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Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 09/07/2002
TACFIG - Update



The purpose of this report is to provide members with information about this authority’s continued role as the lead authority in TACFIG (the Town & Country Finance Issues Group). The report outlines TACFIG’s case for the reform of the local government finance system and indicates the significant success that the group has achieved in having its case heard. The report also outlines the Government’s timescale for implementing changes to the finance system and raises the issue of whether TACFIG has a future after 31st March 2003.
APPENDIX S

WAVERLEY BOROUGH COUNCIL

EXECUTIVE – 9TH JULY 2002


Title:
TACFIG – Update
[Wards Affected: N/A]
Summary and Purpose

The purpose of this report is to provide members with information about this authority’s continued role as the lead authority in TACFIG (the Town & Country Finance Issues Group). The report outlines TACFIG’s case for the reform of the local government finance system and indicates the significant success that the group has achieved in having its case heard. The report also outlines the Government’s timescale for implementing changes to the finance system and raises the issue of whether TACFIG has a future after 31st March 2003.
Introduction

1. In 1998, Waverley took the lead in creating the Town & Country Finance Issues Group (TACFIG). TACFIG is an all- party group of authorities that have both urban and rural characteristics - as a result of those characteristics these authorities find themselves particularly disadvantaged by the current local government finance system. The aim of the Group is to seek reform of that system.

2. TACFIG currently has 62 member authorities and is registered as a Special Interest Group with the Local Government Association (LGA). Councillor Mrs Susan Campany is the Conservative co-chair of the Group

3. TACFIG’s work is supported in Parliament by the All-Party Town & Country Group, which has generated interest from over 90 MPs across the political spectrum.

TACFIG’s Case

4. TACFIG’s case has had three main strands; the group wishes to see:-

A grant formula based on resident population, which is simple yet addresses the needs of all classes of authority. The formula should also be transparent and understandable to local communities. An equal annual grant for each local authority to cover the fixed costs of “being in business”, funded out of Revenue Support Grant (RSG) totals and distributed outside the formula – so that it provides real money. Direct involvement for districts in local Public Service Agreements.

5. The recently published (12th June 2002) draft Local Government Bill (see also separate report on this agenda) has introduced a new proposal – to merge RSG and redistributed NNDR into a single grant stream. TACFIG has added opposition to this proposal to its case.

TACFIG’s Work to Date

6. TACFIG made submissions to both parts of the Government’s review of the local government finance system and was pleased to see the principles of its case reflected in the Local Government White Paper (published in December 2001). However, the white paper did not provide any detail of what the new formula (to replace the Standard Spending Assessment (SSA)) will look like. TACFIG has spent the past seven months campaigning to influence the formula detail. As yet, the campaign success can only be measured by the fact that it has given TACFIG a high profile. Recent achievements include:-

meetings with DTLR ministers;
a successful TACFIG meeting at the House of Commons – generating national press coverage in the form of a photograph in the Independent newspaper and local press coverage in several parts of the country;
a seminar with Neil Kinghan of the LGA as the keynote speaker and with the senior civil servant responsible for local government finance as a guest;
two feature articles and two news articles in the Local Government press;
an Early Day Motion (EDM) on the parliamentary order paper with 40+ signatures;
various parliamentary questions to Government ministers;
a place at the table for officers, at the relevant working groups with civil servants;
submission of written evidence to the Transport, Local Government & the Regions Select Committee inquiry into the draft Local Government Bill.

7. It is anticipated that the detail of the new formula will be published at the end of July for consultation over the summer. Unfortunately, even at this stage it will not be clear whether the substance of TACFIG’s case will be won. Notwithstanding the fact that the new formula is to be used to distribute support to authorities for the year 2003/04, the Government will only publish the principles on which the formula will be based. The Government will not provide figures or “exemplifications” of what the formula will deliver in financial terms to individual authorities until the settlement figures are made available in November/December.

TACFIG’s Future

8. TACFIG will continue to campaign until the settlement for 2003/04 is finalised. The Group may also have a role in opposing the clauses in the draft Local Government Bill that propose merging RSG and redistributed NNDR. However, it is likely that the LGA and other organisations will take up this last issue.

9. Given that the new formula for revenue support (to be known as formula grant) to local authorities will be implemented from 1st April 2003, it is questionable whether TACFIG has a future after that date.


10. TACFIG discussed options for its future at its last full meeting on 23rd May 2002. At that meeting, TACFIG members indicated that they wished to see the group continue in some form. The Group has requested more detail on its options, including the possibility of merger with other shire district groups, for its next meeting.

Implications for Waverley Borough Council

11. TACFIG is likely to have some success in eliminating the particular disadvantage suffered by town and country authorities. However, for Waverley this success will probably be tempered by a movement of Central Government resources away from authorities in the South East of England. Current indications are that there is unlikely to be additional funding for Waverley.

12. Waverley, as lead authority, continues to invest resources in TACFIG, over and above our subscription to the Group. These staff resources are contained within existing budgets but there is an opportunity cost to Waverley of not being able to use these resources elsewhere.

13. There are benefits to Waverley of having a national profile. There is also the ability to apply ideas and advice that arise in the TACFIG forum to issues that are of specific concern to Waverley, but not on the TACFIG agenda. For example, our TACFIG experience will be used to obtain support and lobby the Government against its proposal to take our housing capital receipts for redistribution elsewhere.
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Recommendation

That the content of this report be noted.

Background Papers (DoF)

There are no background papers (as defined by Section 100D(5) of the Local Government Act 1972) relating to this report.

CONTACT OFFICER:

Name: Louise Goodfellow Telephone: 01483 523092

E-mail: lgoodfellow@waverley.gov.uk

comms/executive/2002/03/099 28973