Nick Herbert expresses concern at unsustainable council tax rises

Arundel and South Downs MP Nick Herbert has expressed concern at the 4.9 per cent council tax increase agreed by West Sussex County Council for 2006-07.

Mr Herbert was speaking after the County Council's meeting on 17 February which will see the average Band D council tax bill increase from £954.18 to £1,001.34 and this is before the amounts needed by Sussex Police and the county's District and Borough Councils are added on.

While the Government has stated that "it is local authorities, not central government that sets council tax", local government is struggling under the growing number of central targets and initiatives which are leaving many councils with funding shortfalls.  In West Sussex there have been at least 24 new Government initiatives since 1997 being imposed upon the County Council with either no or only limited funding to match.

Councils in the South East are also hampered by a funding settlement which assumes that the costs of service delivery are the same across the country and which fails to provide full compensation for wage pressures in the South East economy.

Mr Herbert said, "West Sussex already gets a particularly poor deal from central government, receiving around £750 per head each year, half the amount in Liverpool and Manchester.  This year the County Council has been given the worst funding settlement for any local authority for 2006-07, leaving it with a £20 million shortfall.

"It is for this reason that myself and the other West Sussex MPs have signed a letter urging the Deputy Prime Minister to review the grant system for local government which is leaving county councils, such as ours, with the prospects of having to make cuts in services."

With a third of the increase in the basic state pension having been taken up in higher council tax and with West Sussex residents having seen the council tax on a Band D property rise by 89 per cent since 1997, Mr Herbert added:

"Irrespective of who is to blame for these rises, it is clear that the current levels of council tax and the scale of rises over a short period of time are both unjustifiable and unsustainable, particularly in a county such as West Sussex where more than one fifth of the population are over 65."

Ends

Notes for Editors

1.  The full text of the letter as signed by West Sussex's Conservative MPs at County Hall on 10 February is as follows:

"We deplore the recent government finance settlement for West Sussex - one that yet again is certain to have a very damaging impact on County Council services. In a repeat of last year, West Sussex has suffered the worst settlement of all counties - the latest in a long line of poor and very harmful settlements. 

Under the Government's new system, the County has to rely on £16.3m of damping grant that could be withdrawn at any time. In addition, the County estimates there is a further £4.2m of temporary funding for Social Care that Government could also remove over time. In short, more cuts to the funding of local services are inescapable under the Government's new grant regime. The County Council is massively reliant on this temporary funding - which makes up around 20% of the grant funding for non-school services.

Even the relatively better grant increase for schools has been achieved only by Government ignoring its own grant distribution system method. It has delayed removing £12.8m of support from the County's schools that the new system implies - but there are no promises this cut will not be made in the future.

We are therefore very alarmed at the prospect of yet more funding being removed from the South East, and West Sussex in particular, in the longer term.

The 2% increase in formula grant for County services that has been received for 2006/07 is, in reality, a cash cut, after reductions in specific grants - such as Supporting People - are taken into account. 

The settlement also fails to provide any cash support for capital investment. Capital allocations announced by Government, designed to encourage capital investment and claimed to be supported by the grant system, bring not one penny of extra grant to the County Council - or to any other authority on the grant floor.

We have to conclude that public services in West Sussex are a low priority to Government. While West Sussex may be more prosperous than some parts of the country, a grant system that provides West Sussex residents with less than half the amount given to Manchester and Liverpool defies any sense of fairness.

Your grant changes totally ignore the independent evidence, such as the report by Professor Oswald on wage costs in the South East. That shows the County is under-funded for the cost pressures it faces - costs estimated at around £20m per annum. It is inexplicable that your grant system now assumes that costs of service delivery in West Sussex are the same as in South Wales. 

We urge Government to look again at the damage being caused by its grant system that treats West Sussex so badly. The cumulative impact of years of poor settlements and low funding can only be very harmful to local residents and especially those vulnerable members of the community who depend on County services.

We want Government to:

· Urgently reconsider its new grant system and the funding allocated to support the County's services.

· Ensure there is a grant system that at least properly protects local services throughout the County and allows services to be maintained.

· Stop cutting specific grants.

· Ensure the County receives full compensation for the additional wage pressures it faces as part of the South East economy. Independent evidence shows the amount the County gets from Government is woefully short.

· Ensure the County receives proper support for the capital investment Government wants it to make.

· Promise that schools will not suffer in future the cuts implied by the £12.8m of temporary support locked into their funding. 

· Urgently examine the regional impact of its policies and the low funding of services in the South East."