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COUNCIL TAX FREEZE FOR NORTH DORSET

North Dorset District Council agreed to freeze its share of the Council Tax for the second year running at its council meeting of Thursday 23 February.

This means that Council Tax payers in North Dorset will pay £104.78 in 2012/13 for their district council services, exactly the same as last year. This is some £60 a year less than the Band D householder pays on average in the rest of the country.

Cllr Peter Webb, Leader of the Council, said: “I am pleased for the tax payers of North Dorset that we are able to freeze Council Tax once again this year, but I am disappointed that the government has moved the goalposts regarding local taxation and threatened to penalise councils if they increased Council Tax. This creates a great deal of uncertainty about how a very low taxing district such as North Dorset will be able to fund essential services for local people in the future.”

Cllr Webb continued: “It is to be hoped that the government will soon correct some of the major inequalities and deficiencies of funding, particularly with respect to rural areas.”

Cllr David Milsted, Leader of the liberal Democrat group, said: “For the sake of a penny a day, NDDC has given in to threats and bullying. This decision is bad news for local democracy, and marks the end of any trust our council had in the Government’s so-called Localism Agenda.”

The opposition Liberal Democrat group and one Independent councillor voted against the proposal to freeze Council Tax.

The Council had originally received a recommendation from Cabinet to increase the tax by 3.49% to ensure its financial viability and enable it to continue to provide essential local services. However, recent government comments have steered the Council towards accepting the lower offer of a one year 2.5% grant instead.

In recent years the Council has reduced its costs by 41% through a range of shared services, by reducing management costs and managing vacancies. Employees have had their pay frozen for the last two years and a further wage freeze is expected this year equating to an overall 15% pay cut according to GMB union officials.

The Council Tax bill is made up of charges from Dorset County Council, Dorset Police Authority, Dorset Fire Authority and North Dorset District Council together with charges from Town and Parish Councils. The District Council element represents approximately 7% of the bill.

Rural councils such as North Dorset receive less government funding per head of population than urban councils, despite costs per citizen being higher.

The Council is likely to have to make large reductions in its budgets from 2013/14 because of further planned reductions in government funding.

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For more information contact: the Communications Manager at North Dorset District Council on 01258 484100; phyde@north-dorset.gov.uk

NDDC votes not to raise Council Tax but accept the Freeze Grant offered by Coalition Government

Currently the amount paid to NDDC from Council Tax on a Band D property is £104.78 per year (the Base Rate), where as East Dorset’s is £190. Cabinet wanted to raise North Dorset’s by 3.49% which equates to 1p extra per day, a yearly increase of £3.65. this would have raised the Base Rate to £108.43 meaning that next year when there is no Freeze Grant on offer from Government we would be able to raise £108.43 by 3.49% which would still be a very minimal raise of £3.78 taking it to £112.21 per year. To a Council having the lowest Council Tax in Dorset and 7th lowest in the whole country it was deemed necessary.

3.49% was chosen because a raise of 3.5% or more would entitle the community to call for a Referendum which would cost so much money that it would negate any proposed raise contested.

The government offered a Freeze Grant which would give those Councils that did not raise their Council Tax a grant to the equivalent of them having actually raised it by 2.5%. A problem perceived with this is that when the Freeze Grants end after this year, our Base Rate will still be very low (£104.43) and if all the constraints with regards capping future raises of 3.5% and Referendums still apply we will in my opinion, have a very difficult task ahead ensuring that the people of North Dorset continue to receive the services that they are entitled.

Recently MP Grant Shapps has stated in no uncertain terms that any council raising their Council Tax will, next year have their Base Rates put back to the level it was before they raised it, (the period 2011-2012) when future Government Funding is calculated.

It was therefore the majority view at NDDC in today’s Budget meeting that the Council Tax Freeze on offer was taken; there would have been no future benefit in refusing it and raising Council Tax.

“The benefits that would have previously been realised by raising Council Tax would no longer be available. Any increased Base Rate would be negated when future government funding for North Dorset District Council was calculated.”

Read the Budget Speech made by the Leader of North Dorset District Council (Below)

Budget Speech 2012/13

Cllr Peter Webb (Leader North Dorset District Council)

Chairman, This is the tenth successive year that I have stood in front of this Council to propose its budget for the following year. I think that has given me an opportunity to offer some broad comments on some of the enduring characteristics of the rural local government experience since the turn of the century. What is local government? Is it a place where local wishes are translated into local action with local funds by accountable elected members? Or a place that is required to implement central government edicts in a locality – essentially without regard to local interests or source of funds? I suppose it is bound to be a mixture of the two, and with a typically British lack of clarity, the distinction between local and central government is not codified, and therefore difficult to define. It is consequently flexible. It is worth remembering that it is central government who makes the rules of the day, and they have endless ways of using carrots and sticks and brick walls, to get their beasts of burden to move where they want them to. What is ironic is that during the expansionist times under the previous Government, there were heavy central rules, which reduced local choice and discretion; and yet the current Government – more philosophically supportive one would have thought of local choice – pursues contraction by reductions in funding at a faster rate than it can unpick the burden of duties imposed on local government; and this also results in reduced local choice and discretion. It can also be observed, that irrespective of the colour of central government, the beasts of burden of local government seem to have had their dietary regimes fixed: namely the ones that were well fed in the past can continue to be relatively well fed; and those that preferred a slimmers diet in the past must now continue to slim, no matter what weight loss has already resulted.

Whatever you may understand about the trend towards ‘Localism’, I detect that the trend towards local choice in the traditional sense of local democracy is declining remorsely. Furthermore, I suspect that the endgame for local government by central government will be Unitaries, justified effectively from the position that England cannot afford the luxury of district level democracy, any more than Scotland or Wales were afforded it. I hope that either I am wrong, or that the demise of the District Council in England is a long way in the future; they are the only major local voice in local government with effective representational roots in distinctive communities. Another clear trend is essentially the continuous reduction of public expenditure, combined with the gradual erosion in average standards of living across the nation. This may sound grim but alternatives are likely to be ten or a hundred times worse. Essentially the national money elastic has been stretch too far – it either needs to be contracted in a controlled way or else it will snap back at a destructive rate.

This is all pretty unpopular stuff for Central Government. There is also the politically sensitive beast of Council Tax to tame. Although never a popular tax, Council Tax suits Central Government rather well. It is set, collected and explained at local level, and the many strings that Governments pull are not very visible or easily understandable to the general public. There is only one danger, and that is if all Councils start putting up council tax by large amounts, then it’s pretty obvious that Central Government is the cause, and could even be blamed! This happened in 2004, and the backlash was council tax capping, which essentially squashed local representative democracy in a traditional mode. It also prompted the likes of this council to pursue successful new engagements with local communities to help them sustain selected local facilities. Unless Government takes action to control Council Tax rises, the consequence of cutting central funding by say 10% in a year, with no other changes, is more or less a 10% increase in Council tax. Now …. that really wouldn’t go down too well would it? So some clever obstacles such as referendum triggers and one-off grant schemes are brought into play, designed to channel most Councils down a path of freezing Council Tax at 2010/11 levels for a couple of years. A straightforward 2.5% equivalent grant for 4 years did the trick for all councils last year; this year the offer is for 2.5% equivalent for one year only. For Councils with average or high tax levels, this is sufficient incentive to fund a further freeze this coming year.

However, our Council does not charge near or above average tax levels. It currently charges 60% of the average District Council Tax. It has been forced down a road in the last seven years which results in it giving a 40% discount compared to the national average for District Councils. It has also done almost all it can do in that time to reduce internal costs, and options for yet more cost reductions are becoming severely limited. The scope for transferring further responsibilities from the District Council to other parts of our communities and their structures is also limited, although we remain committed to engaging with local communities to make the best of the opportunities that can be mutually engineered. Costs are above average in rural areas like North Dorset, therefore, all other things being equal you would expect NDDC’s tax level to be recognised as clearly good value for money if it was at or under the average tax level. That means it would be good value, relative to the rest of England, if it were around £170 a year.

The revenue budget has been under active examination and discussion since at least last November, when a very well attended budget workshop examined a number of key options, as well as the trends and economic context in which we operate. Since that time, it is increasingly clear that there are additional adverse indications affecting the outlook for both expenditure, and income. We have seen recent indications that the current year’s budget looks like being overspent by around £350k; it is worth noting that this was the amount of unbudgeted income reduction from last year when the expected Planning Delivery Grant stopped after we had set the budget and had to find in year. That meant we had to find about £1M in savings in the current year, a 41% reduction of our net budget over recent years. This has made this year very tight indeed and it is the weaker than expected income that is primarily responsible for the present blip on overspend. That is specifically taken into accounted for our budget next year. However, on top of all the formal estimates dealt with in the budget papers, I can see a clear trend toward an increase in future revenue cost risk. I put this in the order of £500,000 a year over the coming years, which amounts to an increase of £20 on Council Tax. Put another way, in the current context, (and that means at current levels of central funding and other incomes), I consider that our Council requires a level of Council Tax of around £130 p.a. to be able to sustainably meet its responsibilities, essentially those of statutory obligations and good community practice. It can scrape by on less for a year or two, and that is the direction chosen in the recommendations laid before Council. There are two main choices for this Council: to aim to scrape by using the one-off ‘freeze grant’ offered by Government; or to scrape by, by raising Council Tax by an amount below the referendum trigger, which would amount to a minute increase of 30 pence a month for the average household.

The calculation of the public interest for North Dorset was perfectly clear on the 6th February, when Cabinet recommended to Council that NDDC’s tax rate should not be frozen, but rather be set at a level some £60 a year below the average rate for District Councils in England.

Since that recommendation was made, the government has indicated its clear intention to move the goalposts, which both changes and confuses the assessment of the future public interest in North Dorset. The new message is that the Government is particularly keen that there should not be council tax rises this year. On top of the carrot of a temporary freeze grant, it is now adding the stick that it could/would adjust the new funding formula for next year, and onwards, to negate any benefits that individual councils gained by increasing their tax rate this year.

I suppose if I were brutally honest, I am in the ‘once bitten, twice shy’ camp. Before capping was introduced, I did not expect a British Government to interfere so blatantly with the fundamental local responsibility of local government. To their shame and my embarrassment, in 2005 they did, and maintained central control over what look like local taxes for many years. With the demise of the previous Government, one had hopes for greater respect for local autonomy from the current one. Sadly, the national coffers are now an overriding priority and this Government has enough unpopular things to do without the spectre of uncontrolled council tax rises as well. So it is understandable that Government continues its combinations of sticks, carrots and brick walls to channel its local government beasts of burden down the best path for central government. This is not a healthy time for local government, particularly, poorly funded councils, who have so little local choice allowed to them, that the term ‘local’ hardly seems appropriate. There is one small ray of hope for beleaguered Councils such as ours in the future, and that is that the present review of central funding will provide some balancing up and additional funds to more equitably support each resident in rural areas, where average costs are higher, at the expense of the better fed urban areas.

I would like to propose a small increase in this Council’s tax rate, to the comparatively very low level of £130 a year for a Band D property. This would provide a secure income for this Council to discharge its short and long term responsibilities whilst offering its residents exceptionally low taxes. However, for all the reasons I have just been discussing, I cannot do that. Instead I propose that we do as the Government requests and accept their offer of a freeze grant for one year. As far as I can judge, despite the numbers that were clear when Cabinet recommended an increase, the freeze route now looks so close to what would happen with a small rise in tax – and the subsequent promised reduction in central funding – that it is no longer clear which route would be the better medium term choice for our residents. On a 50/50 assessment, it is the freeze route that wins. That means that next year’s District Tax rate will be the same as this year’s and last year’s, namely £104.78 per annum for a Band D household. The budget will be balanced by a small adjustment in planned savings, without altering the expenditure intentions on any service from those in Cabinet’s recommendations of the 6th February. It is now to be hoped that Government will soon correct some of the major inequalities and deficiencies of funding treatment with respect to rural areas in particular. For clarity, the proposed budget continues the current level of support for concessionary travel, but without prejudice to the scheduled review.

I would like to pay tribute to the quality work and analysis that officers of this Council have put in to help us examine the complex and changing scenarios we are in. I would also like to thank not only fellow Councillors, but the many others in the North Dorset Community who have assisted us in the process of establishing this budget with its continued commitment to our communities and the further improvement of value for money. I commend my proposals to this Council.

PW

Cllr Peter Webb (Leader North Dorset District Council)

23.2.2012

Ministers have given the clearest indication yet that councils planning to put council tax up next year will face political retribution.

In a parliamentary debate on Wednesday, housing minister Grant Shapps said councils that reject the government’s offer of cash to freeze council tax could see their funding base altered next year.

The comments follow a veiled threat made two weeks ago by communities secretary Eric Pickles, which at the time was played down by the Department for Communities & Local Government. However, Mr Shapps appeared to confirm that threat when he suggested authorities’ 2012-13 tax base may not be the one used in the new funding system to be introduced the following year.

Speaking in the House of Commons on Wednesday, Mr Shapps was asked to confirm whether councils accepting government funding for a council tax freeze would be left “worse off” because the grant was for one year only and would result in a drop in income in later years.

Mr Shapps said: “The answer is that I cannot confirm that, as we have not described from where we will take the base. It is therefore a mistake for local authorities, based on today, to think that if they ramp up their council tax, that will automatically be taken into account on transition to the new system.

“We have not made a decision or an announcement on that, so if councils want to go ahead and take the risk, they should first listen to the warning from this Dispatch Box.

“With such a big change in the way that local government finance operates coming down the line in 2013, they cannot, right now, factor in their base by putting up council tax. I cannot confirm that today, and they should think not once, not twice, but three times before putting up council tax this year.”

So far 27 councils have rejected the government’s freeze funding – equivilant to one year’s 2.5% increase – with many arguing they cannot afford to lose the income from their tax base in later years without cutting services. Proposed increases range from 2.46% to 3.5% – see LGC blog for full list.

However, DCLG is currently designing a new local government funding system to replace the funding formula and that will include a decision on baseline levels for all councils.

Mr Shapps’ threat suggests tax-raising councils who thought they were building in income for the forseeable future may be forced to start the new system, to be implemented in March 2013, with a council tax base dating from 2011-12.

Mr Pickles previously alluded to a similar danger to future funding levels, but then appeared to back-track.

The LGA declined to comment on Mr Shrapps’ specific threat, but after several days of ministerial pressure on councils to accept the freeze funding, chairman Sir Merrick Cockell (Con) defended councils right to make their own decision.

“They are faced with a tough call over whether or not to shield more services from reductions by increasing council tax revenue,” he said. “These decisions must be based on local priorities and councillors know they will be judged solely by the people they represent when the votes are cast in the next local elections.”

Sir Merrick said the local government funding settlement for 2012-13, which Mr Shapps confirmed in Parliament on Wednesday, showed “local government is carrying more than its fair share of public spending cuts” and he contradicted ministerial claims that councils could avoid cutting services. “Further reductions in frontline services are unavoidable”, Sir Merrick said.

Commenting on the first two years of local government cuts, he added: “Whitehall departments can learn much from our record as they try to achieve their own, much more modest, saving targets.”

On the 25th March at least two more shops in Gillingham High Street will close down, “Fresh and Fruity” and “Cooks Carpets” will cease to trade on that “Dark” day, others are still trying to balance increased rents and enforced long leases with the low footfall currently experienced. Bob Inge of “Gillingham Photographic” is to retire rather than commit to the ten year lease on offer from landlord, Mr Hopkins.
The promise that an Asda store on Station Road would increase the footfall in the High Street has never come to fruition. At peak times I have seen the supermarket’s car park full and at the same time the High Street deserted.
The rents for some High Street shops are up for renewal in March and the proposed raise has been the final straw for some local shopkeepers.
The problem of low “foot fall” in the High Street is making it very hard to earn a living, Mike Long of “Fresh and Fruity” said, “I have my family to support and I could earn more money working the same hours in Asda.”
I am just as much at fault as a lot of you, I have only been into “Fresh and Fruity” a handful of times and “Cooks Carpets” never. What is the saying? “Use it or lose it”, well we didn’t use it and we have lost it, on 25th March they will have gone. What will we tell the people who move into Gillingham in this fast expanding town when they ask why there isn’t a Butchers, Bakers, Fruit and Veg shop, Carpet shop, Photographic shop…the list will go on. Will we say “The shops failed” or will we tell the truth “We failed the shops!”. Since I became a District Councillor I have done my best to keep in touch with those who elected me. I ask how could we improve the Town and what would people like to see here in Gillingham? Nine out of ten people mention the High Street and how run down they think it is. How they would like to see brand clothes shops or maybe “Currys” or “PC World”, every week there are new rumours started through wishful thinking as to the shops coming to town, so far this week I have heard that “Argos” is coming and “B & Q”, well let me tell you, at present they are not and why would they?
What is the answer? I am asking all of you for your views, how can we turn this around and get our High Street back. A local Councillor said to me last year, “The High Street is dead and soon all the shops will be out on the business parks!” Is that what you want?
If we are fortunate enough that the soon to be, empty shop premises in our High Street are taken over, please use them. If we use them we will create more footfall and in doing so will attract more businesses. It is down to us.
I am fed up with reading letters in the BVM where people are knocking Gillingham, it is very easy to find faults and it doesn’t take much intelligence. The hard part is finding solutions, well this is your chance, a Town and District Councillor is asking for your input. Tell me what you want; work with me and together we can create the Town we all want to live in. This is your town, take some responsibility for it.

Cllr David Walsh
Champion for Gillingham

Today at North Dorset District Council it was recommended by Cabinet to Council that Council Tax be raised by 3.49% which equates to an additional 1 pence per day.

What are your views?
Please comment

Please note that the opening hours of Gillingham Police Station have now
changed.

In an emergency always call 999.

I am very pleased to inform you that a small group of Community minded people have set up an on-line nespaper/magazine serving Gillingham, Shaftesbury and the surrounding parishes. It has only just started so please give it your full support.
www.westernleader.co.uk