parks, gardens, water bodies (estate service charge charge) as well as lifts, communal gardens and other communal spaces, concierge services or gyms (block management service charge).
If you live in a house, you are expected to pay both council tax, and if you live in a block of flats, the block management charge also applies.
While they are mandatory contributions from residents, they have distinct purposes, differences, advantages, and disadvantages.
The primary purpose of council tax is to finance local services such as education, rubbish collection, street cleaning, and social care – this is applied for the whole borough, not just your street or the area you live. For instance, if you visit another part of Barking and Dagenham, you can make use of library facilities in Chadwell Heath or expect the streets of Dagenham Heathway to be clean.
These can be seen as clear advantages to paying for council tax, however, the council tax system has been criticised for being regressive, as it does not take into account variations in income. This means that individuals with lower incomes may face a proportionally higher tax burden, especially during the current financial environment of relative high inflation and interest rates, which accentuate a cost-of-living crisis.
If you are struggling to pay your council tax bill, you may be able to claim support online (https://www.lbbd.gov.uk/benefits-and-support/council-tax-support/council-tax-support-scheme).
As for service charges, property managers can tailor these to the specific needs and amenities of a particular development, ensuring that residents only pay for the services they use.
However, these too, many residents will feel, can be an even higher financial burden at the end of the month or quarter of the year.
One of the main issues with service charges (either estate or block) for most residents is the lack of transparency by their estate or block management companies, which often trigger payment disputes. Residents also have limited control over the management of shared facilities and associated costs, as these decisions are often made by property management companies or landlords. Not to mention the fee increases, which seem to currently be completely unregulated, leading to further financial strain for residents.
In addition to its multiple block managers (Pinnacle Places, Encore, RMG, Prime, Canonbury) Barking Riverside is currently served by Tandem Property Management as estate managing agent.
However, the developer, Barking Riverside Limited (BRL), is undergoing a tender process for a new estate management contract which started in December 2023, followed by a resident consultation period which ended on 19 January 2024.
According to BRL, Tandem are not part of the next stage. This is because Tandem has decided to withdraw from the tender process. Tandem has, however, reiterated a strong commitment to Barking Riverside and will continue to be BRL’s valued estate management partner until the contract terminates in July 2024.
For more information, please contact Sarah Phillips, head of estates at BRL, on info@barkingriverside.london.
By Venilia Amorim
Local resident and REB member
