'Regional Government would mean surcharge on Council Tax,' warns Lilley

- Tuesday, 11th November 2003

 

Peter Lilley, MP for Hitchin and Harpenden, today launched a strong attack on plans for a costly new tier of regional government. The Government‘s decision to shift funding away from the Home Counties has already forced up Council Tax in Hertfordshire to painful levels and undermined our ability to fund our schools. Now they are threatening an additional surcharge on Council Tax if plans for regional assemblies go ahead. Peter Lilley was speaking after the Government announced a costly "information campaign" to sell the case for creating elected regional assemblies, starting in the North of England. Other regions would follow, depending on the results of the first regional referendums in autumn 2004.

Peter Lilley said: "England already has enough politicians. Public services across Hertfordshire won‘t improve by creating yet more politicians and fiddling with the tiers of local government. It won‘t mean a single extra doctor, teacher or police officer.

"Regional assemblies will involve an expensive and complex restructuring of local government, costing up to ?2 billion. On top of this, the administrative cost of a regional assembly in an Eastern Region could be up to ?45million a year. In London the regional assembly now charges a regional council tax of ?224 a year on Band D bills. A regional assembly in an Eastern Region would have similar powers to hike up Council Tax

"Ultimately, government plans for creating new regional politicians will take power away from local communities - such as over planning, transport and housing. The residents of Hertfordshire will be governed from Cambridge. New developments - like sprawling housing estates, noisy concrete roads or towering incinerators - could be imposed on us irrespective of local wishes."

END

Notes to Editors
Government ‘Information Campaign‘

The Government campaign on regional assemblies was launched on 3 November. John Prescott remarked, "the progression towards regional government in the northern regions in no way affects the Government‘s commitment to the development of a strong regional voice in all eight regions" (ODPM Press Release, 3 November 2003).

/continued...

Local Government Reorganisation

Under Labour‘s plans for regional assemblies, two-tier local government would be abolished. This could be either county councils or district councils. Nick Raynsford, Labour‘s Local Government Minister, has said, ‘we are asking the independent boundary committee to consider the appropriate structure for a wholly unitary pattern of local government... It will need to consider whether a structure based predominantly on the county or on the district is the most appropriate in each circumstance" (Nick Raynsford, HC Debs, col. 146-7, 21 May 2002).

The abolition of two-tier local government would entail sizeable one-off reorganisation costs. During the last local government reorganisation, abolishing Humberside County Council (John Prescott‘s local council) and restructuring local district councils, cost ?53 million in one-off reorganisation administrative costs (HC Debs, col. 658W, 18 November 1998). Using Humberside as a benchmark figure, abolishing the remaining 34 county councils could cost up to ?1.8 billion in 1999 figures - equivalent to over ?2 billion today.

Administrative Cost of Regional Assemblies

On top of this, the taxpayer will need to fund the regional assemblies‘ running costs. Based on the per capita administrative cost of the London Assembly, regional assemblies elsewhere in England would cost ?360 million a year.

Regional Assembly Population Total cost per year
London 7,187,272 ?60,500,000
Estimated cost per year
Eastern 5,418,900 ?45,614,449

Cost of regional assemblies outside London based on per capita cost of the London Assembly of ?8.41 per person (source: GLA net revenue expenditure in 2003-04, cited in GLA, Consolidated Budget 2003-04, February 2003, p.15).

New Council Tax

The London Assembly charges a regional Council Tax of ?224 on Band D bills in 2003-04. Regional assemblies would have similar powers to levy a regional precept on local Council Tax bills.

As the Government‘s Regions White Paper (DTLR, Your Region, Your Choice, 2002) has previously stated:
"The simplest means for an elected assembly to raise money from people within its region is a precept on the Council Tax. This is the means by which the Greater London Authority can raise additional funds and by which various other public bodies, such as county councils and police authorities, are partly funded. An assembly will set the level of the precept, but the money will be collected by councils in the region as part of the existing arrangements for collecting Council Tax... An elected assembly will also be allowed to set a higher precept within the region to fund additional spending if it considered this desirable. Regional assemblies will be accountable to their tax-payers and voters for the precept levels that they set and, as with Council Tax levels in local government, we would be reluctant to intervene in these decisions by placing a limit on an assembly‘s precept."

Possible Locations of new Regional Assembly

A regional assembly would be located far away from most local communities.

Region Location of (main) Government Regional Office (main) location of existing Regional Chamber
Eastern Cambridge Suffolk

 

 

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