CELG(4)-08-11 : Paper 3

Welsh Government - Communities, Equality and Local Government Committee

Supplementary Information / Note

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ACPO Cymru: Chief Constable Ian Arundale

Date:  25th October 2011

Subject: Funding anomalies / Council tax equalisation 2006/7 to 2011/12

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1.0          Introduction and Background

1.1          At the Welsh Government’s Communities, Equality and Local Government Committee meeting of the 5th October, 2011 reference was made by Mark Isherwood AM to the issue of police council tax precept equalisation which was a major barrier in relation to Force Mergers when this was considered by Government in 2005.

1.2          This paper sets out the current position in relation to precept across Police Authorities in Wales.

2.0          2005 Mergers Debate – A recap

2.1          One of the major difficulties involved in establishing a single ‘Strategic Force’ for Wales in 2005 resulted from the significant differences in precepts that were charged by Wales’ four Police Authorities.  Baseline police council tax precepts for 2006/7 are summarised in the Table below:

Authority

Council Tax at Band D 2006/7

Tax- base

Total Precept Income

 

£

 

£M

Dyfed – Powys

150.21

198,794

29.861

Gwent

152.32

197,676

30.110

South Wales

126.42

447,230

56.538

North Wales

166.89

269,749

45.018

Average/ Total

145.07

1,113,449

161.527

Source: CIPFA “Council Tax Demands and Precepts 2006/7”

2.2          The rules imposed by Treasury at the time meant that equalisation of precept had to take place over a period of no more than five years within a maximum 5% precept increase cap in any one year.  In effect given the baseline position this meant freezing council tax in Dyfed Powys, North Wales and Gwent Authorities for the period and increasing the precept in the South Wales Police area until this “caught up”. In the interim period this would result in a recurring annual loss in police precept take estimated at some £27.8 million over the period to 2012/13 compared with the status quo.

 

3.0          Police Council Tax in Wales – the current position

3.1          Increases in council tax precept since this time have done little to address the differential in council tax which is still apparent today. The increases since 2006/7 by Authority are summarised in the table below:

Authority

Council Tax at Band D - £

 

2006/7

2007/8

2008/9

2009/10

2010/11

2011/12

 

£

£

£

£

£

£

Dyfed – Powys

150.21

157.68

165.51

173.7

181.44

189.09

Gwent

152.32

159.94

167.14

174.66

181.38

188.09

South Wales

126.42

132.74

139.38

146.35

153.67

161.35

North Wales

166.89

178.16

186.18

195.49

201.33

209.34

 

Authority

Council Tax at Band D – Increase since previous year

 

2006/7

2007/8

2008/9

2009/10

2010/11

2011/12

 

%

%

%

%

%

%

Dyfed – Powys

0.3

5.0

5.0

4.9

4.5

4.2

Gwent

4.3

5.0

4.5

4.5

3.8

3.7

South Wales

4.1

5.0

5.0

5.0

5.0

5.0

North Wales

4.9

6.8

4.5

5.0

3.0

4.0

Source: CIPFA “Council Tax Demands and Precepts 2006/7 – 2011/12”

3.2          Undertaking a similar precept equalisation process now under the same restrictions as imposed by the Treasury at the time of the amalgamation debate would result in a recurring financial loss of around £33 million by the end of 2016-17. This remains a substantial barrier to any future amalgamation under such circumstances.

3.3          In this context it is important to note that the formula funding allocation of police grant is particularly urban focussed when compared with Health and Local Government allocations in Wales. Thus the position in relation to overall funding per head of population taking account of government grant plus precept also needs to be taken into account. These issues are illustrated in the tables below.

Table 1: Allocation of Government Police Funding (excluding precept) compared to using Local Government and Health distributions for each area 2011-12

 

Actual Police Government Funding per Head of Population 11-12

Reallocated based on Local Government Distribution in Wales

Reallocated based on Health Distribution in Wales

Difference to Local Govt. Per Head

Difference to Health  per Head

Dyfed – Powys

£114

£138

£137

£-24

£-23

Gwent

£148

£141

£136

£+7

£+12

South Wales

£146

£134

£133

£+12

£+13

North Wales

£122

£133

£138

£-11

£-16

 

Table 2: Allocation of Overall Police Funding per Head of Population (Including precept) compared to using Local Government and Health distributions for each area 2011-12

 

Actual Police Government Funding per Head

Police Precept Per Head of Population

Total Funding Per Head of Population  -Police

Reallocated by Local Govt. Distribution – Wales

Reallocated by Health Distribution – Wales

Dyfed – Powys

£114

£78

£192

£210

£207

Gwent

£148

£69

£217

£215

£207

South Wales

£146

£59

£205

£203

£203

North Wales

£122

£86

£208

£202

£210