Examination of Witnesses (Questions 200-219)
11 MAY 2004
Q200 Chris Mole: How much grant have
you had withdrawn?
Mr Bilsland: In terms of withdrawal,
we have lost grant through formula changes and part of our case
has always been to challenge grant settlements on the way that
money is shifted away, not just from Somerset, but from the South-West
generally into other areas. For example, the year before last,
we lost over £12 million worth of funding through what was
then known as the Resource Equalisation Process. That did not
result necessarily in cash because, as you must know by now, the
system is totally complicated with floors and ceilings, but if
Q201 Chris Mole: You have not actually
lost any cash?
Mr Bilsland: You never know what
you have lost, because the formula does not tell you what you
would have had had some of these things not happened. We know
we lost what was called the "Formula Spending Share"
of £12 million. The Formula Spending Share results in extra
cash. Quite how muchit is not pound for poundwe
do not know.
Q202 Chris Mole: At the time when the
grant was going up?
Mr Bilsland: That is right, but
what we do know is if we had a fair level of funding for the county
council, for example, we would have extra grant in the territory
of at least £20-30 million, at least £20 million, of
education funding to get us up to an English average plus at least
another £10 million for all other services. So those are
quite big figures, £30 million, so that is worth another
15%, 16% on the council tax.
Q203 Sir Paul Beresford: The local protest
on the council tax coincides with it?
Mr Bilsland: Yes.
Q204 Chris Mole: The resources that central
government allocate are, as we were just touching on, both ring-fenced
and passported. You have described this as undermining local democracy
with the current arrangements. Can you explain what effect ring-fencing
and passporting has on county council budgets, what discretion
you have and how you exercise it, and, in practical terms, what
is the difference between ring-fencing and passporting?
Ms Bakewell: In terms of passporting,
there always has to be a debate about whether we are actually
going to passport to schools. You have to have that debateit
is quite right to do thatand if you choose to passport,
which we always have done because we support schools, what have
we got left with the rest of the services? There are key performance
indicators for every service and, in order to deliver on a lot
of KPIs, there has to be resource input. So there is then a debate
about, "Okay, which of our KPIs are we going to put at the
top of the list?", and they are always those about elderly
and children on the at-risk register and those people who are
extremely vulnerable. So you work down the list until you get
to those services which are important, but you have to prioritise
them. Then there will sometimes be things like trading standards.
Well, that is important, and people do value trading standards
services, but at the end of the day you have to balance the budget
and, in order to keep the council tax down at a level which people
can afford and are prepared to pay, there have to be some very
tough decisions made.
Mr Bilsland: In two other areasit
is not just schoolson the care of the elderly, for example,
we have bed-blocking and bed-blocking fines, and certainly we
have no choice really, even though we wanted to anyway, we have
to fund care for the elderly costs. It would have cost us more
not to have done that, but also, on capital, our local transport
planning settlement is a big capital investment. Now although
we want to do it, it is made very clear to us by Government office
that, if we do not fund capital investment on transport at LTP
levels, then future settlements will be massively reduced in all
this funding; so again there is an indirect impact.
Q205 Chris Mole: So you have to find
the revenue implications of that coupled with funding implications?
Mr Bilsland: Indeed, although
we do get some support for the costs. Ultimately we have to meet
the capital financing costs, the borrowing costs.
Q206 Chris Mole: I think, Cathy Bakewell,
you were touching on the priority that you give to education,
including it is a central government priority which is delivered
by local authorities to national standards. It is not justifiable
for the Government to ensure that the resources to which it gives
such high priority are delivered locally?
Ms Bakewell: Yes, I think that
is the case, and it would be my priority as well, is the other
ring-fencing that we have had difficulties with, and, as we have
already indicated, education is not necessarily the priority of
quite a large section of our population. I personally find that
quite sad, that some elderly people, a large proportion of elderly
people, are not prepared to put money into education; they perceive
that education is adequately funded. It is a priority for is.
We have to sell that to the members of the public that we are
going to put money into education, because not only is it the
Government's agenda, it is our agenda as well because children
are our future.
Q207 Chris Mole: So do you think there
is ever any justification for capping as a final resort? Surely
the Government needs to be able to put a ceiling on it at some
stage if efficiencies are not being achieved in councils or, as
maybe has been described already, some local electors just cannot
Ms Bakewell: I think capping is
a pretty blunt tool. It does not really relate to the local population.
If councils raise council tax too high the local electorate will
pretty soon let them know.
Q208 Chris Mole: One used to say it was
a blunt tool when it was universal, but six authorities this year
have been capped. It is not quite so blunt; it is quite precise?
Ms Bakewell: It is quite precise,
but it does not help them. It does not help the residents in their
area. They will have to pay more for the same services if they
are going to be re-billed, and that is just dead money: it does
not produce any better increase in services. I think capping does
not work. Councils still have priorities. They still have the
people there which they have to provide the services for. I think
it is better for councils to relate to their electorate and to
their residents and for them to decide what is an adequate level.
Q209 Chris Mole: So you do not think
it was the threat of capping which kept increases that were on
average somewhere between 10 to 20% last year in low single figures
Ms Bakewell: It was there in the
background, but it was not an overriding factor with me. The overriding
factor was the number of letters I was getting from the elderly,
pensioners and people on low income.
Q210 Mr Clelland: To go back to the question
of education spending, you say it would be a priority for you
too. You would acknowledge and support that. Where would that
put you? If we had greater local accountability in an authority
like yours where you say the majority of the population, or a
huge section of the population, do not give education the same
priority that you would yourself, how does local accountability
Ms Bakewell: Obviously you have
got the pensions on the one side and then you have the parents
of the children on the other side. The parents of the children,
the teachers in the schools and the head teachers are all very
supportive of the education that we provide. We are a three-star
LEA and the education that we do provide is first-class. We have
very, very few schools with serious weaknesses, and we do not
have any in special measures. The two divides come together, if
you like, and the council has to decide on that, but we are elected
to deliver services and, on the one hand, we are delivering services
and education to children and young people and, on the other hand,
the other main priority is obviously the frail elderly.
Q211 Mr Clelland: But at the moment,
as far as education is concerned, central government is dictating
the priority even though you support it, because it is ring-fenced
and passported, etcetera. If that central government funding was
lifted because you want greater local accountability, is there
not a danger that education will suffer in an authority like yours?
Mr Bilsland: We did some research
on this. In the days before passporting, local authorities already
spent a lot more on education than the old SSA figures. Now that
you have got passporting most councils start off with the premis
that they will; only passport no more and no less, ie the evidence
is there, that if there was local choice there would be even more
spending on education than as a result of passporting.
Q212 Mr Clelland: In Somerset?
Mr Bilsland: Nationally.
Mr Clelland: We are talking about Somerset!
Q213 Chairman: Let us make it clear.
Do you think that more should be spent on education? If you had
total local control you would spend more on education, or would
you spend less?
Ms Bakewell: If we had more money
we would certainly spend more on education. As Chris has already
indicated, we are funded below the average.
Q214 Chairman: If you had the chance
to raise more money locally, would you raise more money locally?
Ms Bakewell: If it were affordable,
yes, I would.
Q215 Mr Sanders: I am intrigued by your
answer on capping, that the threat of capping was not what kept
your budget down but actually the representations from the public.
In areas that are being capped there is a case where the public
are actually egging the Government on to cap those authorities.
If you are capped is it councillors who feel the pain, council
officers or is it public?
Ms Bakewell: The pain is felt
by the public because of the rebilling costs, because that, as
I said before, is dead money, you do not get anything for the
cost of rebilling, and that obviously goes on to the council tax,
or the service cuts which support that; so, yes, it is the public.
Q216 Mr O'Brien: You referred to gearing
two or three times this morning and the unfairness of gearing.
This brings in the question of parish town and city councils.
It is a very interesting situation because gearing does not apply
to them. In your opinion what effect does this have on local councillors
when they come to make their decision on spending for the parish
and town councils?
Mr Lacey: So far as the parish
and town councils are concerned, they are delighted to have direct
accountability, much closer to the people than perhaps the principal
authorities. If they wish to spend money locally on a particular
project, it is likely they will have held a parish meeting to
discuss it. For instance, in my own parish, I have the question
of street lighting coming up in a fortnight's timea wonderful
rural issuebut it is all about spending, it is all about
directly involving local people: because it is a meeting in the
village hall held locally in the evening, we will get probably
one-sixth of the total population of the parish turning up at
that meeting. The hall will be full. That is very good direct
accountability. It does not suffer particularly from the problems
of the volunteer shortage.
Q217 Mr O'Brien: What would be the average
age of the people in the hall?
Mr Lacey: Complete representation.
There would be complete representation: mothers of young children,
that age group, right the way through to the older people.
Q218 Mr O'Brien: There would not be the
over 50's group then? We have been told that one of the problems
we have is the fact that a substantial number of the population
are over 50. Council tax is unfair; gearing is unfair; we are
looking for alternatives. In your case then the people who attend
the parish meetings are the younger population?
Mr Lacey: They would represent
the community that we have. Therefore, if there is a large proportion
of over fifties, then, yes, that will be represented. It goes
on the parish.
Q219 Mr O'Brien: The meeting you attend?
Mr Lacey: The meeting I attend,
I would say it would reflect the whole parish, and therefore the
over fifties, the grey brigade, will tend to be, not a majority,
but a significant chunk of the meeting.