Archived decisions

RESPONSES TO CONSULTATION PAPERS:

(1) GOVERNMENT CONSULTATION ON THREE-YEAR REVENUE AND

CAPITAL SETTLEMENTS
(2) DEVOLVING DECISION MAKING: A CONSULTATION ON

REGIONAL FUNDING ALLOCATIONS

The Cabinet has recently responded to two important government consultation documents concerning the following financial matters.

On 15 December 2004, the Office of the Deputy Prime Minister published a consultation paper setting out Government plans to introduce three-year revenue and capital settlements for local authorities to start in 2006/07. It is proposed that the extension of three-year spending plans to local government, including police and fire authorities, would offer greater certainty and stability in funding; increase the planning horizon; strengthen financial management and support efficient use of resources at the local level. The proposals also provide an opportunity for these settlements to be cascaded to other bodies thus building on the commitment already made by Government to introduce three-year settlements to schools.

On 11 February 2005 the Cabinet approved the proposed response, as set out in the report and supporting appendix, in response to the questions raised by the Government in the consultation paper (reports available on request). Although the response broadly supports the concept of three-year financial settlements, it highlighted that a number of other changes were planned over the next two years which would affect local government finance and therefore expressed reservations about the introduction of multi-year settlements as early as 2006/07. The response also expressed unease at the rigidity envisaged by the Government for multi-year budgets and council tax figures, which was in contrast to the flexibility contained in the Government's own three-year spending plans. The decision taken supports all the Aims of the Corporate Strategy as the Government's financial settlement provides resources for all of the Council's service provision.

In regard to regional funding allocations, the Government announced in July 2004 that it was examining new ways to integrate Regional Economic Strategies with regional transport and spatial development strategies within a framework of indicative long-term funding guidelines for each region. HM Treasury, in collaboration with the Department for Transport, the Office of the Deputy Prime Minister and the Department for Trade and Industry published consultation proposals on 8 December 2004, aimed at improving decision making by establishing clearer assumptions on funding for regional transport, housing and economic development. The proposals contained two major innovations, namely the establishment of regional transport funding allocations, and the suggestion of longer-term regional resource distribution assumptions to influence allocations in future spending reviews. The consultation proposed seven specific questions which form part of the document's Executive Summary, some of which pre-suppose that the proposals are implemented as drafted, and others are about processes that will need to be established when the proposals are implemented; a copy of the responses to these questions is available on request.

On 28 February 2005, the Cabinet approved the proposed response on behalf of the County Council, a decision which supports Aim 4 of the Corporate Strategy (Building strong and safe communities) be seeking to ensure that the County Council continues to represent the views of the local community at regional and national levels. In considering its response the Cabinet expressed strong concerns about the impact the proposals would have, and in particular the loss of local democracy. A copy of the full response and the consultation document are available on request. In summary, the response contained the following key points in addressing the Cabinet's concerns:-

· acknowledges that sustainable choices on transport, housing, planning and economic development in the south-east should not be taken in isolation but that principal authorities acting together be the proper forum for decision;


· regrets the failure of the proposals to address the way that locally determined priorities will be considered, and how the local levels of resources will be determined;


· alarmed at the lack of certainty over the funding of essential infrastructure crucial to the development of sustainable communities; and


· recommends that the Government establish a working group to consider the difficulty of calculating transport allocations by way of a formula; the County Council would be willing to participate in such a group.