Written evidence submitted by Broadland District Council (BDC) and South Norfolk Council (SNC) [SRF 017]

About Broadland District Council

Broadland District Council covers an area of approximately 213 sq. miles to the North and East of Norwich. The district is split between rural areas, market towns and the urban fringe of the city of Norwich and, as the name suggests covers some of the Norfolk Broads which is a national park and considered to be an area of outstanding natural beauty.

The Council delivers services to approximately 130,579 residents (Source: ONS 2019).

The Council is made up of 47 councillors and the current composition is 33 Conservatives, 12 Liberal Democrats and 2 Labour.

Broadland District Council’s Band D Council tax for 2020/21 (excluding special expenses) is £125.52.

About South Norfolk Council

South Norfolk is a diverse district, home to approximately 130,000 people, equally divided between urban and rural locations. There are 88 towns and villages, including four Market Towns.

The Council is made up of 46 councillors and the current composition is 35 Conservatives, 10 Liberal Democrats and 1 Labour.

South Norfolk District Council’s Band D Council tax for 2020/21 (excluding special expenses) is £155.00.

Reason for Submitting Evidence

As local authorities, BDC and SNC will be directly affected by the Spending Review and wish to contribute to the debate.

Submission

The approach the Government should take to local government funding as part of the 2020 Spending Review and what the key features of that settlement should be.

We need a long term sustainable funding settlement than gives us the freedom to adapt and respond to the needs of our local community.

Ask	Justification
There should be no more reductions to the funding made available to districts.	Districts saw a 13.9 per cent real-terms reduction during the current spending period, bearing a disproportionate share of the local government reduction. Services are already extremely stretched at a time when demand is increasing.
Consideration should be given to devolving more powers to local authorities.	We are widely regarded as the most efficient part of the public sector, and have the ability to deliver efficient, responsive services at a local level. There is therefore the opportunity to build on this record of achievement, to deliver more integrated, more efficient, and more effective services.
New responsibilities should continue to be funded via s31 grants	The current agreement that additional s31 grants accompany any new responsibilities, has generally worked well and has provided vital resources to implement the new requirements. This agreement should therefore continue.
The Spending Review should cover at least a three-year period.	It is essential that we have as much certainty as possible to plan for a longer-term sustainable future, so that we can continue delivering quality, much needed services. We need to be able to plan over a medium term in order to invest in multi-year projects.
Additional freedom to set our own Council Tax rate	The current annual cap means that authorities are having to implement annual increases in order to protect their long term revenue base. For instance, a rise of £0, then £10 would not be permissible, whereas £5 then £5 is. As a democratically accountable body, our electorate should be the ultimate judge of our tax and spend proposals.
Remove the internal drainage board levies from the current council capping criteria. These levies should be treated as a totally separate precept from that of the local authority, in just the same way as county council, police and fire precepts are.	As drainage board fees are a levy, not a precept, increases in drainage board levies are not limited and district councils must pay them out of their budget. Given that council tax rates are restricted, above average increases in levies divert resources away from districts being able to provide essential services.
Ability to locally determine all exemptions and discounts for business rates and Council Tax	To provide flexibility to respond to local circumstances.
Ability to locally set planning and licencing fees	To enable full cost recovery and prevent taxpayers subsidising planning applicants.
Continuing support for the new homes bonus scheme.	This will ensure that we can continue to support and encourage housebuilding.
Continuing support for business rates retention scheme.	This will ensure that we can continue to support and encourage economic growth.
Review powers available to Councils to deal with business rates avoidance.	The powers available to local authorities need to be strengthened in order to deal more effectively with business rates avoidance.
Any changes to funding arrangements need to be phased in via a series of transitional relief measures.	This would prevent a financial cliff-edge and allow authorities to plan for changes over a number of years.
Review the housing benefit audit regime	The current housing benefit audit regime results in significant audit costs, with often only trivial adjustments. This does not represent value for money for the public purse.
Withdraw proposals to restrict borrowing through the Public Works Loans Board.	Any restrictions on access to borrowing will potentially limit our ability to invest in opportunities to support the economy and drive economic growth. In particular, preventing authorities aaccessing new PWLB loans if there is a purchase of an asset primarily for yield (however small) anywhere in a 3 year capital plan could prove very restrictive, and drive borrowing away from the PWLB.

Ask

Justification

There should be no more reductions to the funding made available to districts.

Districts saw a 13.9 per cent real-terms reduction during the current spending period, bearing a disproportionate share of the local government reduction.

Services are already extremely stretched at a time when demand is increasing.

Consideration should be given to devolving more powers to local authorities.

We are widely regarded as the most efficient part of the public sector, and have the ability to deliver efficient, responsive services at a local level.

There is therefore the opportunity to build on this record of achievement, to deliver more integrated, more efficient, and more effective services.

New responsibilities should continue to be funded via s31 grants

The current agreement that additional s31 grants accompany any new responsibilities, has generally worked well and has provided vital resources to implement the new requirements. This agreement should therefore continue.

The Spending Review should cover at least a three-year period.

It is essential that we have as much certainty as possible to plan for a longer-term sustainable future, so that we can continue delivering quality, much needed services.

We need to be able to plan over a medium term in order to invest in multi-year projects.

Additional freedom to set our own Council Tax rate

The current annual cap means that authorities are having to implement annual increases in order to protect their long term revenue base.

For instance, a rise of £0, then £10 would not be permissible, whereas £5 then £5 is.

As a democratically accountable body, our electorate should be the ultimate judge of our tax and spend proposals.

Remove the internal drainage board levies from the current council capping criteria.

These levies should be treated as a totally separate precept from that of the local authority, in just the same way as county council, police and fire precepts are.

As drainage board fees are a levy, not a precept, increases in drainage board levies are not limited and district councils must pay them out of their budget.

Given that council tax rates are restricted, above average increases in levies divert resources away from districts being able to provide essential services.

Ability to locally determine all exemptions and discounts for business rates and Council Tax

To provide flexibility to respond to local circumstances.

Ability to locally set planning and licencing fees

To enable full cost recovery and prevent taxpayers subsidising planning applicants.

Continuing support for the new homes bonus scheme.

This will ensure that we can continue to support and encourage housebuilding.

Continuing support for business rates retention scheme.

This will ensure that we can continue to support and encourage economic growth.

Review powers available to Councils to deal with business rates avoidance.

The powers available to local authorities need to be strengthened in order to deal more effectively with business rates avoidance.

Any changes to funding arrangements need to be phased in via a series of transitional relief measures.

This would prevent a financial cliff-edge and allow authorities to plan for changes over a number of years.

Review the housing benefit audit regime

The current housing benefit audit regime results in significant audit costs, with often only trivial adjustments. This does not represent value for money for the public purse.

Withdraw proposals to restrict borrowing through the Public Works Loans Board.

Any restrictions on access to borrowing will potentially limit our ability to invest in opportunities to support the economy and drive economic growth.

In particular, preventing authorities aaccessing new PWLB loans if there is a purchase of an asset primarily for yield (however small) anywhere in a 3 year capital plan could prove very restrictive, and drive borrowing away from the PWLB.

The current financial situation of councils, how this has affected their ability to deliver services and the demand for services, including Adult Social Care.

Our finances are already stretched from a decade of Government funding restraint. We have responded to this by:

Growing our economy, and thus benefiting from business rates retention
Encouraging new homes, and thus benefiting from new home bonus.
Forming a single officer team serving both Broadland District Council and South Norfolk Council, in order to deliver over £8.6m in savings.
Being commercially focused and investing in profitable local authority controlled companies.

However, we still face a significant funding gap in our medium term financial plans. To address this funding gap will require us to continue to be innovative and build on our success to date.

A key risk for us is the uncertainty regarding business rates retention and new homes bonus. Cuts to either of these schemes could result in funding reductions of over 20%. This would be unsustainable and would result in a fundamental reduction in our ability to deliver our statutory services.

The current lack of certainty over the future of new homes bonus and business rates retention is also requiring us to re-evaluate investment opportunities.

We therefore ask for the Government to continue to support both the new homes bonus scheme and the business rates retention scheme.

What the financial challenges facing councils are as a result of the COVID-19 pandemic, including lost income and local tax losses.

We have stepped up to the challenges posed by the Covid-19 pandemic. For instance:

We have kept essential services such as refuse collection and planning going throughout.
We have taken on new responsibilities and supported the national effort to protect the shielded and vulnerable.
Our environmental health team has been instrumental in ensuring Covid-19 safe premises and public spaces.
Our economic development team have brought forward adaptations and longer-term investment strategies for adapting our high streets.
We have delivered all the Business Grants schemes quickly and efficiently.
We have provided financial support to residents via hardship payments.

In order to do this, we have redeployed our human and financial resources as required.

The funding provided by Government to date has been welcome. However, we need a commitment that all additional costs and income losses incurred as a result of Covid-19 during both 2020/21 and 2021/22 will be reimbursed.

Without this commitment we will have no choice but to review our spending priorities and find compensating savings. This would detrimentally impact on our ability to deliver services at a time when local residents and local businesses need our support to rebuild their lives and our economy.

Furthermore, in reality we need to expand our support offering to prevent a cohort of our population seeing a permanent reduction in their life chances.

There are also opportunities to build on our successes. Community engagement has increased, and improved support is being provided to homeless families. If funding is not maintained, then these improvements will be lost.

What the impact is of another one-year spending review and a further delay to a multi-year settlement and the Fair Funding Review.

Whilst understandable that the current pandemic has delaying a multi-year settlement and the Fair Funding Review, this leaves local government finances in limbo.

Without a long term sustainable funding settlement than gives us the freedom to adapt and respond to the needs of our local community, we are unable to develop a robust long term financial plan.

Ultimately this reduces our ability to invest longer term to deliver better services for our communities.

November 2020