Agenda item

Cllr Richard Watts, Chair of the Resources Board and the LGA Task and Finish group on Business Rates Retention and the Fair Funding Review, and Nicola Morton, Head of Local Government Finance, introduced the report which provided a summary of the Government’s recently published consultation on the Fair Funding Review, and asked Members to comment on the draft LGA response which had been developed by the Task and Finish Group.

The consultation outlined the Government’s leading options for the structure of the relative needs assessment, covering suggested funding formulas, likely cost drivers, and techniques to weight cost drivers against one another. Some policy positions in the draft response had been previously agreed by the Leadership Board, and others had been developed by the Task and Finish Group. The Government were proposing for deprivation not to be included as a cost driver in the foundation formula, but the response drafted by the Task Group suggested that this should remain in the formula.

In the discussion which followed the following points were raised by Members:

·         Members agreed that the LGA response should state that deprivation should remain as a cost driver in the foundation formula, and it would be for the Government to work out how this should be weighted. A significant part of the LGA membership would agree with this, and the response should be clear and strong on this issue, but there should be robust evidence to support the weighting.

·         Regarding parking, it was highlighted that some councils had off street parking and others did not, so members agreed that parking income should not be adjusted for in resources equalisation. Taking other sources of income into account within the formula was complex, and councils who were entrepreneurial should not be disadvantaged.

·         Members agreed that the response should recognise the variation of tax bases and there should also be a strong message on redistribution. The new formula should be as transparent and as fair as possible.

·         Regarding adult and children’s services, the methodology should be considered as it still counted people over 65 as elderly when this should be raised to 75. High cost learning disability support should be commented on as this accounted for a high percentage of council budgets.

·         Regarding Area Cost Adjustment, the response should reflect the higher costs in rural / densely populated areas, and should reflect the work which had already been undertaken on this issue.  It was noted that journey times were included in the Area Cost Adjustment to reflect higher costs in rural and densely populated areas.

·         Members agreed that public health should also remain as a cost driver in the formula, and noted that the inclusion of public health was contingent on the final decision on whether the public health grant would be rolled into business rates retention.

Decision

The LGA Leadership Board:

1.    noted the draft LGA response to the Fair Funding Review consultation;

2.    provided comments ahead of its consideration by the LGA Executive and subsequent submission to the Government; and

3.    agreed that the final consultation response would be cleared by the Chairman and Group Leaders.

Action

Comments from Members to be taken into account when amending the draft consultation response. (Nicola Morton).