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 7 SUMMARY OF REPORT BY RITA HALE COMMISSIONED BY THE LOCAL GOVERNMENT BOUNDARY COMMISSION FOR WALES

Background

1. We understand that the Boundary Commission is undertaking a review of part of the boundary between the counties of Ceredigion and Pembrokeshire, in the area of the community of St Dogmaels.

2. We have seen:-

the Commission’s draft proposals; and
the responses to those proposals submitted by St Dogmaels Community Council; Ceredigion County Council and Pembrokeshire County Council.

3. We were asked to review the facts and assumptions in the paper produced by Ceredigion County Council on the likely financial effects of the proposed boundary change.

4. The approach we adopted is described in detail in the main report.

Issues Raised by the Study

5. We raised questions about the number of people who live in the review area. The County Council’s assessment of the likely effect of the Boundary Commission’s proposals is based on the assumption that 400 people live in the area, but we were told in August 2001 that the number of people living in the area could be as few as 304. We have no way of knowing which of these estimates is the more accurate, but the assumption about the number of people likely to be affected by the proposed boundary change is likely to have a material effect on the results of the financial appraisal of the Commission’s proposals. Accordingly, we tested the sensitivity of the analyses to the assumption made about the number of people living in the area. We considered the likely effect on the Council Tax levels in Ceredigion and Pembrokeshire if:-

300 people, or about 0.42% of Ceredigion’s population, would be affected by the proposed boundary change; or
400 people, or about 0.56% of Ceredigion’s population, would be affected by the proposed boundary change.

6. We raised questions also about the number of domestic properties in the review area – and the valuation of those properties for Council Tax purposes.

The County Council’s papers appear to suggest that there are 129 domestic properties in the review area with a gross value for Council Tax purposes of 261 Band D equivalents. This implies that each of the properties in the review area has a value of slightly more than 2 Band D equivalents. The highest Council Tax Band is Band H – and properties in Band H have a value of 2 Band D equivalents. So the County Council’s figures appear to imply that the domestic properties in the review area have values beyond the upper end of the value range.

7. We have no way of establishing how many domestic properties are in the review area – and how these have been valued for Council Tax purposes. However, we believe that it should be possible for the County Council to establish precisely which properties would be affected by the proposed boundary change and how they have been valued for Council Tax purposes.

Key Issues

8. We took the view that the key issues for the study are:

the differential, if any, between the changes in the county councils’ SSAs and the changes in their expenditure which would flow from the proposed boundary change; and
the effect of any differential on the level of the two county councils’ Council Taxes following the boundary change.

Changes in Spending Levels

9. We understand that the County Council estimated that its own spending would fall by about £30,000 if the proposed boundary change were to proceed – ie:-

road maintenance – down by £10,000;
refuse collection – down by £10,000; and
social and environmental services – down by £10,000.

10. We are unable to confirm the reasonableness of the County Council’s figures, but we accept that they are the County Council’s best estimates of the effects of the proposed boundary change on its spending on its own services. However, we believe that in addition to the savings on its own services the County Council would also pay a reduced levy to the Mid and West Wales Fire Authority if the proposed boundary change were to go ahead. We estimate that, based on the figures for 2001-02, the County Council’s levy payments would fall by:

about £11,500 if the boundary review affected about 300 people - and Pembrokeshire’s levy payment would rise by the same amount;
about £15,300 if the boundary review affected about 400 people - and Pembrokeshire’s levy payment would rise by the same amount.

Accordingly, we believe that Ceredigion might save slightly more than £30,000 if the boundary change were to go ahead – and Pembrokeshire might inherit slightly more than £30,000 of expenditure following the proposed boundary change.

Changes in SSAs

11. We concluded that the scale of the change in the County Council’s SSA would be sensitive to the number of people living in the review area – and that Ceredigion’s SSA might fall by about £150,000 if about 300 people live in the review area, or by about £200,000 if about 400 people live in the review area, the figure estimated by Ceredigion County Council.

The Differential between the Change in Spending and the Change in SSA

12. We concluded that the differential between the change in the Council’s budgets and the changes in their SSAs as a result of the boundary change could be quite wide – eg:-

if about 300 people live in the area, the difference could be of the order of £109,000 – ie the difference between an SSA change of about £150,000 and a budget change of £41,000; or
if about 400 people live in the area, the difference could be of the order of £155,000 – ie the difference between an SSA change of about £200,000 and a budget change of £45,000.

The Likely Effect of the Boundary Change on Council Tax Levels

13. We tested two different approaches to the calculation of the likely effects of the proposed boundary change on Council Tax levels in Ceredigion and Pembrokeshire – ie the approach adopted by Ceredigion County Council and an alternative approach to the calculations, which follows the usual procedure for calculating local authorities’ Revenue Support Grant; and uses the data used by the National Assembly for Wales in the grant distribution calculations.

14. We believe that the alternative approach which we tested is likely to produce a more realistic assessment of the likely effects of the proposed boundary change on the distribution of the Revenue Support Grant and the income from the National Non-Domestic Rate Pool – and thus of the likely effect of the proposed boundary change for Council Taxpayers in Ceredigion and Pembrokeshire.

15. We need to stress that because we were unable to obtain:-

detailed data on the composition of the SSAs for 2001-02; and
any data on the characteristics of the people living in the review area;

the figures we have produced can only be indicative. However, we believe that they are the best estimates which could be produced given how few data are available.

16. The results of the tests we carried out lead us to conclude in relation to Ceredigion that:-

the County Council’s Council Tax would be likely to rise if the proposed boundary review were to proceed;
the scale of the increase would probably be smaller if about 400 people live in the review area than if fewer – ie about 300 people – live in the area; and
the Council Tax increase could be of the order of £5 per Band D property if about 300 people live in the area, but only slightly more than £1 per Band D property if about 400 people live in the area.

17. We concluded, in relation to Pembrokeshire, that:-

the County Council’s Council Tax would probably fall if the boundary review were to proceed;
the cut in the Council Tax would probably be bigger if 400 people live in the review area than if 300 people live in the area; and
the cut could be about £2 per Band D property if about 300 people live in the area, or about £3 per Band D property if about 400 people live in the area.

18. Our overall assessment is that if the boundary review were to go ahead, the difference between the increase in the Council Tax for Ceredigion and the cut in the Council Tax for Pembrokeshire would probably be less marked than the figures set out in Ceredigion’s response to the Commission’s proposals suggest.

19. We are unable to comment on the likely implications of the proposed boundary change for Cardigan Town Council because we have no way of assessing whether or not the proposed boundary change would have any effect on the Town Council’s spending.