Dear Mr Benyon,
There is one aspect in particular of the current funding debacle that confuses me. I wonder if you can help explain this.
As I understand it, in or by 2019-20 it is planned that local councils will become wholly or almost wholly self-funding due mainly to their being able to retain all their business rates. Although, according to the LGA, about four out of ten councils nationwide have doubts that this will happen within this period, it seems a commendably radical approach to tackling a particularly troublesome aspect of public finances which has been festering unaddressed for decades.
However, despite this promise of self-sufficient accountability, the current changes to the Revenue Support Grant mean that for the next three years local councils will need to slash services which they don’t want to lose and, hopefully, will reinstate once they have control of their own finances. The cost of closing and then re-opening them will be considerable, to say nothing of the hardship caused in the meantime. This has, you will I’m sure have noticed, also stirred a savage and divisive sense of injustice, much of it directed towards the (Conservative) council and the (Conservative) government to an extent unmatched since the 1980s. In these circumstances councillors and council staff cannot possibly be able to concentrate on the jobs of providing and administering services that they are paid to do. Your own time has doubtless been compromised in the same way. Individuals already busy enough with their own lives are dashing around trying to co-ordinate attempts to salvage something from this mess. The clock ticks down and everyone is on edge, tempers are running high, motives are being suspected, blame apportioned, old arguments and complaints rekindled. Is this the once-vaunted Big Society in action?
It’s very hard to understand what useful purpose is served by all this. More logical and equitable would be to find a way of phasing out the old system and phasing in the new over the lifetime of this parliament. The current arrangement seems to verge on the vindictive. It’s as if I were to say to my son that in three years’ time I was going to give him the house in which he was living, then burn part of it down and leave him with the resulting problems and costs. Would he trust me, support me or think charitably of my motives after such an irrational act? I doubt it.
If I have got this wrong, please let me know.
Assuming you agree that the current situation is at best bizarre, what else can be done to mitigate it? I do not know, but will be writing to WBC to enquire, what steps they could yet take to secure any funding in advance of, and perhaps against the security of, future income. The huge problem, whether with securing additional funding or with finding other ways of running the services during this pointless funding black-hole, is that there is so little time. Any solutions will thus risk being ill-considered and so perhaps fail, causing even more hardship and ill-will. Whether WBC could or should have predicted and planned for this draconian settlement is another issue. The government could certainly have made its own intentions clearer sooner than it did. Why did it not do so?
Mr Benyon’s reply:
Thank you for your e-mail.
I am broadly in agreement with many of the points you make. I believe that the dramatic cut in the rate support grant in advance of the transfer of powers for Councils like West Berkshire to retain more of the Business Rates, is wrong. It is for that reason that I felt unable to support the Government in a recent parliamentary vote on LA finance.
In your last paragraph, you ask whether the Council should have predicted a 44% cut in their rate support grant. They were advised by the Department for Communities and Local Government to budget for at least a 25% cut. Since the announcement just before Christmas, I have been working extremely hard to try and get Ministers to understand the impact of their funding plans on a small Unitary Authority that has done the Government’s bidding in recent years and brought down the level of reserves. To cut a long story short, this did result in the allocation of £1.4m worth of transitional funding for this year and next. This still requires the Council to make some extremely unpalatable decisions.
Throughout, I have been impressed by the Councillors’ desire to minimise the impact on the most vulnerable. However, unless there are dramatic changes in the next few weeks, I do not believe the Council will be able to present a budget that will not have a dramatic effect on a great many people across West Berkshire.
I am continuing to work hard on Ministers in a number of directions. One example of this is the bizarre system whereby the Valuations Office Agency can reallocate Business Rates from one Authority to another for large sites. For example, when Vodafone bought Cable and Wireless, the VOA decided that all of their Business Rates should be applied to the Cable and Wireless office in Bracknell. This was considerably to Bracknell Council’s advantage and pulled the rug from under a large slice of local funding for WBC. It is this kind of anomaly that I am seeking to iron out.
I have felt able to support the Government’s funding reductions for Local Authorities in recent years because WBC were able to maintain a high level of service provision whilst maintaining Council Tax rises to at, or below, inflation. I have stated to Ministers that I believe it is totally wrong for them to claim that this is a good settlement for LAs when, in an area like West Berkshire, Councillors are having to do a very un-Conservative thing: to raise taxes whilst reducing provision for some of the most vulnerable in our society.
I will continue to make these points and would do so whichever Party was in office. I am sure West Berkshire will get through this hiatus in its funding but it will require a lot of work if we are to achieve this in the next few weeks.
Member of Parliament for Newbury
t: 01635 551070 or 020 7219 8319
f: search ‘Richard Benyon’ on Facebook
a: House of Commons, Westminster, London, SW1A 0AA
Dear Mr Benyon