How local government finance works

Paul Przyszlak ANL-140528-094339001
Paul Przyszlak ANL-140528-094339001
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Cabinet Call by South Holland Council deputy leader Paul Przyszlak

I thought I would take this opportunity to explain how local government finance works – and I promise to keep it interesting!

‘A Brief Guide to Local Government Finance for Councillors’ runs to a whopping 136 pages, so I will try to deal with a more general overview, looking at a current local issue.

The council has a mixture of statutory duties and discretionary services.

South Holland District Council (SHDC) collects council tax for Lincolnshire County Council (LCC), the Police and Crime Commissioner (PCC), the Parishes (including Spalding Special Expenses) as well as for themselves.

SHDC retain 10.8 per cent and pass the balance to LCC (73.7 per cent), the PCC (13.4 per cent) and the parishes (average 2.2 per cent).

The SHDC element equals an average of £2.99 per week for our council tax payers. In total the amount retained by SHDC is £3.98m in 2014/2015.

As a councillor, I regularly read the local press and postings on social media from people suggesting things that we should spend money on.

In recent weeks I have seen comments such as “The council should build a swimming pool in Crowland” and “Castle Sports facility should be replaced or modernised”.

As a resident I would support many of these ideas, but as the finance portfolio holder I have to ask how the council can afford them.

It is a very difficult balancing act and one which often requires us to take many different factors into account.

We could look at raising council tax – a one per cent increase in council tax (it has not increased or been reduced by SHDC in each of the last four years) would raise £39,800.

However, the capital cost measured in millions and the annual operational costs which can run into the hundreds of thousands, would require a multiplier in council tax requirement, not an increase, and be payable by all council tax payers from Donington to Sutton Bridge.

We have suffered cuts in central government funding along with most of the public sector and in my next column I will look at how SHDC have mitigated the effects of this belt-tightening.