Examination of Witnesses (Questions 181-199)|
11 MAY 2004
Q181 Chairman: Can I welcome you to the
Committee this morning to the session on Local Government Revenue
that the Committee is holding and ask you to identify yourselves
for the record?
Ms Bakewell: Cathy Bakewell, Leader
Somerset County Council.
Mr Bilsland: Chris Bilsland, County
Treasurer, Somerset County Council.
Mr Lacey: Peter Lacey, Chief Executive
of the Somerset Association of Local Councils, the Parish Councils
Association in Somerset.
Chairman: Does anyone want to say anything
by way of introduction, or are you happy for us to go straight
to questions? Then it is straight to questions. Christine Russell.
Q182 Christine Russell: Good morning.
I would like to start by asking you about the survey which I believe
the county council carried out. Was that survey carried out solely
by the county council or did you carry it out with support from
the district and the parish council? Also, in the survey of your
budget options I believe the result was that the majority of people
in Somerset supported one of the extremes, either the high council
tax, improvements services, or low council tax, cuts in services.
Would you like to comment on how you carried it out and what conclusions
you drew from the results of the survey?
Ms Bakewell: It was a survey that
we carried out ourselves. We used Somerset Influence, which is
a body of 5,000 people recruited from the general public which
the district councils buy into; so we all use the same people
but they do rotate on an annual basis.
Q183 Christine Russell: It is like a
giant focus group?
Ms Bakewell: It is like a giant
focus group, yes. Mainly they are contacted by television or by
forums, but in the case of this particular budget consultation
we also had six focus groups around the county, one in each of
the district council areas and the second one in Taunton, which
also included members of staff, but it was mainly through leaflets
which were distributed and advertised in the local newspaper;
they were in the libraries and in schools and people could ring
in to get them and they were also on the Internet so they could
get them off the website. I thought we had very good response.
We had 4,600 odd responses, which I do not think is too bad for
a county of our size. In terms of the responses that we got with
the people being polarised at the two ends, it was obvious when
we went to the focus groups that, although we knew from the statistics
which had come out of the census that we had a predominantly elderly
population with over 50% per cent of the population being over
50 and people living much longer and therefore we had a large
proportion of people on pensions and also frail elderly, that
when we came to the focus groups myself and my colleagues were
quite shocked at the absence of younger people, young married
people, and they were predominantly elderly people. Some of that
was about the time that we held the focus groups and some of that
was about the age profile of the areas. Certainly in West Somerset,
which also takes in Exmoor National Park, the majority of the
population is over 50, and we have a large retirement population,
and those people are the ones that voted for 2.5 per cent. As
you might imagine, they are on fixed incomes, some of them are
on very, very low pensions and they just could not afford to pay
Q184 Christine Russell: You may not know
the answer to this, but I know in my own county of Cheshire over
50% of the population are over 50. Is that not common with many
of our Shire counties? Is Somerset different to any other of the
Ms Bakewell: I would not know
about the profile of other counties. It is the case that a lot
of the people from the Home Counties retire to Somerset, so we
have an in-migration of pensioners.
Q185 Chairman: I am sorry; I did not
intend to cut you off. I thought you had finished. Go on; your
Ms Bakewell: I was going to say
that we have no university. Our young people go away for higher
education and they do not come back, they do not come back until
they are in their middle-age and with families. There is a skew
towards the elderly.
Q186 Sir Paul Beresford: The options
you give where you talk of cuts, you directly relate those to
cuts in services and cuts in finance together. Any big organisation
would be looking for efficiencies and, particularly with the gearing
effect, presumably an organisation with a budget as big as yours,
a 1 or 2% cut in expenditure through efficiencies should be easily
managed, I would have thought, and therefore have dramatic effect,
through gearing, on council tax.
Ms Bakewell: Gearing has a dramatic
effect, and I am sure you are all aware of that. Before we went
out to public consultation we had already gone through some very
stringent efficiency savings and had taken four million out of
the budget through that process.
Q187 Sir Paul Beresford: What is that
as a percentage?
Mr Bilsland: As a percentage of
our spending? We had already taken out about £4 million savings,
or £4 million in cash, so that is about 1, 2% in total. In
council tax terms that is more like 5, 6 or 7%, but we did not
consult on that because we knew that people would vote for efficiency
savings, so all people saw were the cuts options after we had
made the efficiency savings.
Q188 Chris Mole: What is that as a percentage
of the non-schools budget?
Mr Bilsland: Double the figures
basically; so sort of 10%.
Q189 Sir Paul Beresford: You will find
that expenditure has gone up dramatically throughout the country
for every local authority if you sum them up together. In the
last 10 years it has gone up about 72%. Do you feel that government
interference through best value, CPA, inspection, and so on and
so forth, has contributed massively to that?
Mr Bilsland: My answer would be,
"Yes". We have never seen an Ofsted report, we have
never seen an SSI report that did not encourage us to spend more
money. They are always routing for more with the backlash of consequences.
Passporting forces council tax up because, members may know, the
Government improved the schools funding position this year by
requiring local authorities to passport even bigger figures into
schools by increasing the floor, but we need to put more money
into the system to make that happen. What we found was by the
time we start our budget process most of the allowable increase
was swallowed up by having to meet the prospective target. But
it is not just education, we have similar pressures on social
services, we have similar pressures even on the library service
where we are under pressure from the department to improve and
increase our spending on library books.
Q190 Sir Paul Beresford: Would the same
apply to district authorities? If I could use Torbay as an example.
It is written up as a weak authority. They tell me that they are
a weak authority but they are now being clobbered with 24 inspections
programmes next year which is going to cost them £2.5 million
on top of the budget?
Ms Bakewell: It is the case that
when authorities are rated as weak or poor there are more inspections
for which authorities have to pay, and it is a bit of a bone of
contention that you have to find money to pay for the inspectors,
which I would say we could do without, it is right that we should
be inspected, but the level of inspection is very, very onerous.
Q191 Christine Russell: Can I ask you
a particular question that arises out of your submission. You
are aware that the Home Secretary has mooted the idea of perhaps
there being a local levy to pay for additional policing if local
people are prepared to pay a little extra to support it, but you
are dead set against any kind of local referenda to decide local
spending priorities. Do you want to elaborate on why you are against
Mr Bilsland: One of the reasons
why we are against local referenda comes back to the results from
our own consultation process. As Cathy was saying, part of it
was the focus group meetings, and one of the things we did in
those focus group meetings was we polled people before they came
in and said, "What sort of council tax increase do you think
you would be prepared to pay: 2.5% up to 11.5%?" Then we
polled them afterwards, after we had been through all the case,
all the explanations, all the consequences, and we found a very
substantial core of people would not change their position regardless.
We know there is evidence to explain that part of the reason for
that is simply that people cannot afford to pay a council tax
increase, but many people can afford to pay but they are simply
not prepared to pay any higher taxes for any public services under
Q192 Christine Russell: Is that because
they assume others are consuming the services rather than themselves?
Mr Bilsland: That would certainly
be one of the reasons, would it not, yes. We found, for example,
elderly people tended not to be very supportive of schools funding.
There again, elderly people were also not very supportive of the
care of the elderly either. You could view that as a denial of
old age, but we felt, hang on, how useful is it to have a referenda?
If before you even start there is going to be a substantial majority
of people who simply will not pay any more regardless?
Q193 Mr Betts: Let us come on to the
issue of the balance of where the funding comes from, either from
locally raised taxes or from the centre. What difference do you
think it would make to the accountability of the county council
if the amount of money that you spent that came from local taxes
Ms Bakewell: I think that would
be good. I think there should be local accountability for the
money that is spent, and it should be raised locally. I think
that is the right way forward. It is much more transparent. People
can see where their money has gone. They can, through consultations
such as the one we have done, have an input into where that money
is spent. However, they have to be able to afford it, and currently
council tax is not affordable.
Mr Bilsland: I think, Cathy, we
would add to that that if business rates was repatriated, which
we believe should be the case, that would also result in a much
better connection between local authorities and local businesses,
which would also be seen as a very good thing.
Q194 Mr O'Brien: Would you say that the
same principle should apply to business rates, that the business
should be able to afford it?
Mr Bilsland: Business would say
it cannot afford higher taxes, but we are saying two things really.
First of all, we are saying let us repatriate it to begin with
and that would improve the balance of funding and accountability;
then let us look again at whether a business is paying its fair
share, although our experience is that local council tax payers
are having to cover the costs that business might have been paying
had we had a local system.
Q195 Mr Betts: What do you think might
be a fair and reasonable split then? Currently, I think, from
the figures that we have had, Somerset has a relatively high percentage
of its spending funded by local taxation. I think it is 37% of
the total, which is higher than the national average of 25%. What
balance do you think we should be working to on a national basis?
Ms Bakewell: I would think over
50%, between 50% and 75% is reasonable to be supported locally,
but, as I have said before, it has to be affordable, especially
relating it to the local householders.
Q196 Mr Betts: So we are going to increase
the amount raised locally, and the grounds for that is that that
gives you greater accountability. Is that the real reason?
Ms Bakewell: It gives us greater
accountability. However, if more is raised locally and we still
have the same government restraints on what we spend the money
on, then that would, I think, be unreasonable, and that would
not be transparent, and I do not think the local population would
understand that. I think there has to be some relaxation by government
on what the money is spent on. Whilst I support putting money
into education and have always done that and would always passport
through to schools wherever possible, the increasing trend towards
ring-fencing is not particularly helpful. Is local government
there just to deliver National Government's priorities?
Q197 Mr Betts: We may come on to that
in a minute, but still on accountability, how do you think you
can measure whether accountability is improving? One idea is that
we ought to be looking at the turn-out in local elections?
Ms Bakewell: Yes.
Q198 Mr Betts: Would you see that was
a reasonable measure of accountability, that if we say to local
authorities, "You have got the right to raise more taxes
locally, more of your spending will be funded locally", then
turn-out, or if it does not then it has failed?
Ms Bakewell: It would not just
go up because more money was raised locally. There would have
to be other measures in which the local population were engaged
as to how the money was spent. Certainly a lot of what I do is
about trying to re-engage the public with the county council,
which is often seen as remote and just providing the Government's
agenda rather than following the one which the local people want.
So there are some issues about re-engaging the electorate, but
certainly electorate turn-out is very, very important and in the
county, in the rural areas, there tends to be a much higher turn-out
than in the urban areas.
Q199 Sir Paul Beresford: Can I ask you
to explain what I see as a small quandary? You say you want it
to go up to perhaps 50/50 Central Government funding, which increases
accountability. On the other hand, you have done your efficiency
cuts and you cannot cut your expenditure, therefore the council
tax will go up dramatically, and you then make the differences
with shifting Central Government off your back. Is that going
to be sufficient: because you told us at the same time that if
the council tax is too high the rebellion that has already come
up over the last couple of years is going to be even worse?
Ms Bakewell: It is a difficult
situation. It is not a question of just getting government off
our back, it is a question of a balance between local government
priorities and national government priorities and about where
the funding actually comes from. At the moment the effect of gearing
is such that the withdrawal of central government grant, in order
just to stay still the council tax has to go up 4% for every 1%
increase in spending. That is a very difficult concept to get
over to members of the public; very, very difficult.