Councillor Howard put the following question to the Portfolio Holder for Finance and Asset Management (Councillor Halliday):
“Please can the Portfolio Holder for Finance confirm the following:
That for 2013/14, £202,000 pounds was granted by the Government to offset the impact to Town and Parish Councils of the introduction of the LCTSS scheme;
That the full £202,000 was passported to the Town and Parish Councils in 2013/14;
That the Government has stated that within the Council's overall funding position, the element for the LCTSS for 2014/15 remains the same;
That the Administration could passport the full amount of the 2014/15 LCTSS funding element to the Town and Parish Councils in the coming year;
and finally,
That this Administration is instead looking to passport over only 85% of that money and to withhold the other 15% of that government funding from the Town and Parish Councils of Tendring?”
Councillor Halliday thanked Councillor Howard for his question and said that the Council had received a grant of £1.644million within the overall funding settlement for 2013/2014 in respect of the Local Council Tax Support Scheme (LCTSS), which included an element for town and parish councils. He said that the Council had passported £202,000 to town and parish councils based on the principle of ensuring that no town or parish council was worse off due to the impact of the LCTSS and that not all Councils had chosen to do this.
Councillor Halliday said that the Government had suggested that, within the overall financial settlement for 2014/2015, the element of support for town and parish councils was not changing and therefore the Council could maintain the level of LCTSS support for town and parish councils at £202,000. However, he said, the Cabinet, supported by the Corporate Management Committee, was proposing to reduce by 15% the level of LCTSS support for town and parish councils in 2014/2015. This was based on the need to balance a difficult funding position whilst being mindful of council taxpayers subsidising the finances of town and parish councils if no change was made. Councillor Halliday put the level of LCTSS support grant in context by stating that the amount each town and parish council received as a percentage of their total funding ranged from 2% to 18% and that the proposed reduction in 2014/2015 would range from just 0.5% to 2.7% of their total funding.
Councillor Halliday went on to say that he had responded to a recent Government consultation to inform them that their claim to be protecting the element of support for town and parish councils within a grant formula settlement that was not, in fact, ring-fenced was unhelpful and lacked credibility. He also pointed out that the Council Tax Base calculations that would shortly be undertaken to underpin the Council’s detailed budget estimates for 2014/2015 were anticipated to provide a financial benefit to town and parish councils that would likely offset to some extent the proposed reduction in the passported grant.
Councillor Howard then asked the following supplementary question:
“Thank you for essentially confirming that the Administration could pass it on and that it is choosing not to. You mentioned about the calculations not having been done which is true at this point that we don’t know what the tax base is. But I am sure that the net result is that there is a cut to the town and parish councils. The calculations show that it might in fact be offset but I’ve not seen any evidence to substantially suggest any offset. So, in essence, it looks like the Administration is taking £30,000 back from town and parish councils and coincidentally it is very similar to the 0.5% reduction in Council Tax that the Administration tends to give each year. So, in essence, what the Administration seems to be doing is taking £30,000 from town and parish councils and giving it across the District so the Administration can have a headline tax cut each year. Do you think it is fair that the town and parish councils’ residents should be subsidising the Administration’s tax cut if and when it makes it next year? It kind of appears on the face of it that the clue to what the Administration is doing is in the names of its leadership - it is robbing Peter to pay Paul!”
In response Councillor Halliday said that what he thought was unfair was that a large percentage of the town and parish councils set their precepts before they were in possession of all the facts and figures, including how much they would be receiving in terms of the Council Tax Base, which was set by the Council in December each year. In his view, to set a parish precept early and include an increase in that precept without such knowledge was unfair. Councillor Halliday said that it would be fairer if town and parish councils waited for all the information at which point they could well find that, based on the information that he currently had to hand, the difference in this year’s Council Tax Base could offset up to £25,000 so that across all of the town and parish councils the shortfall from the £30,000 reduction could be reduced to only £5,000.
He went on to say that it was unfair that town and parish councils set their precepts early and then blamed the District Council for any increase when in fact they should be waiting for all of the information which would then enable them to set a fair and balanced precept. He also said that it was unfair that the Government claimed that the LCTSS support grant for town and parish councils was ring-fenced within the formula grant. This was untrue - there was no such ring-fencing in place and as part of the formula grant the LCTSS support grant was subject to the decisions of individual Councils and the same cuts as everything else.
Councillor Halliday accepted that the Administration could continue to passport the entire amount of £202,000 to the town and parish councils and also to make no changes to the overall LCTSS. However, this would cost the Council £60,000 which would result in £60,000 of cuts having to be made elsewhere within the Council
Councillor Halliday reiterated that when you looked at the value in percentage terms of the overall grant funding the passported money being talked about was only 0.4% for one parish council in terms of overall funding and only increased to 2.7% at the top end. Therefore, the issue was about a miniscule amount of money which town and parish councils should be able to cope with in setting their budgets. He concluded by saying that the Administration’s approach was fair and that it had the support of the Corporate Management Committee.