Examination of Witnesses (Questions 60-79)
SIR SANDY
BRUCE-LOCKHART,
SIR JEREMY
BEECHAM, SIR
DAVID WILLIAMS
AND SIR
BRIAN BRISCOE
21 NOVEMBER 2005
Q60 Mr Betts: But that is on top
of the money you had last year, so includes the one million?
Sir Sandy Bruce-Lockhart: No.
Q61 Mr Betts: How do you get to your
£1.5 million black hole then? If you are saying a million
has been taken out and you have got costs pressures of £2.8
million which has only been dealt with to the tune of £600
million and your grant increase is £300 million but actually
some of that has been taken away by other things, so the real
increase is round about £50 million, you are saying you have
got the costs pressures of £2.8 billion which have been dealt
with to the extent of £600 million, that leaves £2.2
billion , an effective grant increase of only around £50
million, which is £2.15 billion, and you are saying you have
got £1 million which has not been repeated, that comes to
£3 million?
Sir Sandy Bruce-Lockhart: Exactly.
Q62 Mr Betts: So how is it 1.5%?
Sir Sandy Bruce-Lockhart: Because
we are making substantial efficiency savings, and, as both the
Treasury and ODPM have said, local government is leading on the
efficiency savings right across Whitehall and the . . .
Q63 Mr Betts: So you are saying the
gap is really £3 million and currently you are filling about
half of that by efficiency savings?
Sir Sandy Bruce-Lockhart: Indeed,
we are.
Mr Betts: It would be helpful to have
it set out, because we had a bit of trouble working out precisely
what the situation was.
Q64 Sir Paul Beresford: Am I right
that you are losing various areas: the Safeguarding Children Fund
is finishing. That is £100 million?
Sir Sandy Bruce-Lockhart: Yes.
Q65 Sir Paul Beresford: A £100
million disappearance from the Access and Systems Capacity Grant,
a £35 million drop in the Planning Delivery Grant?
Sir Jeremy Beecham: Yes, that
is why the 1.5% is a generous estimate in one sense. Comparing
like with like it is probably less.
Q66 Sir Paul Beresford: It is probably
about 1.3%?
Sir Jeremy Beecham: Yes, I think
that is probably right.
Q67 Sir Paul Beresford: 1.5% is a
figurative high blown figure. In reality it is about . . .
Sir Jeremy Beecham: On a strict
like for like basis that is probably right.
Q68 Dr Pugh: On the efficiency savings,
are they genuine efficiency savings or are you just about cutting
back on activity in one way or another, and is that cash?
Sir Jeremy Beecham: No, it is
not all cash. I chair the efficiency task group in the LGA and
we have gone into this in some detail. There is £1.9 billion
being saved this year, including savings that were started in
the last financial year. Of that about three-quarters is cashable.
The rest represents effectively increased productivity, increased
productive time.
Q69 Dr Pugh: So not a reduction of
activity?
Sir Jeremy Beecham: That is right.
The best view is that this is genuine improvement. It is re-engineering
services and, you know, bearing down on pressures, not cuts in
services. Cuts in services do not count as efficiency savings.
Of course this was supposed to be reinvested in the front-line
services originally, rather than being used to cut down council
tax, but needs must. Some of the cash savings will be used to
keep down council tax.
Q70 Anne Main: I would just like
to take Sir Sandy back to his article and something he has just
said as well. In the meetings you have had with the ODPM in the
last fortnight it says you had some constructive talks about pressures,
and it has so far confirmed extra projected costs arising from,
amongst others, a list, but licensing. We had a councillor in
from the LGA two or three weeks ago who actually said that there
was a £1 million shortfall from the revenue generated by
the licensing fees and what she felt she would have to put on.
Are you telling me that you are going to have all those projected
costs met now so that it does not fall on the local council tax
payer? It says it is for the Government to ensure that the council
tax payer does not pick up the bill for any extra shortfalls in
grants to local councils, but I think the feeling is, from presentations
we have had from councils that we have talked to, that those costs
are not being met.
Sir Sandy Bruce-Lockhart: You
are quite right to raise those issues, and there is one issue
that we can turn around and around, the licensing issue, and one
around the sum and we have had an assurance. . .
Q71 Anne Main: Who from?
Sir Sandy Bruce-Lockhart: From
the Secretary of State, Tessa Jowell, and from the Deputy Prime
Minister, that the additional costs imposed by new legislation
on licensing would be paid. There are only two ways in which they
can be paid. They can either be paid by cash or by an increase
in fees, but we have had an assurance. I am simply assuming that
that assurance will be honoured.
Q72 Anne Main: I think that would
be very welcome to a lot of local authorities if that is the case,
because, as you say, there have been a lot of extra burdens put
on licensing, as I say, a figure of a million was given by the
LGA, and I know other authorities are the same, but you have had
that assurance?
Sir Sandy Bruce-Lockhart: We have
had that assurance and we have had that assurance on four issues
which have been set out. We have also been discussing in the last
week or so, and will discuss in the next week, about how some
of the other burdens in there, as we call them, which is what
licensing is, could be removed by the spending department.
Q73 Anne Main: And pensions. So that
includes local authority and police pensions?
Sir Sandy Bruce-Lockhart: No,
local authority pensions. We have had an assurance about that
well, which is very helpful.
Q74 Alison Seabeck: In a sense Sandy
has half-answered the questions that I was going to ask. I wanted
confirmation that these additional costs were being met under
what is known as the new burdens procedure, and you have basically
said that they are.
Sir Sandy Bruce-Lockhart: Yes.
Q75 Anne Main: Council tax evaluation.
The Right Honourable David Miliband said that we need a clear
and complete picture of what we want local government to do before
we tackle how we can fund it. Do you agree with that and also
could the need to establish this clear and complete picture have
been identified before Lyons was appointed rather than waiting
until halfway through?
Sir David Williams: Yes.
Anne Main: Yes, you agree that you need
a clear and complete picture? You cannot have yes to both of them.
Well, you can, but I think I would like you to expand on it.
Q76 Chair: I think Sir David was
saying yes, it should have been done at the beginning, but yes,
it is necessary.
Sir David Williams: Thank you
very much.
Q77 Anne Main: Yes to both of those,
that it could have been done. Why do you think it was not then?
Sir David Williams: I think the
word is "politics".
Q78 Anne Main: What does that mean?
Sir David Williams: I think it
was not expedient for the Government to go ahead with the revaluation.
Q79 Anne Main: What point?
Sir David Williams: For what reason?
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