I have received news today that from a technical guidance issued by the Government it is minded – which basically means it is going to do it – to cap town at least seven town councils in Cornwall from 2017. With a further threat of all Town and Parish Council precepts if there is a too large of a rise in the precept.
Since 2012/13 the Government has applied a core Council Tax referendum principle of 2% on major authorities, such as Cornwall Council. If an authority wished to increase its Council Tax above that level (excluding the Adult Social Care precept that was introduced in 2016/17) it would be required to carry out a referendum of its residents. A referendum of this sort would cost in excess of £750k to hold. So the likelihood of holding one is slim.
In the past these referendum principles have not been applicable to local Town and Parish Councils, although the Government has always indicated that it would keep this under review.
Nationally, the increase in the average Band D Council Tax levels set by Town and Parish Councils in 2016/17 was 6.1%, which was markedly higher than in previous years. One of the reasons for this increase is these Town and Parish Councils have taken on more services and responsibilities like in Cornwall due to the staggering cuts to local government funding. In Cornwall the increase in these precepts is around half of the national average. As follows
Due to the larger increases in Town and Parish precepts, the Government has now indicated that it is minded to apply the referendum principles to ‘higher spending’ Town and Parish Councils in 2017/18.
A higher spending council is defined in the consultation paper as one whose Band D charge in 2016/17 was higher than £75.46 (equivalent to the Band D charge for the lowest charging District Council) and which had a precept in 2016/17 of more than £500,000.
Such parishes would face the same referendum principles as shire districts; increases of less than 2%, or up to and including £5 on the Band D charge (whichever is higher).
However, to make things more complicated (as anything to do with tax and the Govt is), the Government has also said that it wants to ensure that parishes continue to have the flexibility to be able to take on responsibilities from other tiers of local government.
Therefore a degree of complexity has been added to the proposal; in that the referendum principles would not apply where there has been a transfer of responsibilities and where the following three conditions are satisfied:
- The parish council and a principal council covering the area of the parish council have each resolved that a particular function carried out by the principal council in relation to the parish council’s area in the financial year 2016-17 is to be carried out instead by the parish council in the financial year 2017-18;
- The parish council and the principal council have agreed the reasonable cost of the exercise of that particular function in the parish council’s area by the parish council in the financial year 2017-18;
- That the agreed cost, if collected by way of the parish council precept, would take the parish council over the threshold of a 2% or £5 increase on the previous year.
Using the 2016/17 precept information, eight of the Town Councils in Cornwall would be affected by the above proposal. These are: Bodmin, Bude-Stratton, Camborne, Falmouth, Newquay, Penzance, Saltash and Truro. As far as I can tell, Helston with a precept of £303,691 would be excluded from the cap, and therefore, Porthleven would be excluded too.
Importantly however, it should also be noted that the final two paragraphs of the consultation paper state:
A large proportion of parishes are modest in size – for example, around 4,000 parishes have precepts of £25 or less. However, the Government is aware that increases in these precepts continue to concern local tax payers and is therefore prepared to consider extending referendums to all parishes.
Which basically means you raise the precept too much, and we will cap you.
The consequences of capping are huge. As Town and Parish Council have been taking on services for Cornwall Council to safeguard them rather than see them close. I know local council’s have not always like taking on services, but they have taken a more pragmatic approach rather than losing a service. Like in Porthleven; where the town council now owns and runs the public toilets and all green spaces (which it does not already own).
Of course, the Government is saying it is consulting, but from my experience of the Governments consulting it should be interpreted at a ‘heads-up’ we are about to do this. This
heads-up consultation lasts till the 28th October 2016 – just over three-weeks away.