Memorandum by Wigan Council (LGB 12)
SUMMARY
What we support
— Greater Freedom for capital spending
but a recognition that deprived areas face greater need and also
have less ability to increase receipts.
— We would support the merging of NNDR
and RSG.
— Business improvement districts are
supported with the qualification that the ability to raise income
is again differential.
— A fairer settlement for authorities
such as ourselves and the recognition that we face a legacy of
problems due to years of underfunding.
— A Full Council tax revaluation without
delay and a rolling programme for further revaluations.
SPECIFIC ISSUES
Capital Expenditure
The freedoms included in part one of the bill
for authorities to raise finance for capital expenditure fail
to fully recognise the differential ability of authorities to
do so. In order for this new freedom to operate effectively in
tackling the governments wider agenda of equalising opportunity
there needs to be some recognition of this fact. This could be
achieved by introducing a needs element into the capital financing
system which directs capital resources where they are most needed.
Failure to do so will increase rather than reduce the disparities
existing between areas.
Merging RSG/NNDR
We would support the merging of these two streams
as an aid to simplifying the funding mechanisms. It should be
possible to maintain a visible NNDR stream using a proportion
of this grant.
Business Improvement Districts
We would support the principle of establishing
business improvement districts but would maintain that there are
difficulties in that certain areas will have less ability to use
this income source. Wealthier areas will have the ability to improve
local facilities and prosperity and there needs to be a commensurate
balance in the system to counter such forces.
Funding
In general the bill offers greater freedom for
authorities which we welcome. Such freedoms are not provided equally
and different authorities face differing degrees of constraint
in applying such freedoms. Any new grant funding mechanism needs
to recognise these shifts and direct resources to those areas
who face the greatest challenges, areas of low income and limited
taxbase in particular.
Council Tax Revaluation
This council has strongly supported the regular
revaluation of properties to ensure that the council tax mechanism
and the consequent grant mechanism truly reflect economic and
social conditions. Regular revaluations must not be delayed because
of the potential turbulence that may occur or because of the difficulty
of the exercise and if possible mechanisms need to be put in place,
which ease the change between revaluation exercises.
WIGAN COUNCIL
BACKGROUND
With a population of 311,967, Wigan is the eleventh
largest metropolitan district in England. Historically an area
based upon coal (employing at one time over 30,000 miners), textiles
and heavy industry the areas employment structure has changed
dramatically in the past quarter century Nevertheless the legacy
of the areas industrial past remains with the borough being made
up of dispersed townships based upon mining settlements, high
rates of long-term limiting illness in the older age groups (17
per cent above average) and a higher proportion of the population
in lower socio-economic groups (10 per cent above average). This
is reflected in the fact that despite an improving employment
situation Wigan is highly ranked in the DTLRs current index of
multiple deprivation for local authorities.
RESOURCES AND
SERVICE PROVISION
Standard Spending Assessments
| Standard spending assessments 2001-02
| Secondary education SSA per pupil |
Total SSA per resident (excluding Police and Fire)
|
| Wigan | 3,040 | 842
|
| Manchester | 3,815 | 1,120
|
| England | 3,313 | 879
|
The difference in SSA per head between Wigan and England
is worth around £11.5 million. whilst the difference between
Wigan and Manchester is around £86.7 million per year.
Wigan has long argued that its authority has been unfairly
treated in terms of the basic support it has received from government
and in terms of specific measures this authority has supported
changes that would improve its SSA such as
Area Cost Adjustment an extra £4.8 million a year
Reform of Additional Educational needs an extra £6.5 million
a year
(1999-2000 SSA sub group options)
Even if changes of such magnitude were introduced there is
a legacy of underfunding over many years which has limited the
authorities ability to implement change;
Extra resources that Wigan would have had if receiving the
same SSA as neighbours since SSAs introduced in 1990/91
Bolton an extra £237 million SSA
Manchester an extra £1,119 million SSA
COUNCIL PERFORMANCE
The priority of the council is securing good services, in
this respect the following show evidence of this commitment:
— Performance management systems.
At the same time there has been a range of imaginative and
innovative schemes in the borough:
— Capital: Robin Park, town centres, private sector
housing partnership, derelict land programme, Martland Park, BURA
award for sustainability.
— Revenue: BFI, Ofsted, BV (3* and 2*), SSI, Kingsdown
High project.
— Virtually all indicators demonstrate high performance
and low cost.
— Mixed economy of provision in many services.
— Community leadership and Partnerships: well developed,
operationalising, for example using health flexibilities.
— Works at local level too; most secondary schools
have specialist status.
— Helped other authorities eg Liverpool.
A Council which is effective and valued by its stakeholders
CONSTRAINTS
As well as the low resourcing of the authority the economic
environment that the authority operates within place further limitations
on the ability to achieve its objectives.
— Property values are low; residential £100k
per acre, improved terrace house £35k, only things that have
real value to cross subsidise activities are commercial leisure
and retail; planning policies increasingly making this impossible
Average House prices
June 2000 to June 2001 (source: Land Registry)
| £ |
| Wigan | 56,873 |
| North-West | 71,526 |
| England | 112,735 |
— Specific grants slanted to city centres; this
includes NRF.
— Little interest in most of our services from the
private sector as there are not large efficiency gains to be taken
for up-front investment.
— Even PSA rewards for achieving stretch targets
are linked to current expenditure.
A sense that areas like ours don't count and can be left to struggle
on because we are not an embarrassment.
THE EFFECT
UPON THE
AUTHORITY
What has been done to keep our head above water
— Made £30 million of efficiency gains since
1990.
— Sold most of our assets; £80 million since
1990.
— Council tax rises well above inflation.
| Council tax increases | Per cent
|
| 1997/1998 | 6.9 |
| 1998/1999 | 3.5 |
| 1999/2000 | 7.9 |
| 2000/2001 | 6.3 |
| 2001/2002 | 8.3 |
— Used any specific grants to maximum advantage
— Planning gain from developments to provide new
facilities
— Unable to invest in community assets
A painful process managed to minimise the impact upon the area
DIMINISHING RETURNS
— Diminishing returns on efficiency gains.
— Few assets left to sell.
— Must invest more in ICT and fixed assets.
— Five years since a change in Government and the
authority is looking at big cuts and Council tax rises.
— Insufficient money now to provide match funding
for specific grants.
— Planning regimes now preventing imaginative gains.
| 
