Cambridgeshire Council asked to subsidise other Councils!

County Liberal Democrats led a move to refuse Government demands that would see it subsidise other Councils today!

Until recently a major part of the County Council’s funding as been the revenue support grant (RSG) from the Government. It’s been trending downwards as a part of the program to squeeze local government and has been set to go to zero. As a part of this program the Government talked about an ‘optional multi-year settlement’ which would give councils more certainty about this funding stream.

The settlement on offer for Cambridgeshire and announced in Dec 15 was for £15.31 million in 2017/18, £3.92 million in 2018/19 and zero thereafter. At the same time the Secretary of State said in response to a question about the threat of negative RSGs: ‘I can confirm that no council will have to make such a payment’.

But that was then.

This month the Government changed its mind and said that Cambridgeshire’s RSG would be minus £7.17 million for 2019/20. This was confirmed 21 Oct 16 when the Government said that we would have to decide whether or not to accept the modified multi-year settlement on the the table by this Friday, 29 Oct 16.

That’s a week to make a significant decision. One that’s big enough really that it should go to Full Council.

There was a General Purposes Committee on Tuesday and it was agreed to adjourn that until today (Thursday, 28 oct 16) to consider the Council’s position.

Note that as well as changing the rules demanding a decision within a silly timeframe the Government was unable to give any information about proposed changes to Business Rates Retention and about the Fairer Funding Review which will inter alia address Cambridgeshire’s chronic underfunding.

The meeting today was tense and opinions were split along party lines as to whether to trust the Government or not.

A Tory motion to accept the offer on the table was strangely withdrawn. A counter motion (proposed by the Lib Dems, seconded by Labour) was worded as follows:

… refuse the multi-year settlement but argue the case that Cambridgeshire should not be disproportionately hit by funding reductions because of its current underfunding and its role as an engine of economic growth.

In a recorded vote the motion was carried 9 votes to 8. Tories against all others for.

It’s a great pity. Given time we maybe could have engineered a position which would have commanded broader support. But that would have required the Government to respond quickly and give some guarantees. That’s unlikely so we ended up where we did.

There is a risk. The Government could choose to ignore our arguments and ‘punish’ us but that doesn’t make sense. Maybe the calculations for future years will result in lower numbers than those currently forecast but that’s now the risk on the table. The upside is of course that the RSG for 2019/20 is zero after all and that Business Rates Retention and Fairer Funding add to this. With elections coming up in future years who knows how the political winds will blow.

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