Memorandum by Westminster City Council
(LGB 22)
1. CAPITAL FINANCE
Westminster City Council's View
Westminster City Council warmly welcomes the
capital finance proposals. The City Council has for some time
argued for local authorities to be given greater freedom to borrow
to finance capital expenditure, where they can afford it. These
proposals would deliver this freedom and are in line with the
ongoing dialogue between the government, the local government
associations, CIPFA and others about a new system of capital finance.
Westminster City Council also supports the development of a CIPFA
Prudential Code for Capital Finance in local authorities, which
will underpin the proposals. However the Secretary of State will
have wide powers to make new regulations and orders and this brings
as always the risk of undue prescription developing in secondary
legislation. The draft Bill also gives the Secretary of State
powers to re-introduce many aspects of the current control regime.
The City Council is concerned by the fact that
the Bill does not include clear indications of what form Government
support for capital investment will take and how the affordability
of borrowing will be judged.
The new local freedoms could be constrained
by the proposed measures to deliver government support via revenue
and capital grant.
The City Council regrets the fact that there
is no indication of any changes to the regulatory control on local
authority controlled companies.
2. FINANCIAL
ADMINISTRATION
Westminster City Council's View
With the exception of the easing of the section
114 regime, which is welcome, the City Council considers that
these provisions are unnecessary. Westminster City Council is
not convinced that there is a need for new statutory powers to
specify the level of local authorities' reserves or to monitor
budgets. The change in date for accounts closure has not been
included in the draft Bill.
3. FORMULA GRANT
Westminster City Council's View
The City Council is opposed to this proposal
as it does not add to transparency. The Council believes that
the separate identification of NNDR is important, particularly
in the context of a local council's discussions with its business
community.
Westminster City Council believes that the localisation
of the business rate is a favoured way to address the balance
of funding and we feel that this proposal takes us further away
from this objective.
4. BUSINESS IMPROVEMENT
DISTRICTS
Westminster City Council's View
Westminster City Council believes that BIDs
are a useful development to finance town and city centre improvement.
Our experience in partnering the private sector jointly to fund
such improvements shows that it is the land owners, not the occupiers,
who are more willing to contribute.
The Bill and other supporting legislation should
make their engagement in BIDs explicit, together with the role
of residents.
Given the City's experience of the SRB funded
BIDs in Central London it is clear that the effectiveness of any
BID will depend on the detail of the forthcoming legislation and
of the supplementary guidance on various technical issues. These
matters should include the operation of the BID and the practical
involvement of residents and businesses in their origin and development.
5. NON-DOMESTIC
RATES
Westminster City Council's View
The City Council welcomes the proposal for rate
relief for small businesses for which we have lobbied for several
years.
6. COUNCIL TAX
Westminster City Council's View
Westminster City Council welcomes the proposed
changes to the council tax. The City Council has long argued that
the success of the council tax depends on it being seen as a fair
tax. For this to be achieved, it must be kept up to date. There
have been considerable changes in relative property values since
1991 when the existing council tax bands were set and we support
the intention to hold a new revaluation in 2005 and regular revaluations
thereafter.
The City Council also believes that to improve
the fairness of the council tax and enhance its long-term stability
the number of council tax bands and the ratios between them should
be reviewed, and consideration should also be given to the introduction
of a system of regional banding for the council tax.
The City Council welcomes the fact that the
legislative basis of the council tax benefit subsidy limitation
scheme, under which local taxpayers had to meet the additional
costs in benefits of council tax rises above a certain threshold,
will be abolished.
The City Council is disappointed that there
is no reference to the proposal to give local authorities discretion
to remove the council tax discount for second homes and to retain
the proceeds for local use and would hope that it will be included
in the final version of the bill.
7. HOUSING FINANCE
Westminster City Council's View
The City Council has always strongly opposed
the inclusion of rent rebates within the HRA and therefore welcomes
the fact that legislation is finally being introduced to permit
this. It will also simplify the procedure for paying housing benefit
subsidy to local authorities in England since the responsibility
is currently shared between ODPM and DWP and it will enable the
National Assembly for Wales to exercise the powers in relation
to Wales.
8. POWERS TO
CHARGE AND
TRADE
Westminster City Council's View
The City Council is supportive of the new generic
power to charge for discretionary services. However, the Council
considers that the statutory provision should not be subject to
regulations as is now proposed. The previous charging powers in
section 150 of Local Government and Housing Act 1989 were never
effectively used because of the need for regulations to be made
to bring into force those charging powers, and more importantly
there is no need to have regulations limiting the amount that
can be charged for discretionary services. As charges will relate
to discretionary services the person to whom the services are
made available or provided will have the choice as to whether
to use those services and whether he wishes to pay the proposed
charge for those services. This will provide a far more effective
control mechanism than any regulations made by the Secretary of
State.
If a service does not have to be provided at
all there is no logical reason for a limitation to be placed on
a charge for providing that service.
The Government consulted last year on proposals
to extend powers to trade through an order under Section 16 of
the Local Government Act 1999. No order has yet been laid, in
part because the limitations of Section 16 have frustrated progress
on some of the proposals.
The City Council welcomes the fact that this
clause improves on section 16 by conferring wider powers to permit
trading, and making orders under this power subject to the negative
resolution procedure, which is much less lengthy and cumbersome
than the procedure for orders under Section 16.
9. PERFORMANCE
CATEGORIES AND
BEST VALUE
Westminster City Council's View
There is a certain amount of frustration at
the relative lack of progress in making promised freedoms and
flexibilities available to councils. The important thing now will
be to identify additional worthwhile freedoms and make them available
for councils to use.
The City Council opposes the classification
of authorities through CPA. This is an unnecessary scheme and
the City Council will ask the Government to reconsider the introduction
of the scheme.
It is noted that the draft Bill does not increase
any provisions to streamline the Best Value regime.
10. LOCAL POLLS
The Bill confirms councils' power to conduct
an advisory poll (or referendum) on matters relating to the services
for which the council is responsible or the finance it commits
to those services.
The City Council welcomes this clarification—as
far as it goes. Local referenda can be a useful mechanism for
councils (in pursuing their role as community leaders) to promote
local debate or gauge local feeling on important matters affecting
the well-being of the local community. It is disappointing that,
having taken this opportunity to clarify a council's powers to
conduct advisory polls, the proposal does not extend to these
wider circumstances.
11. GREATER LONDON
AUTHORITY (GLA)
The Bill highlights that there are unresolved
issues on the detailed application of the proposals to the GLA.
These issues need to be urgently addressed.
12. NEW POWERS
FOR THE
SECRETARY OF
STATE
The City Council is concerned that the Secretary
of State will be given new and wide ranging powers under the draft
Bill.
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