Tuesday, 13 January 2015

FTC - setting next year's budget

We had a swift and consensual meeting of FTC last night.  It was our annual budget setting council.  At the risk of stating the obvious the size of the budget has a direct relationship to the council tax rate that is set.   Now yesterday's meeting didn't set the council tax - we will do that later this month - but as a council we did make our position crystal clear.

At my behest the council unanimously resolved not to increase the council tax and therefore set its budget so that the current rate of £38.47 per Band D property in a year should not be exceeded.

Inevitably the devil in these things is in the detail - and unfortunately we don't have all the details that we would like at the moment.  As council tax is charged on households knowing the number of chargeable houses in Frodsham is important.  Every year some additional houses are built and some older ones are knocked down.  Typically Frodsham grows a little bit each year.  Also in April this year Frodsham's boundaries will move bringing in additional houses in Kinglesy Green and on Mill Lane (between the Weaver and the Weaver Navigation).  Now FTC is waiting to hear from CWaC how many chargeable houses we have now and how many more we will have when the boundaries change in April.  Obviously as a percentage of the total number of houses in Frodsham any changes will be small - but it does mean we can't be exact over the figures at this stage - other than saying we have all accepted that we do not want the council tax to be charged to increase at all.  What the figures prove to be to the last penny are, however not yet known!

Incidentally as FTC's council tax is lower than Kingsley - those residents living in Kingsley Green will see a modest fall in their council tax when they join us.

Both FTC's and CWaC's record over the Council Tax is impressive.  Since 2009 the council tax paid by Frodsham residents to CWaC and FTC has fallen by more than 12% in real terms.

Since 2011 we have been able to increase the revenues coming into FTC significantly without affecting any Frodsham resident's pocket - and in fact if you are an 'over 70' your council tax has fallen when you take account of the now £6 Christmas Voucher.  We've been able to do this through:

  • grants from CWaC - such as the automatic receipt by FTC of 25% of the New Homes Bonus money; and
  • using CWaC's special expenses regime (which are £0 in Frodsham) to effectively swap £8.32's worth of Council Tax from CWaC to FTC without increasing what people pay.
The opportunity to increase FTC's revenues yet further will come through the Neighbourhood Planning Process.  Assuming CWaC adopts the Community Infrastructure Levy (CIL) arrangements - which is likely - FTC will receive 15% of any CIL payments automatically.  If we have a neighbourhood plan the percentage receipt automatically received by FTC will rise to 25%.

CIL payments are levied on developers of new houses or of food retail premises.  It is an alternative to s106 Town & Country Planning Act 1991 payments and help local communities provide for rising demand for services arising because of increased demands caused by additional residents.

One of the other debates we had yesterday was in relation to whether Parish Council council tax changes should be subject to the capping regime that applies to the council tax levied by the principal council (ie CWaC), the police and crime commissioner and the fire authority.   If one of these authorities wants to increase the council tax by 2% or more then that can only happen if the increase is supported in a local referendum.  The Government is consulting on whether to introduce these capping to parish councils.  In recent years, on average, parish council council tax has risen by 14%.

As I've shown we have an excellent track record locally and we've kept our council tax pretty much static both at FTC and CWaC and delivered more than a 12% real terms reduction once inflation has been taken into account.  However I'm not in favour of an automatic cap for parish councils.  You see the numbers involved are so small.

If FTC was subject to say a 2% cap which currently applies to CWaC, the police and crime commissioner and the fire authority then FTC could only increase its council tax up to £39.23 in other words only 76p more from its current rate of £38.47 on a Band D property.   That theoretical 76p more would only raise around £3,000 for FTC.   Also if we have a situation where FTC takes over a service from CWaC - and this could result in council tax being swapped from CWaC to FTC then I wouldn't want any capping rules to prevent that change from happening.

My own position on the council tax is very clear.  Instinctively I don't want to increase the charge on anyone.  We heard yesterday at the council meeting from a young apprentice arguing that any council tax rise would hit the lower paid and those on fixed incomes the worst.  I agreed with him - hence arguing for no increase at all.

I want all councils constantly to innovate and improve service delivery whilst driving out costs.  Sometimes however there can be a step change in what is being delivered - and then asking for a higher council tax in exchange for new or additional services could be justified - BUT ONLY WITH THE SUPPORT of local residents.

The biggest threat to the council tax position in Frodsham comes from Labour.  Labour finance spokesman on CWaC Cllr Ben Powell has already said he wants to do away with the special expenses regime.  This is the regime that seeks to give fairness to communities like Frodsham that do more with the council tax paid to their parish council than others.  We pay for our PCSO, our Christmas Lights etc through FTC's council tax (unlike other areas such as Northwich who get all or some of those services from CWaC).  Those areas who get those things paid for by CWaC as opposed to their parish council have to pay for them by way of special expenses.

The message is very clear and very stark - and in fact has long been evident from practice over many years.  Labour councils increase your council tax.  If, God-forbid, Cllr Powell gets his way we'll all have a council tax rise in Frodsham to subsidise areas without parish councils, or those where the parish councils are doing less than we do in Frodsham.  I am vigorously opposed to Labour's plan to increase our council tax in Frodsham.

Blog update 21 January 2015
Cllr Powell has been in contact with me by Twitter about this blog entry - he disagrees with my comment in the previous paragraph.

This has given me the opportunity to remind him of what he said at CWaC's budget meeting on 16 October 2014.  In his somewhat interminable 13:39 minute long and laboured speech responding to the budget he referenced special expenses twice in critical terms.  He referred to them as being a 'fiasco' and left no-one in any doubt that he disagreed with them and would do away with them if he had the opportunity.

Later on in that budget debate I spoke.  The first point I made was to reference a letter written by Labour MP and Shadow for Communities and Local Government Rt Hon Hillary Benn dated 25 August 2014.  In that letter Mr Benn advises councils that Labour will, if elected, reallocate government grant monies in the 2015-16 year to 'the more deprived local authorities.'  In other words this will mean taking money from the 'less deprived local authorities.'   We know this will effectively mean that Labour, if elected, will divert monies into councils serving urban populations - they see them as 'more deprived' and Hilary Benn's letter makes this point.  This inevitably would pressure those councils losing expected government grant to have to consider raising the council tax to compensate for lost government grant.

The next point I made was to reference Cllr Powell's own speech.  I said to him in the debate: 'if you are going to do away with special expenses you are attacking my community.  My community is one of the few communities that actually funds more of itself than any other.  Thank you for pointing out that you are going to make our situation worse.'  I also pointed out to Cllr Powell that he had given me the opportunity to campaign on this issue.  Frodsham is one of only a handful of communities where £0 special expenses are charged.

No one challenged or questioned my comments or assertions in the council debate or subsequently.

Perhaps in the 3 months that has gone by Cllr Powell has realised that the Special Expenses regime is there for a reason.  However he remains opposed to it.

So let me remind him.  Special Expenses seeks to remedy an unfairness where some communities receive services paid for by the Borough Council, which in other places are provided by the Town or Parish Council.  CWaC identifies play areas, Christmas lights and PCSOs as things that are paid for by CWaC in some areas and by some or all of the Town or Parish councils elsewhere.

As it is communities in CWaC with Town and Parish councils typically pay a little more in council tax than those that don't have them.  For a small increase in cost we get more choice, more service more local influence and more local democracy.  It is this small amount of council tax that has, for example brought us many of our defibrillators, that has given us our wonderful local winter gritting scheme, that pays for our PCSO, our Christmas lights etc and other things besides.

I am also delighted that the differential between what a Frodsham council tax payer pays when compared to a council tax payer in a non-parished area such as Chester has reduced over the years because of special expenses.

So in this financial year a Band D charge varies something like this:

Frodsham                      £1,528.34 (includes £0 special expenses)
Chester                          £1,507.26 (includes c£16.13 special expenses)

In Frodsham we pay c£21 more in council tax in a year when compared with Chester because we pay a small amount to FTC (£38.47).  Without special expenses we would be paying for e.g. Chester's PCSOs, Christmas lights etc through CWaC Council tax and our own PCSO through FTC council tax.  That would be unfair and that is what the special expenses regime tackles.  Don't forget this is what Cllr Powell wants to do away with.