News

Key points and questions raised with the Minister

• It is with disappointment that the Borough of Poole received the outcome of the recent Local Government Provisional Finance Settlement for 2003/04 incorporating the changes to the formulae funding system. \n

• The Council believes that the changes to the formula funding system has resulted in a loss of funding of approximately £2.7 million, the equivalent of an extra 6% on Council Tax. \n

• Without the protection of the "floor" this would have been nearly £4 million the equivalent of approximately an extra 9%. This will impact in future years on council taxpayers. \n

• Following three years of review it was hoped that a system of funding would be developed that would enable council taxpayers to understand themselves whether the financial problems faced by the council was due to inadequate levels of funding or some other reason. \n

• We do not believe that the system of formula funding now introduced is "fairer, simpler or more intelligible" than its predecessor. \n

• We are disappointed that specific and special Grants have risen again. The high level of specific Grants distorts the clarity of local decision making. It is with particular disappointment that we recently have not been supported financially from the Opportunity Fund for recycling. \n

• The Government is saying that the change from Standard Spending Assessments (SSA) to Formula Spending Shares (FSS) is not a spending plan. \n

• However, we are required to inform the Secretary of State for Education and Skills by 31^st January 2003 of our proposed school budget for 2003/04 and have been supplied a calculation of a schools budget consistent with passing on a schools funding share based on FSS. \n

• In addition the well known pressures on Social Services budget are likely to result in Social Services FSS becoming a minimum budget position. \n

• Capital Financing is based on historic debt and actual credit approvals. \n

• As a Unitary Council we cannot directly determine joint Fire Authority levies which have historically set budgets in excess of the fire SSA. \n

2. Detail Formula Changes

• The impact of Resource Equalisation appears to have the most significant impact on council taxpayers. It implies that Poole council taxpayers are in a position to pay significantly higher local taxes. \n

• However, the average wage in Poole is about £19,587 compared to the average for England of £20,384 (New Earnings Survey 2002). \n

• Poole also does not benefit from the extended Area Cost Adjustment (ACA), remaining on the "cliff edge". This supports the case that average wage costs in Poole are not above average. \n

• Poole finds itself in the anomalous position that it has high average house prices (similar to the South East) but only average wage rates. A recent survey undertaken has placed Poole at number 14 in the list of places most expensive to buy a home, in comparison to average wages. \n

• The following graph shows the gap that is growing in Poole between average house prices and earnings. This in turn puts pressure on recruiting staff for essential services like teachers. \n

• However, it is disappointing to note that as part of the Resource Equalisation exercise the effect of re-balancing the PSS control totals has taken money away from the elderly and given it to the other 2 sub blocks. It is estimated that this has cost the council approximately £1.125 million in funding. \n

• Education has been the top priority of the Council. We are pleased to have scored a 4 for Education within the recent Comprehensive Performance Assessment. \n

• However, it is with disappointment that we note that the school budget share identified for Poole is over £500,000 higher than the government’s provision within FSS even though it is a government stated top priority. \n

• In the current year Poole pupils each receive over £400 less from the government than the national average. While we can accept that Poole does not have many of the issues of some inner city authorities, it does place Poole near the bottom of any "Education Funding Leagues" and does not explain why Poole receives over £1 million less for pupil funding than our near neighbours in Bournemouth. \n

• To achieve the performance in Poole schools that has been made on the limited funds available from the government has required considerable sacrifice in terms of other local services. Despite this local commitment it is likely to leave Poole schools with limited ability to respond to the government’s programme of reform to address national concerns over teacher workload. We will also be unable to invest in youth and community to the extent identified by the government in FSS. \n

• On a related issue we have written to Catherine Roberts in the Department of Education and Skills indicating a change in treatment for the calculation of our Schools Budget consistent with meeting the DfES target, related primarily to Post -16 budget Support Grant in the 2002-03 baseline. I attach a copy of the letter. \n