Agenda item

Clive Jones asked the Executive Member for Economic Development and Finance the following question:

Minutes:

 

Question

You are running a Conservative Council under a Conservative Government. What is your answer for residents who want to know why Wokingham has still got such a poor deal as the worst funded unitary authority in the country? 

 

Answer

The simple answer is that we are too wealthy and too white and therefore in the econometric model we do not do so well.  But the official answer is, as you are aware, the Government has a responsibility to stabilise the dire financial situation they inherited many years ago from the Labour Government, which has been compounded by numerous international and global events over more recent times. Local Government must play its part in the Government’s austerity measures and this Council is not immune from this. Indeed, we have financially managed our way through £36.5m worth of efficiency savings since 2011/12.

 

I agree that WBC does get a poor funding deal, compared with other authorities, which is as a result of a national funding model that has a strong bias to those areas considered to be less wealthy and less healthy than us. The more recent funding formula compounds this issue by bringing our council tax receipts into the grant reduction calculation. Council tax being an element of income we have had to increasingly rely upon as our general grant has reduced over the years to almost nothing. We are unfortunately bound, in the same way as all other local authorities, to a national funding formula and so our room for manoeuver and getting a better deal from the Government is often limited.

 

WBC is only one voice amongst the 418 local authorities in the UK and amongst these are substantially larger and higher profile authorities such as Manchester, Birmingham, Liverpool and the London Boroughs. All are understandably out to protect their own interests in times of austerity. Having said this we are not without success in representing the interests of Wokingham at the highest levels in Government. In January this year the Leader and myself, working with key ministers, managed to persuade the Government to make an unprecedented rewrite of their Local Government Finance Settlement proposals issued in December. We managed to secure over £2m transitional relief grant for two years and more significantly secured a reversal of negative Revenue Support Grant up to 2018/19; and that is actually very, very, important. The Secretary of State for Communities and Local Government, Greg Clark, in his statement on 8 February this year, stated that “a small number of councils were concerned that, as their Revenue Support Grant declined, they would have to make a contribution to other councils in 2017 to 2018 or 2018 to 2019. I can confirm that no council will have to make such a payment”. Wokingham was one of the councils and this had a significant impact on Wokingham, so this was a great success for us in bringing our influence to bear. The challenge now remains to secure this position, no negative Revenue Support Grant into 2019/20 and beyond and we hope all the community of Wokingham will help us in winning this key financial argument.

 

Supplementary Question

The beginning of your answer Councillor Pollock “too wealthy and too white” I think is a little bit of a strange beginning to your answer but £36m of savings means that the Officers have done an extremely good job and I am very pleased that they have been able to do that.  But residents just don’t understand why you as a Conservative Council and Conservative Members of Parliament with a Conservative Government cannot actually get a better deal for Wokingham.  So what more can you do than you have already done?

 

Supplementary Answer

As I have already said the econometric model that allocates national Government money is based on certain factors and those factors which are, as I said, the wealth or the opposite of that which is deprivation.  So if you consider the deprivation statistics and you consider other needs which are often linked to immigration those are factors in the econometric model that skew the allocation of Government money to those areas that have higher amounts of deprivation or ethnic need and we do not score very well on those.  Therefore we do not end up with significant amounts of money whereas if you compare us to Reading they get substantially more from the Government as far as the Revenue Support Grant is concerned and much more of their total spend is actually financed from Central Government money whereas in Wokingham we have next to nothing and that is the fundamental bit. 

 

How do we change that?  We do that every time there is a review of the formulas.  We lobby for those aspects of the formula that are beneficial to us and we lobby against those aspects of the formula that we do badly in.  And that is what we do and I think as I said in my answer earlier the key piece going forward is the negative Revenue Support Grant for 2019/20 and the most important piece for us going forward over the next two or three years is to ensure that that principle, that of our hard earned council tax or our hard earned Business Rates, that we do not lose even more of that than we do currently.