Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by Surrey County Council (LGB 28)


  1.  Surrey County Council welcomes this opportunity to submit its views to the Committee. This submission addresses each of the key elements of the draft bill on which the County Council would like to submit its views for consideration.


  2.  The Council supports many of the proposed relaxations in the regulatory regime. However we regret that the Secretary of State proposes to create considerable reserve powers to intervene in unspecified circumstances that could have the effect of nullifying many of the measures. We are also concerned that many of the measures could lead to residents and businesses in some areas not only paying more for their own services but also paying more towards the services for others.


  3.  The Council welcomes the proposals which should enable authorities to make capital investment decisions based on commercial assessment rather than searching for solutions which can be made to fit within the current regulatory framework. However, the reserve powers of intervention, which may be invoked for national rather than local reasons reduce certainty and could lead to a loss of confidence by both local authorities and the private sector when considering long-term investment decisions. The Council is also very concerned, as are its District Councils, about the proposals to pool housing receipts which amongst other things, could undermine the Councils' ability to support affordable housing.


  4.  The Council does not see the need for the proposals. Authorities are already scrutinised through an external audit regime that examines the quality of financial administration and passes judgement on, for example, the level of reserves and the quality of budget monitoring. In particular, the proposal for the Secretary of State to specify a minimum level of reserves to be held by an authority is interference in a decision best made by local members with the advice of the responsible financial officer taking into account local circumstances.


  5.  The Council opposes the proposal to merge Revenue Support Grant (RSG) and National Non-Domestic Rate (NNDR) into a single Formula Grant. This proposal further erodes the identity of NNDR as a local tax and is somewhat at odds with the proposals on Business Improvement Districts. It will also reduce funding in some shire districts as they will effectively receive negative RSG which will be deducted from their business rates.


  6.  The Council welcomes the principle of Business Improvement Districts (BIDs) but would have preferred to see greater powers to levy local supplements to business rates in order to support the local business community. In reality, the Council believes there will be very limited take up of this proposal due to the difficulty in gaining the necessary consensus amongst businesses.


  7.  The Council supports the proposals for rate relief for small businesses.


  8.  The Council welcomes most of the proposed changes to Council Tax but has reservations about the proposal to allow the Secretary of State to vary the number and ratio of Council Tax bands. Revaluations are likely to have significant re-distributional effects and an increase in the number of bands, particularly the insertion of a band below the current band A, will exacerbate those effects. An increase in the local tax base and local revenue to support local services following local consultation would be welcome. However the fear is that this would offset nationally by the re-allocation of grant elsewhere, meaning people would pay more for their own services, and contribute even more to services in other areas. Transitional damping arrangements, whilst welcome, do not provide long-term relief.

  9.  The proposal to remove powers to apply the Council Tax benefit subsidy limitation scheme is particularly welcome.


  10.  The Council supports any opportunities to charge for discretionary services and additional powers to trade although the opportunities to take advantage seem limited.


  11.  The Council feels that the freedoms so far proposed are quite restricted. Moreover, the Council is not convinced that the current performance assessment criteria are sufficiently robust to be used potentially as a measure to exclude authorities from even those limited freedoms. An external auditor's opinion on an authority's capability to handle the freedoms would be more appropriate, recognising that additional freedoms may have to be restricted in the case of authorities that cannot demonstrate sound stewardship of their affairs.


  12.  The Council, operating as it does in a two-tier area, has a long history of co-opting other councillors and giving them voting rights on its committees—on its Area Transportation Sub-Committees, its district Partnership Committees, and now its Local Committees, and is likely to consider this for its NHS Select Committee. Representatives of other organisations have been invited to attend and speak, but not vote (the statutory exception being the education representatives on the Children and Young People Select Committee. The Council would prefer to retain this distinction between the involvement of those democratically elected, and those appointed or nominated, and sees no need for the Secretary of State to become involved in the local schemes as is envisaged in the Bill.


  13.  The Council supports the proposal to give local authorities power to hold advisory polls, and provide express freedom in the way such polls are conducted.

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