The argument for Ispwich retaining is council-owned bus company (one of only 11 remaining in the country) is well put by Alasdair Ross in his blog today. He cites Hartlepool which sold its municipal bus company and now has no buses after 6pm in the week and no weekend services.
The idea that reports of the death of Suffolk County Council’s New Strategic Direction were greatly exaggerated is gaining ground. The language has changed but services are still be moved out of the council’s direct control at a pace.
And this afternoon Mark Valladares, a leading Lib Dem blogger who live near Stowmarket, posted his view under the heading, Suffolk’s New Strategic Disguise: if at first you don’t succeed…
…you may be able to make a Conservative stop, but you can’t necessarily make them think. And the same people who either thought that the New Strategic Direction was a good thing, or were too feckless to question it, have now concluded that, for all intents and purposes, a somewhat pared back version is still fit for purpose.
So, what are they up to now?…
That is what we would like to know. NSD Mark II or the Stealth model?
Note: I read what I expected on Mark Valladares blog. His heading has been corrected above by changing “Direction” to “Disguise”.
Twin Suffolk district councils Babergh and Mid Suffolk took council tax decisions yesterday which set them on different tracks.
Babergh decided to increase its council tax by 3.5% while Mid Suffolk chose to freeze its demands after a lively debate. Babergh has no overall political control and Mid Suffolk has a Conservative majority.
Last year a referendum on a full merger of the councils was lost (a majority of Babergh voters were against). But the integration (we have had joint refuse collections for some time) of services and administration goes ahead.
So both councils had similar advice on which to base their decisions. After a strong debate, Mid Suffolk decided to take community secretary Eric Pickles’s shilling.
The government has offered a one off grant, equivalent to a 2.5 per cent tax rise, this year to councils that freeze their demands. That means that a 3.5 increase results in a 1 per cent rise in spending power.
And any rise of more than 3.5 percent would trigger a costly referendum.
A report from the joint management board to the Executive Committee of Mid Suffolk in January suggested that accepting the Government’s offer could result could higher rises in the future.
Like all local government finance it is a complicated issue, but that report puts the issues as clearly as as I have seen anywhere. Here is the relevant section (full report):
• Earlier in the year, the Government announced its intention to offer local authorities a grant to enable council tax to be frozen again in 2012/13. The grant will again be equivalent to a 2.5% increase in council tax but will only be a one-off (whereas the 2011/12 grant is for 4 years).
• Unlike 2011/12, not all councils are likely to take the grant due to the ‘knock on’ financial implications in future years of only receiving a one-off grant. Although the main options appear to be to either take the grant or increase Council Tax by 2.5% (or slightly more), it is important to understand the impacts in future years of different percentage increases in 2012/13. A further announcement has been made that any Council Tax increase of more than 3.5% will be subject to a local referendum.
• A 2.5% increase equates to £3.78 a year for a Band D property (3.5% = £5.29). If the one-off Government funding is accepted, that will have the same overall impact on the 2012/13 budget as a 2.5% Council Tax increase.
The reasons for having a Council Tax increase in 2012/13 and not accepting the Government’s grant of £136,000 are as follows:
• As the Government grant is a one-off, that amount would then have to be added to the savings that are required in 2013/14
• A 2.5% increase in Council Tax just to stand still in 2013/14 would then be needed
• A 5% Council Tax increase would be needed in 2013/14 or subsequent years to ‘catch up’, but this would be subject to a local referendum, which would be costly
• Not increasing the Council Tax by 2.5% in 2012/13 would mean that there is a lower tax base for future years and the £136,000 is lost each and every year in the future – unless that can be recouped through higher than normal increases in subsequent years, either as indicated above or by gradual year-on-year phased increases e.g. of around 0.8% a year over 3 years.
Suffolk County Council and Suffolk Coastal District Council have also decided to freeze their taxes. But every council tax payer in the county faces increases because the police authority precept is increasing by 3.75 per cent and many town and parish councils are pushing up their shares (average rises of nearly 4 per cent in Mid Suffolk).
Suffolk County Council has embarked of a tax avoidance scheme which will cost central government revenues more than £300,000 a year.
The avoidance of business rates is at the heart of the plan to save money by handing libraries over to an Industrial Provident Society in April.
Last month the Prime Minister, David Cameron, promised a tougher approach to businesses and individuals avoiding tax by using fancy lawyers (BBC).
The report on which Suffolk County council based its decision to pass the running of libraries on to an independent IPS says it will cost less than a directly run service for two reasons: the 80% rebate on business rates for charities, and lower corporate overheads.
According to the report business rates in the current financial year are £381,750, which means that a little over £300,000 will be saved.
This is tax which is collected by district and borough councils on behalf of the government and goes into the pool from which local authorities get grants from Whitehall.
So while there is an advantage for Suffolk county council, the overall national effect is neutral.
But the system of distributing business rates is changing and the libraries report identified a risk in the Government’s plans to reform its distribution. It said:
A significant proportion of the identified savings would come from business rate relief due to the charitable status of the IPS. There is a risk that after 2013/14 these business rate savings will become cost neutral to local councils depending on the outcome of the Government review on local retention of business rates. The proposals on this review are currently not clear whether charitable rate relief would be reimbursed by Government to local authorities or not.
Just before Christmas the Communities Department announced more detailed plans for reforming business rates which have become one of the most centralised local tax systems in the world.
A press release said:
The reforms will establish a direct link between the effort that councils put into growing local economies, supporting jobs and infrastructure and the amount of money that they have to spend on local services and local people.
Council tax payers and business rate payers stand to benefit from additional income that rate retention could bring authorities, through better services and more investment.
Charity relief will remain.
At best the libraries scheme is taking money out of a national pocket and putting into a local one. But it remains a way of avoiding paying tax and the long-term effect on the county remains unclear.
The complex impact on shire counties of the current business rate reforms has been examined by Simon Parker, director of the New Local Government Network, for the Municipal Journal.
News that Hinchingbrooke Hospital in Cambridgeshire is to be run by a private company which has been given a ten year contract, sets me wondering again about the terms being offered to run libraries in Suffolk.
On Tuesday at the County council cabinet we heard that the funding on offer to charitable organisations set up to run local libraries was guaranteed for only two years.
Forget the difference in scale and the politics, there is a basic business planning issue here. With ten years of funding, no doubt under a very complicated contract, it possible to make a committment.
With only two years of funding (we are still waithing for details) I am finding it very difficult to envisage any business plan that I could be a part of recommending to the community here in Debenham.
Thanks to the reader who pointed out the literal in the headline. I had “jlibraries”. Goes to show how much I need a proof reader.
Suffolk County Council leader Mark Bee pledges that his council will not increase its taxes next year in an interview published on the front page of the East Anglian Daily Times today.
He heard the grant from central government would increase by 2.5 per cent provided he did not raise council tax. In other words, Suffolk would have to increase council tax by a huge amount to produce even a tiny increase in income from it.
I feel sorry for people like Mr Bee who go into local government because they want to make a difference but find themselves puppets of central government. They are in the business of “local management” rather than “local government”.
They are so dependent on central government funding that their job is not to provide a vision which their electors are prepared to pay for, but to work out the least damaging way of implementing central policy.
The indications from today’s story in the EADT are that Suffolk is looking at how to make the best of of an unpleasant task, cutting £53m from county spending.
The concentration on cutting back management and the the fixed costs of property to protect, so far as they can, frontline services is welcome. It is also a time to look in every pocket in the wardrobe for money which can be used help pay for services.
The Treasury announcement that the government would find £805m to “persuade” councils not to increase tax is here.
James Hargrave has also picked up on the this topic saying: “We may just as well disband the County Council and save some money. It doesn’t even have the power to make meaningful local decisions (even if it wanted to).”
I am not sure I would go quite that far. But we do need to free local government from the shackles of Whitehall.
James also looks at the matter of democratic debate which I considered yesterday. He was not at Tuesday’s cabinet meeting but writes:
I have however attended previous Cabinet meetings and they are truly depressing for anyone who believes in democracy. Almost every decision is unanimous and there is nothing that would pass for real debate. “Self-congratulatory” is the word almost everyone used of the proceedings.
I guarantee you that your local parish council, village hall management committee, school governing body, cricket club you name it would be a much better place to look for democracy than Suffolk County Council’s cabinet.
He puts much of the blame on Labour’s move to cabinet government which, in the absence of opposition, is fundamentally undemocratic.
I also wonder whether modern photocopiers should take some of the blame. The papers I took away (there were more) from cabinet weighted 570g (1.25lb). It is not surprising that many councillors appear not to have read all the documents.
Providing all the information available has long been the bureaucrats way of protecting their backs. I welcome the depth of information available but it is time for the council to move to all electronic delivery with summaries hyperlinking to source material.
It would save a lot of trees too.
It was hard to hear much of Suffolk County Council cabinet meeting yesterday because the sound equipment was badly adjusted. Twice a technician had to be called from some distant part of Endeavour House. And the battery in the roving mic used for questions from the public and backbenchers went flat: someone had to go in search of a new battery.
I could not help wondering why, if the council could not organise such things better, we should trust them with the decisions they were to make. Having a technician on hand at the start of a meeting and a spare battery in a pocket is so standard it should not need a formal risk assessment.
Yet it hardly mattered as the sound of rubber stamps being inked was clear as they started talking about the future of libraries.
Some things would have been better left unheard. Judy Terry, the cabinet member responsible for libraries, told us that 5% of £6m was £100,000. Pity they were not talking about the standards of maths in the community.
I thought I must have misheard her, but afterwards others confirmed they had heard the same. And the East Anglian Daily Times this morning reports (this paragraph is not in the online story) the county council will “finance 95 per cent of the cost of running local libraries, but the final 5% should be raised locally”.
Reading the papers (162 pages of them about libraries) it is clear that individual libraries will be required to raise 5% of what is called “direct costs”. That does give us the £100,000 figure. The total budget for the slimmed down library service is a bit over £6.5 million.
The rubber stamp was applied to the creation of a co-operative to run libraries, rather than a slimmed down in-house service or a company wholly owned by the council on the grounds that it would save most money and would best meet the localism policy.
It hardly mattered that no mention was made of a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis which identified a weakness of community governance as: “Lack of direct democratic mandate for local library organisations (unless part of parish/town councils).”
Democracy in action did not seem very attractive in the Elizabeth Room of Endeavour House yesterday morning.
The scrutiny committee had looked at some of the issues before the meeting and came up with ten recommendations. The report to the cabinet said the majority of the scrutiny committee recommendations had been acted upon. Unfortunately it not say which had been ignored.
The only time the meeting (it would be misrepresentation to call it a debate) showed a spark of life was when Sandy Martin, the Labour leader asked a question of the cabinet. He wanted to know what they were doing about the scrutiny recommendation that,”any claims on secondary taxation from Parish, Town, District or Borough Councils be carried out on an equitable basis across Suffolk”.
The reaction to this in the cabinet papers is: “The reference module, and the financial modelling in the Evaluation do not presuppose secondary taxation.”
Ms Terry elaborated saying that any secondary taxation would be voluntary. I don’t think she was suggesting that council tax payers could withhold a part of their payments if their local council decided to support their library.
The most amazing thing was that no mention was made of the overall recommendations of the the 121 page Best Value Evaluation Report. These were:
- Options 1 and 3 [slimmed down in-house service and a cooperative] are both considered as serious contenders for the future delivery of library services with the deciding factors being the risk appetite of the County Council and the level of commitment to community governance.
- The next phase of the work should include an in-depth review of the risks identified in both the community governance model and the selected structural delivery model in order to ensure that mitigation can be put in place to minimise the impact of risks identified in the adopted approach.
The decision was simply to adopt the co-operative model (an Industrial and Provident Society), without the recommended in-depth review of both approaches. It is subject to endorsement by the full council in December.
Members of the business development team who have clearly worked very hard on the the best value report must be wondering why they are employed by the council.
It is a relief that there is no threat to closure of any of the county’s 44 libraries but confidence in the plans needs the full examination of the risks identified by the business development team.
Deborah Cadman, Suffolk County Council’s new chief executive, will be paid £155,000 a year, a very modest rise on her current salary at the East of England Development Agency.
She will probably count herself fortunate to have made even a small increase as her job as chief executive of the agency disappears in March next year as it is closed down as part of the Government’s cuts.
Her pay including a bonus at the EEDA (annual report) for last finical year was £151,000 plus other benefits worth £3,000 a year. There will be no bonus nor automatic annual rises in the Suffolk job.
It is an appointment which sends a signal that SCC which avoided the costs of head hunters is determined to be very careful with salaries from now on. It will even have a national importance as a sign that the executive salaries arms race is over in local government.
She was chosen from a shortlist of four candidates by an appointments board headed by Mark Bee, the council leader, with two of his Conservative colleagues and the Lib Dem and Labour leaders, Kathy Pollard and Sandy Martin.
So it was surprising to read in the press releasethat:
Deborah will also be responsible for leading the redesign of the way the council works, protecting frontline services and keeping council tax down – all priorities for the Conservative administration at Endeavour House.
Why did they make this party political point when the opposition leaders would surely share these objectives? Deleting the word “Conservative” would have made the appointment appear fully consensual. That is, unless the appointment board was divided.
Ms Cadman’s salary is £63,592 less than that of the former chief executive Andrea Hill and will substantial reduce the differential between highest and lowest paid employees.
The announcement of Ms Cadman’s appointment lists her challenges as:
- Reducing the cost of senior management at Suffolk County Council
- Working in partnership with other councils, businesses, the third sector and local community groups
- Reducing the number and cost of public buildings in Suffolk
- Dealing with increasing demand for council services
- Delivering Suffolk’s ambitious broadband programme
- Continuing the council’s openness, transparency and listening agenda whilst finding local, practical, solutions to community issues.
Before joining EEDA she was chief executive of St Edmondsbury Borough Council for six years. He start date at Suffolk has yet to be agreed but there will no doubt be an arrangement which will allow her to become involved at the county council very quickly.
Update: I am pleased to learn, from Lib Dem Caroline Page, that the decision of the appointments board was unanimous.
Will the mystery candidate from a short-list of four emerge as the new chief executive of Suffolk County Council tomorrow (Wed, Oct 19)? Three of the candidates to be interviewed are publicly known (BBC) but one is not and is from outside the county.
Lucy Robinson, who has been the interim chief executive since the departure of andrea Hill, is the in-house candidate. Her substantive job is director of economy, skills and the environment.
Deborah Cadman is head of the East of England Development Agency which is to be closed early next year. She was previously chief executive of St Edmundsbury Borough Council.
Stephen Baker is chief executive of Suffolk Coastal and Waveney District Councils who share a senior management team. He started working in local government in 1982 at Ipswich Borough Council.
The fourth candidate to be interviewed at Ipswich Town football ground tomorrow has not been revealed.
The appointments board’s decision may not be revealed immediately after its meeting at 6.30pm if the chosen person needs to inform his or her current employer first.
Mark Bee the council leader will chair the board along with two other Conservatives and the Lib Dem and Labour leaders, Kathy Pollard and Sandy Martin.
I feel sure they will be determined to reach a consensus decision to avoid the political issues which surrounded the appointment of Andrea Hill and her £218,000 a year salary.
We know the new chief executive will get about £160,000 a year. The whole appointment process has been conducted with careful eye on avoiding extravagance. No head hunters or consultants have been used.
Not only has this saved money but has sent a signal to the county staff that they are trusted to do the work themselves.
They whole process seems to have been designed to demonstrate that the council, under the new leadership of Mark Bee, has changed.
The new chief executive will mark a significant reduction in pay differentials. Andrea Hill was paid 18 times the national minimum wage. The new chief executive will earn 13 times more than someone on the minimum wage.
It does look as if Suffolk County Council has heeded the words of Will Hutton in his report on fair pay in the public sector earlier this year:
… some public sector executive pay has been rising for reasons no less opaque than in the private sector with little attendant rationale. There are anomalies and, before the current pay freeze , signs that in the more autonomous parts of the public sector the arms race effects in CEO private sector pay were being reproduced – albeit less markedly. And of course, at the taxpayer’s expense. The public has the right to know that pay is deserved, fair, under control and designed to drive improving public sector performance – and that there are no rewards for failure.