Council Leader calls for changes to local authority funding
Conservative Council Leader Jean Pearson is calling for a change to the way in which central government funds Mole Valley.
Says Jean:-
"At present we have a ridiculously convoluted system. We gather in business rates, pay it over to the government and then they give some of it back through a complex process. This cannot be right. Much of what Business Rate payers pay in Surrey goes up North and we have no means of checking how our share is calculated."
Jean suggests a new independent body, which would be free from political interference and would give councils the funding they require for the services they need to provide. This would ensure that each council can offer the same level of service to their residents as each other – standardising each authority’s ability to meet the needs of its residents.
Mole Valley collects Council Tax from households and pays some to the County, some to the police and the rest to itself: the Government is not involved except that it limits the the percentage increase rise to 5% irrespective of the starting rate. Mole Valley’s council tax rate is lower than most)
The NNDR (National Non Domestic Rates or Businesses rates) are collected at a rate in the pound set by the Government and upgraded by the Retail Price Index each year. This is paid to the Government who then pay some of it back to the County, the Police and Mole Valley. They also pay a very small amount from central Government taxation as the Revenue Support Grant (RSG). These payments of NNDR and RSG to each Council etc are meant to be based on the level of need in each area and the amount of resource in each area i.e. the amount of Council Tax which can be collected from the Council Tax payers.
Thus up north where the needs are assessed as high and the resource low (many of the houses are Band A as opposed to Bands G and H here). So northern councils get a large amount of NNDR and RSG.
The result is that some 60% of the NNDR collected in Surrey leaves the County. The allocation has been changed and it now seems to be arbitary. When it started off there were formulae which could be checked.
Surrey County Council’s leader, Nick Skellett has already made the same suggestion. He aired his ideas for more equitable funding and fairer social care charging at a Question Time debate organised by Surrey County Council and moderated by TV journalist Nicholas Owen that focused on the growing demand for adult social care. Mr Skellett told a capacity audience of 180 at the University of Surrey:-
"The county council is spending £332 million of its £643 million budget on social care – approaching 52 per cent – and this is increasing year by year. In this year's budget, nearly 90 per cent of the extra funding allocated to the council's services went into social care. Residents have to pay for these increases as council tax provides over 80 per cent of the council's expenditure compared with the average for English councils of 45 per cent.
The Government gives Surrey residents £205 funding per person for vital local government services, which is way below the national average of £595, and the funding for Manchester of £855. The impact of this and poor grant means there is a funding gap in social care of up to £15 million per year.
Surrey residents and businesses contribute £12.9 billion in taxes to the Exchequer but receive back only £7.4 billion in benefits and grants to public services."
Malcolm Johnson – Communications Officer – Conservative Group of Councillors for Mole Valley
26th September 2008