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Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 09/07/2002
Draft Local Government Bill

This report summarises the key proposals of the draft Local Government Bill and highlights the implications for Waverley. The resource implications are stated in the report and there are no environmental or “opportunities for all” implications arising from this report.

[Wards Affected: N/A]
Summary and Purpose

This report summarises the key proposals of the draft Local Government Bill and highlights the implications for Waverley. The resource implications are stated in the report and there are no environmental or “opportunities for all” implications arising from this report.

Introduction and Background

1. Early in 2002, the Government published the White Paper ‘Strong Local Leadership – Quality Public Services’. In mid-June 2002 the Government published the draft Local Government Bill which is intended to give effect to the proposals in the White Paper that require legislation.

2. The majority of the Government’s commitments that require legislation relate to local government finance.

3. There are still issues of detailed application that need to be resolved before the Bill is introduced and the timing of implementation will depend on available parliamentary time. The Government has invited comments by 23rd August 2002 and a draft response is attached at Annexe 1 to this report.

Key Proposal – Capital Finance

4. Key features of proposal:-

5. If the Government pool housing capital receipts, which are currently all usable as Waverley is debt free, this will significantly reduce the amount of Waverley’s capital investment in affordable social housing and improvements to the Council’s own houses. The total capital receipt from council house sales was 3.6m in 2001/02. The Leader has written to the Secretary of State, the Select Committee reviewing the draft Bill, and has arranged a meeting at the LGA with other affected authorities.

6. As Waverley is debt free, the new borrowing freedoms do not currently provide any benefit.

Key Proposal – Financial Administration

7. Key features of proposal:-

8. This will have a minimal impact as Waverley’s reserves are considered by District Audit to be adequate and robust budget setting procedures are currently in place.

Key Proposal – Formula Grant

9. A single grant, to be called “formula grant” will replace the Revenue Support Grant (RSG) and redistributed National Non-Domestic Rates (NNDR). The Secretary of State will inform the House of Commons annually as to the basis on which formula grant will be distributed to authorities. (A new system for the distribution of grant is expected for the 2003/04 settlement.).

10. Potentially, there could be a substantial impact on Waverley as the authority currently receives a relatively small amount of RSG (578,529) and could, in the future, find itself with a negative RSG entitlement. Under the present arrangements authorities that have a negative RSG entitlement receive no RSG but keep their full allocation of NNDR. If this proposal comes into effect, authorities with negative RSG will lose some NNDR.

11. The merging of RSG and NNDR cannot take effect without primary legislation although changes to the distribution of grant can. Standard Spending Assessments (SSA) will be abolished but no further detail has yet been released about grant distribution and therefore, Waverley will be unable to calculate its entitlement to grant under the new system in advance of the settlement date in November/December.

Key Proposal – Business Improvement Districts (BIDs)

12. Key features of proposal:-

13. Local businesses will be advised on BIDs as part of the annual budget process.

Key Proposal – Non-domestic rates

14. Key features of proposal:-

15. This will benefit small businesses in Waverley, but the Council’s own rate bill will marginally increase as a result of the self-financing arrangement.

Key Proposal – Council Tax

16. Key features of proposal:-

17. This would have an impact on resources and administrative complexities caused by a revaluation which could potentially affect the current very high rates of collection of council tax.

Key Proposal – Housing Finance

18. Key features of proposal:-

19. The transfer from HRA of rent rebates may have an impact on the General Fund if the Government do not provide 100% subsidy. The draft Bill does not specify the proposed rate and empowers the Secretary of State to specify in regulations.

20. Waverley is not currently in negative subsidy but it will be when rent rebates are transferred out of the HRA. The current rules allow negative subsidy to be credited to the General Fund and this proposal will need to be fully evaluated nearer to when the legislation takes effect. Finally, the Council’s business plan will need to meet the Government’s criteria to avoid any subsidy penalty.

Key Proposal – Powers to charge and trade

21. The Bill gives authorities the power to charge for discretionary services although this will be limited to the recovery of costs. These powers will be linked to the Council’s Comprehensive Performance Assessment category so the benefit to Waverley cannot be fully assessed at this time.

Key Proposal – Performance Categories

22. The Bill allows the Secretary of State to treat authorities differently according to the category in which they are placed by the Audit Commission following the Comprehensive Performance Assessment.


It is recommended that the Executive notes the implications of this report and endorses the draft response to the consultation, as contained in Annexe 1 to the report.
Background Papers (DoF)

‘Strong Local Leadership – Quality Public Services’: Local Government White Paper, DTLR, 2002.
‘Draft Local Government Bill’: Consultation paper, ODPM, 2002.

Name: Graeme Clark Telephone: 01483 523236
E-mail: gclark@waverley.gov.uk

comms/executive/2002/03/098 28999