REVIEW OF PART OF THE BOUNDARY BETWEEN THE COUNTIES OF CEREDIGION AND PEMBROKESHIRE IN THE AREA OF THE COMMUNITY OF ST. DOGMAELS
REPORT AND PROPOSALS
Appendix 6
PEMBROKESHIRE COUNTY COUNCIL
COMMENTS ON THE NOTES MADE BY CEREDIGION COUNTY COUNCIL RELATING TO THE FINANCIAL IMPACT OF THE PROPOSED BOUNDARY CHANGE
The commentary within the technical note on such matters as Council Tax Base, Revenue Support Grant, Standard Spending Assessment and Council expenditure is noted. However, you will note from the following analysis that it is evident that a number of points of principle have been confused which, when taken individually, question the conclusions reached in the paper and their overall impact on council tax levels.
The following observations are made:-
1. Council Tax Base (see para 1.2 of Cerdigion County Council’s note)
If Ceredigion County Council were spending at S.S.A., then the transfer of Council Tax Base between the two authorities would be neutral. That is, the loss in tax base by Ceredigion County Council would be compensated by a corresponding increase in revenue support grant. As that Council is spending some £1.5m above S.S.A., then the impact on council tax levels would be very small indeed, some £0.60 for a Band ‘D’ property. The council tax base issue taken on its own would not have any significant impact on either Council, and certainly not to the effect of £6.32 (Band D) suggested in the technical note.
2. Revenue Support Grant (R.S.G.) and Standard Spending Assessment (S.S.A.) (See para 1.3 of Ceredigion County Council’s note)
The complexities of the local government revenue settlement clearly surface in the various comments and technical notes provided by Ceredigion County Council. However, the process of moving S.S.A., R.S.G., Non-domestic Rates and Council Tax base between the two authorities would be neutral within the Local Government Revenue Settlement. Based on the data used by Ceredigion i.e. S.S.A. (£200,000), Non-domestic rates (£52,000) and Council Tax Base (261) transferring between Ceredigion and Pembrokeshire, then this would result in revenue support grant changes taking place between the two Councils which would ensure that council tax for spending at S.S.A. remain exactly the same. It is, therefore, misleading to suggest that any boundary change would, by virtue of changes in the Local Government Revenue Settlement, cause any increase whatsoever in council tax levels.
3. Impact on Revenue Expenditure
The real issue highlighted in Ceredigion’s technical note is the impact that the proposed boundary would have on expenditure. The proposition put forward appears to suggest that S.S.A. (need to spend) would change by £200,000, but would only be offset by reductions in expenditure of £30,000. I foind this conclusion, (albeit qualified by Ceredigion), unrealistic. We estimate that the impact upon levies alone to be in the order of £20,000 per annum (i.e. fire authority/land drainage). As for other front line services, the real cost of delivering children and adult services, highway and municipal services, education transport etc., would be significantly towards the £200,000 figure highlighted within the S.S.A. calculation.
The assumptions used in the technical note are flawed and do not represent any realistic assessment of Ceredigion’s existing expenditure requirements for the area identified by the proposed boundary changed and Pembrokeshire’s need to replace such services at a realistic financial cost.
We do not accept the conclusions reached by Ceredigion County Council in this issue, particularly when under-scored by a number of serious shortcomings in basic data assumptions. If that Council reduced its expenditure by the same amount on the estimated S.S.A. reduction (£200,000), then Council Tax levels would change by some £0.60, (i.e. the impact of the change in tax base on excess expenditure over S.S.A.).
MARK LEWIS
Director of Finance