Local Government Revenue (HC 402-ii) ODPM Committee 11 May 2004

Evidence given by Cathy Bakewell, Leader of the Council and Chris Bilsland, Corporate Director (Treasury) Somerset County Council, Peter Lacey, Chief Executive, Somerset Association of Local Councils; Nick Lewis, Director of Finance and Andrew May, Policy Advisor, SW Regional Development Agency, Francis Cornish, Chairman, South West Tourism; Albert Venison, Christine Melsom, Brian Jaye, Michael Schofield and Peter Webb, Is It Fair? Campaign.

Q210 Mr. David 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 affect that?

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. David 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 well with passports, no more and no less, i.e. the evidence is there, but if there was local choice there would be even more spending on education than as a result of passporting.

Q212 Mr. David Clelland: In Somerset?

Mr Bilsland: Nationally.

Mr. David 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.

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Q242 Mr. David Clelland: Are you saying that this would mean no more revenue for the council on that simple basis, that there will be no more revenue for the county council?

Mr Bilsland: No, the way the system works is that government grant equalises needs and resources. So, all other things being equal, if council tax revaluation happens and properties in Somerset and the South West go up a proportion more than the rest of the country, the government reduces grants to neutralise the impact of that. So as government reduces grants, that means therefore that tax payers in the South West will end up paying more council tax, but tax payers elsewhere in the country will pay less.

Q243 Mr. David Clelland: There will be a balancing out?

Mr Bilsland: Yes, there will be, but region by region there will be winners and losers.

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Q280 Mr. David Clelland: How many tax payers in Somerset on your current levels of spending would be better off under a local income tax and how many would be worse off?

Ms Bakewell: I should imagine probably--

Q281 Mr. David Clelland: You do not know. Have you done any calculations?

Ms Bakewell: No, I do not know precisely.

Q282 Mr. David Clelland: So we have got a situation where you do not know how many people are going to be affected by this, you do not know how you are going to raise money from the self-employed, you are not quite sure about that, you are not quite sure about the effect on business; you are not really quite sure about much. Why is this Somerset's policy when you do not know much about how it is going to affect the people of Somerset?

Ms Bakewell: It will affect the self-employed in much the same way as their income tax affects them now: they have to submit returns and--

Q283 Mr. David Clelland: Yes, but what they will want to know is: "How much is this going to cost me?" You do not know that, do you?

Ms Bakewell: No, not at this moment in time.

Q284 Mr. David Clelland: So this is the policy of the county council?

Ms Bakewell: It is.

Q285 Mr. David Clelland: But you cannot tell the people of Somerset how it is going to affect them?

Ms Bakewell: It will affect those who earn more. They will pay more, and those who earn less will therefore pay less.

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Q359 Mr. David Clelland: I assume from what you are saying that under the system that you are proposing - otherwise you would not be proposing it - that people like yourselves would pay less. Who is going to pay more in order to cover this?

Ms Melsom: Not all of us would pay less.

Q360 Mr. David Clelland: Some people are volunteering to pay more?

Ms Melsom: Some of our members are saying that they can easily afford to pay but they just do not think the present system is fair.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.