Somerset Council must hike council tax by 10% and be granted special financial flexibilities by the Government to avoid effective bankruptcy, according to a proposal set to be considered by the authority’s leadership.

How near the edge is Devon? – Owl

Jonathan Bunn www.standard.co.uk 

A report published on Monday gives the council’s executive options for plugging a huge funding gap or face joining a growing number of authorities that have issued a section 114 notice declaring their inability to balance the books.

Details set to be considered on January 15 show Somerset Council, which declared a “financial emergency” last year, is facing cost pressures of £108.5 million in 2024-25, an annual increase of 20%.

Among saving measures which the council’s Liberal Democrat leader Bill Revans described as “heartbreaking”, the council could end funding for discretionary services such as theatres, leisure facilities and five recycling sites.

In addition, Somerset plans to use £36.8 million of reserves and surpluses from local taxes to reduce the funding gap to £37.9 million.

The report gives the council’s leadership three options for covering the remaining shortfall.

These are increasing council tax by 10%, which is double the percentage currently permitted annually without a local referendum and requires dispensation from the Department for Levelling Up, Housing and Communities.

This council tax hike would generate £17.1 million and must be combined with securing a “capitalisation direction” for £20.8 million from the department, which allows receipts from the sale of assets to be used for everyday spending on services.

If the council tax rise is rejected by the Government, Somerset Council must request a capitalisation direction to cover the full £37.9 million.

If either request is rejected, the report says “this will force the section 151 officer to use his statutory powers and issue a section 114 notice”.

Somerset would then become the eighth council since 2020 to declare effective bankruptcy, and the sixth since the beginning of 2022.

Somerset Council was established as a unitary authority in April 2023 after the district councils in the southern part of the ceremonial county were abolished, largely in a bid to cut costs.

Councillor Revans echoed warnings from other local government leaders in insisting the model of local government finance is “broken” and said Somerset had also been hampered by a “historically low” council tax rate.

He added: “This is what a financial emergency looks like. No decision has been made, but all of these savings and the 10% council tax increase are unprecedented actions that have to be considered if we are to steer this authority through a period of extreme pressure.

“Officers have done as we have asked and left no stone unturned. The result is a set of options, many of which are unpalatable – some heartbreaking – that no-one would want to take forward.”

The Government has come under pressure over the state of local government finances after a prolonged funding squeeze and has been criticised by Tory council leaders.

The local government finance settlement made £565.3 million available to Somerset Council in 2024/25, a 6% increase on £533 million in 2023/24.

A spokesperson for the Department of Levelling Up, Housing and Communities said: “Councils are ultimately responsible for their own finances and for setting their own council tax, but we remain ready to talk to any concerned about its financial position.

“We recognise they are facing challenges and that is why we have announced a £64 billion funding package to ensure they can continue making a difference, alongside our combined efforts to level up.”

Because the commons at last got around to debating the Post Office scandal, there was insufficient time left for the second reading of the “Offshore Petroleum Licensing Bill” last night.

It will now be “rescheduled”.

Awkward moment for the government (and Simon Jupp) kicked down the road. – Owl

Petition reaches 1.2 million.

you.38degrees.org.uk

Remove the CBE granted to Paula Vennells due to her role in the wrongful prosecution of 550 Post Office staff as part of the Horizon computer scandal.

Evidence has been produced that the Post Office engaged in a mass cover up which led to the wrongful prosecution of 550 Post Office Staff many of whom were subsequently jailed, bankrupted and in some cases, sadly took their own lives.

The initial Post Office investigation in 2012 failed to find any issues and as a result in 2012, Second Sight, an independent investigative firm were brought in to investigate complaints that the Horizon system used in post offices was inaccurate, buggy and could ‘lose money’. Despite pledging full co-operation initially, Post Office subsequently withheld documents from the investigation and Paula Vennells later failed to answer a select committee when challenged on why this documents had not been produced as requested. The damning report, marked as ‘confidential’ stated that the Horizon system was ‘not fit for purpose’ and among their discoveries were 12,000 communication failures every year, software defects at 76 branches and that the system was failing to track money from lottery terminal, tax disc sales and cash machines properly. It concluded that rather than investigate the cause of such errors, Post Office instead accused sub-postmasters of theft. The Post Office dismissed the report which was subsequently leaked to the BBC in 2014.

Despite Paula Vennells assertion that Post Office “have been working with Second Sight over the last few weeks on what we agreed at the outset. We have been provided the information” to Parliament at her select committee appearance in 2015, the lead investigator for Second Sight, Adrian Bailey, when asked if this was the case said categorically, “No, it is not” which meant that he could not access files to back up his suspicions that Post Office Ltd had brought cases against sub-postmasters with ‘inadequate investigation and inadequate evidence’. The requested files had still not been handed over to Second Sight 18 months later.

In March 2015, on the eve of the Second Sight report publication, Private Eye reported that the Post Office had instructed Second Sight to end their investigation, destroy all paperwork and scrapped the independent committee that had been convened.

In 2019, a class action case, Bates & Ors v Post Office Ltd, was settled by the Post Office in favour of the 550 sub-postmasters for over £58 million.

Mr Justice Fraser, the judge in the case concluded that the approach of the Post Office: “amounted, in reality, to bare assertions and denials that ignore what has actually occurred, at least so far as the witnesses called before me in the Horizon Issues trial are concerned. It amounts to the 21st century equivalent of maintaining that the earth is flat.”

Mr Justice Fraser, so concerned by what he had seen in the case, has passed a file to the Director of Public Prosecutions. In the Lords, Baron Arbuthnot of Edrom said in November 2019: “My own suggestion is that the government should clear out the entirety of the board and senior management of the Post Office and start again, perhaps with the assistance of consultancy services from Second Sight, who know where the bodies are buried.”.

Having been handed a CBE for services to the Post Office, and moved out into other senior positions in government and healthcare, it is only right that this award is now withdrawn through the process of forfeiture.

Paula Vennells has subsequently refused to answer questions from these staff as well as the media and has refused to apologise for the cover-up, misery and trauma caused which has brought not only herself but the Post Office, the honours system and government into disrepute.

Link to sign here

The Marsh Family sing about the New Year’s honours in their parody of: “There is nothing like a dame”

Older homeowners who downsize should be exempt from paying stamp duty while those who own a second home should be financially penalised in an overhaul to tackle Britain’s housing crisis, a study has concluded.

Oliver Wright www.thetimes.co.uk

The report, backed by Lord Heseltine and Lord Mandelson, also urged the government to review greenbelt boun­daries to free up land for development and force local authorities to plan for their future housing needs.

Academics at the London School of Economics and University of Sheffield also recommended a revaluation of council tax bands so that the bene­ficiaries of higher-priced properties would pay more to support social house­building.

Their conclusions are likely to be examined closely by senior figures in the Labour and the Conservative parties as housing moves up the political agenda before this year’s election.

The report, commissioned by the Family Building Society, said that tackling the housing shortage could not be dealt with by building more homes alone, pointing out that even a pro-development government would find it hard to add more than 1 per cent a year to the existing stock.

It said the UK had a vacancy rate of only 3 per cent — one of the lowest levels in the developed world — which was “inadequate” to allow normal turnover and mobility. This situation is likely to get worse with latest household projections for England suggesting that the number of households is set to increase by about 1.6 million over the next ten years.

That would mean even if the national target of 300,000 new homes being built each year was achieved, more than half of these additions would go to meet this increase, leaving relatively few to help reduce the backlog of the present unmet need.

In 2000 more than 70 per cent of households in England owned their home. In 2022, the figure was just over 64 per cent. That year fewer than 25 per cent of households aged under 35 were owner-occupiers compared with more than 50 per cent in 2001.

The report’s ­authors argued that much more needed to be done to use the UK’s existing housing stock more efficiently. They pointed out the discrepancy between older homeowners — sometimes living alone — in houses that are both too large and unsuitable to their needs.

But they said that at present there was too little to incentivise these people to downsize as they would incur both the cost of moving and paying stamp duty on their new home.

To remedy this, the report recommended that stamp duty should be waived for downsizing older homeowners, combining it with an emphasis on creating “retirement communities”, which could ease the moving process and help keep people healthier and connected.

It recommended a crackdown on second homeowners and the short-term Airbnb rental market, which it said distorted housing mar­kets, making it harder for local people to get on the ladder. It pointed to Wales where second homeowners faced paying up to three times the normal rate of council tax for a second property.

Mandelson said that facilitating downsizing would be a “far swifter way of easing some of the existing housing problems” than “headline-grabbing newbuild targets”.

He continued: “It can be done quite readily. Stamp duty land tax can be changed easily and its impact, as seen during the pandemic holiday, can be enormously beneficial in overall economic terms. It just requires a little ­creative thinking from the Treasury.”

Heseltine said the report should be “required reading” not only “for those with their hands on the levers of political power but also anyone interested in building a civilised society”.

Christine Whitehead, emeritus ­professor of housing economics at the London School of Economics, said the UK’s housing policy had suffered from a “mishmash” of initiatives. She said that successive governments’ focus on newbuilds would not on its own be enough to tackle the problem, which could be solved only through a range of ideas such as stamp duty reform and a crackdown on second homes.