Unwelcome Caller

Have you heard the one about the cash-strapped local authority that is being forced to raise its council tax by 16% in order to balance the books?

No!

Well, if you live in Pembrokeshire, you soon will, because that is the inflation-busting increase that Pembrokeshire County Council’s cabinet has agreed to recommend to full council when it meets on 7 March.

Now, as this is merely a recommendation, you might think your elected representatives might refuse to vote for this swingeing increase, but it appears they may have no choice.

This budget-setting process has been the most protracted I can remember, with three seminars and cabinet members sallying forth to persuade those suspected of being unwilling to toe the line.

As one of those who voted against last year’s 7.5% increase I must have been thought a likely refusenik because my “minder” was none other than deputy leader, Cllr Paul Miller.

I’m afraid I had to tell Paul that, unless cabinet comes up with some more compelling reasons than hereto, I will not be supporting this eye-watering increase.

My problem with it is as much to do with the way this has been presented as the increase itself.

That is because members have been subject to relentless pressure (propaganda) – what I believe is known in military circles as “psyops” – to accept the budget proposals.

In the past, budget seminars have been largely given over to imparting information to members as to how local government finance works, but during these latest events officers have told us that failure to nod through this large increase will lead to much “pain” for local people.

This may be true, but if we approve the increase it will also cause “pain” to those paying the tax, and how this “pain” is distributed between taxpayers and service-users is a political decision for elected members to make.

In the course of these seminars, I have made known my thoughts on this subject to the chief executive along with my objections to votes being taken on various proposals during secret meetings.

I much prefer to do my voting in open public meetings, when those to whom I am accountable can see what I’m up to.

For anyone labouring under the illusion that local government is even remotely democratic (i.e. controlled by those you elected to represent your views), I would daw your attention to the email all councillors received on 1 February:

“Dear Members

As Section 151 Officer and Monitoring Officer, we thought it might assist to set out Members’ obligation to set a budget, how to go about it and what you might expect at the budget meeting on 7th March.

As you are aware, the new Constitution says that a date should be set for the submission of alternative budgets and that date should not be more than 20 clear working days before the budget meeting. That date was previously set for 7th February. As we all know from the recent (and previous) budget seminars, the financial picture has been evolving very quickly, resulting in the finance team and consequently Cabinet needing to constantly review the Authority’s budget requirements. Taking into consideration the need for Members to understand exactly what Cabinet’s proposals to Council are going to be, balanced against the need for the finance team to be in a position to fully evaluate the impact of alternative budgets and create the Council Tax resolutions, the s. 151 Officer has decided to extend the deadline for the receipt of alternative budgets to 6pm on 14th February.

It is important that every Member is absolutely clear that no amendments which affect the level of Council Tax increase for 2024-25 will be accepted at Council on 7th March. The procedure for setting the budget is different to ‘usual’ Council proceedings and it is not possible for the s.151 officer to evaluate the impact of such proposals on the day and create the Council Tax resolutions. This is good financial governance and the reason for the deadline for alternative budget proposals. If you are unhappy with the recommendation of Cabinet and any options Cabinet may put forward, the only way to achieve an alternative outcome is to make an alternative budget proposal by 14th February; which if deemed robust and financially sustainable by the s.151 officer can then be put forward for debate on 7th March. We would also encourage you to contact the finance team as soon as possible. Proposals which do not affect the level of Council Tax, maintain a balanced budget and are deemed robust and financially sustainable by the s. 151 officer can be considered on the day.

A number of Members have mentioned the potential use of reserves to contribute to bridging the funding gap, however, due to the need to use reserves to cover the projected £6.8m overspend for 2023-24 and the likely commitment on reserves for 2024-25 (e.g. £3m teachers pension employers contribution if unfunded, any in-year pressures or slippage in budget savings) it is very unlikely that any proposal would be deemed robust and financially sound. Any proposal involving reserves would need to consider the impact on both 2024-25 and future years, e.g. replenishment of the reserve. Sections 25 and 26 of the Local Government Act 2003 require the s.151 officer to give assurance to the Council on the robustness of the estimates included in the Budget 2024-25 and the adequacy of reserves. This statutory statement is designed to give Members assurance that any budget proposals put before them are balanced, robust and financially sustainable.

Council must, by law, set a budget by 11th March. Legislation and the Constitution expects Members to work together through this process to facilitate the setting of a (balanced) budget. Members owe a fiduciary duty to Council Tax payers to avoid loss of revenue or failure to deliver services. Some Members have queried what would happen if Members failed to set a budget. The answer is that it would be unlawful. We would be unable to issue our Council Tax demands whilst still having to fulfil our obligations in respect of statutory services and to precepting and levying authorities. As this would result in likely revenue expenditure exceeding likely resources for 2024-25 (unbalanced budget), the s. 151 officer, in consultation with the Chief Executive, would have to produce a report pursuant to s. 114 of the Local Government Finance Act 1988, placing the Council in territory not seen in Wales before. We must avoid this scenario. It could result in the involvement of Audit Wales and the appointment of an Improvement Board. It would also result in a ‘prohibition period’ during which the Authority would not be permitted to enter into any new agreements which involve incurring expenditure without the express permission of the s. 151 officer, which could only be given if it would improve the situation, prevent the worsening of the situation or prevent a recurrence of it. Wilfully or recklessly failing to set a budget would be contrary to the Principles of Public Life set out in the Constitution – particularly the principle of Stewardship, and would undoubtedly bring the Council into disrepute; which is a code of conduct issue.

There’s no doubt that, in common with every other Local Authority, we find ourselves in a really difficult financial position this year. We recognise the difficulty that competing pressures in the exercise of your democratic functions pose to you all but we look forward to engaging positively as a whole Council to find a solution. Your Chief Executive, s. 151 Officer and Monitoring Officer along with the whole of your senior leadership team is available to assist and advise and please do not hesitate to contact any of us for any clarification or assistance.”

So in a nutshell members can put forward an alternative budget which can be put before full council only if “deemed robust and financially sustainable by the s.151 officer”.

In effect the s151 officer – the council’s finance chief – has a veto on any alternative proposals. As any other budget proposal is an alternative to the budget that the s151 officer has already drawn up, there is an element of marking one’s own homework in all this.

That is in addition to the fact that opposition groups are unlikely to have the information and resources at their disposal to enable them to draw up an alternative budget.

After all, the original budget was drawn up by the officers, not the Cabinet.

And, if threats of breaches of the Code of Conduct weren’t enough to bring any rebels to their senses, earlier this week senior officers arranged a seminar for members with one Max Caller CBE, who is the lead commissioner for Birmingham City Council which has recently issued a  S114 notice – in layman’s terms declared itself bankrupt.

Mr Caller spent some time bolstering his “good guy” credentials by telling us how much he favoured greater openness in local government and how we should only go into secret session in the most extreme circumstances before launching his exocet missile in the form of a slide setting out the consequences of Pembrokeshire County Council failing to set a balanced budget.

I took the opportunity to photograph this document:

This slide is artfully littered with question marks to give it what is known in the trade a “deniability”, but Mr Caller left us in no doubt that he believed the next to last bullet point indicated a real possibility. If it didn’t, why bother mentioning it at all?

Now, “misconduct in public office” is a serious business as this extract from the Crown Prosecution Service website attests:

“Misconduct in public office (“MiPO”) is a common law offence that can be tried only on indictment. It carries a maximum sentence of life imprisonment. The offence concerns serious wilful abuse or neglect of the power or responsibilities of the public office held. There must be a direct link between the misconduct and an abuse of those powers or responsibilities. The Court of Appeal has made it clear that the offence should be strictly confined, and it can raise complex and sometimes sensitive issues.”

With a maximum penalty of life imprisonment, the idea that some poor little councillor could face such a serious criminal charge for merely exercising their right to vote against what they considered to be an excessive council tax increase is strictly for the birds.

Whilst this scare tactic obviously targets councillors whose votes might defeat the budget proposal, it’s interesting to speculate on a scenario where every councillor votes for the 16% increase, apart from one who votes against. Would the sole defector be in jeopardy of the same criminal charge?

Given what Mr Caller had said earlier about openness, I emailed the chief executive to suggest that a recording of this seminar be placed on the Council’s website so that any councillor supporting this budget can tell their irate voters who object to the 16% council tax hike: “Well, as you can see for yourself, a top civil servant told me it was either that, or a spell in Swansea jail”.

I haven’t heard back!

And just in case time spent in Swansea isn’t enough of a deterrent, consider the nuclear option lurking in the final bullet point.

Clearly, if the commissioners are taking all the decisions, there’ll be no need for councillors and though I’d have to listen to the recording to be sure, I think I heard it suggested that, in such circumstances, our allowances would be abolished.

That, for some, will seem even worse than a few years in Swansea prison.

The rack, or the thumbscrews – not a pleasant choice.