Finance Committee: Chairman’s report, October 2016

Councillor Alan Shepherd, Chairman of the Finance Committee, writes:

While there has not been a finance committee meeting since the last main ‘first Tuesday’ council meeting, there has still been plenty of activity.

The loan application to assist with the funding of the MUGA at the WSCC site has been submitted to WALC for checking and onward transmission to the Department for Communities and Local Government (DCLG) (who agree the borrowing powers for the council) and the Public Works Loan Board (who provide the final approval after detailed consideration and also the applicable loan documentation). At the time of preparing this report nothing has been heard although hopefully we will have a response shortly.

At the Finance Committee in August, the committee considered a comparison of the Council’s current Financial Regulations against the new Model Financial Regulations suggested by NALC. While some of the NALC wording was not relevant to WWPC, the committee did accept some amendments were appropriate given the changes in legislation and that WWPC now has a separate part time RFO. As councillors will see from your agenda there is a proposal to adopt the amended financial regulations.

Councillors will also have received (both by email and with your papers) copies of the DCLG consultation paper and WALC comments. While much related to business rates which do not affect parishes, as you will have seen there is a DCLG proposal that increases in the precept above certain thresholds by parish councils should be subject to a referendum. While the principal at section 2.1.2 (4th bullet point) would not apply to WWPC’s precept as it is below the total precept income threshold of £500,000, there is a proposal in section 3 (in particular 3.3.6 and questions 6 and 7 that the government is intending to remove (or at least reduce) these threshold such that the main consideration re referenda apply to all councils including parish councils.

Given this position I consider that the Council should respond to the consultation paper (direct to DCLG) via the Clerk raising objection to the proposals along the following grounds:

  • Councils who have entered into longer term projects / commitments in reliance upon raising the precept may not be able to adjust their financial position /precept level to meet the 2% maximum in a forthcoming year. A 2-3 year delay before implementation should be considered.
  • The costs of a referendum will be disproportionate to the proposed precept increase.
  • Contrary to the declared intent (section 1.2.1) to enable councils to make bold decisions, a cap of 2% could restrict councils in making long term investments in community infrastructure that would otherwise provide positive community and social benefits.
  • Councils can be affected by cost increases outside their control. E.g. If the tax based grant was removed their would automatically result in a 5.8% increase in our precept if all other expenditure did not change. Councils have no control over this.
  • Parish councils are already subject to regular elections which enable residents to hold councillors to account.
  • While objecting to the proposals we would strongly object to any proposals to lower the suggested thresholds which could impose unnecessary costs and reduce flexibility of parish councils to make bold decisions. Indeed any thresholds should increase in line with inflation plus the proposed cap level of 2%.