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Rubbish Accounting?

Rubbish Accounting?The accounting arrangements, costs, and charges for Fylde's  Green Bin  service are important and significant matters for taxpayers in their own right.

But the green bin subscription service is only the latest part of Fylde's much bigger plan to raise more money from residents and businesses outside the Council Tax.

It's all set out in Fylde's 'Transformational Strategy' - an overarching scheme  to have Fylde behave more like an income-generating business.

This strategy has huge (and in our view, unwelcome) implications for us all in future. It will invert the fundamental principle on which councils are based.

So this article takes a brief look at what's happened so far at Fylde, before taking a closer look at how the latest council service to be charged for separately is being introduced and accounted for.

We will look at the Transformational Strategy itself in more detail in a future article.


SYNOPSIS
We begin with an Introduction, then take a brief overview of Fylde's 'Transformational Strategy' before considering The Self Funding Council of Today.

Next we look at the Changes that are already Taking Place, including More Precepting Bodies, and whether it's A Council or a Business?

Next, we pull back to Look at the Bigger Picture, and the position with funding services from National and Local Taxes

We regard some of what's happened in the last few years as a  Con Trick and we look at each so far: Equitable Taxation/Special Expenses; Off Street Car Parking; and of course the Green Bin Con Trick.

Looking more closely at the green bin situation, we look at: Trick 1: Double Charging; then Trick 2: Fiddling the Figures, by showing the Green Waste Estimated Costs, and the Green Waste income. Then we look at Trick 3: Changing the Aim, and Trick 4 Changing the Figures.

Finally, we look at what happened at This Year's Budget Council Meeting, and what the report said about Income and Costs, before reporting What Happened at the Budget Meeting after Cllr Elaine Silverwood proposed an accounting transparency amendment, and the subsequent contributions from Cllr Kiran Mulholland; Cllr Sandra Pitman; Cllr Roger Small; Cllr Susan Fazackerley, and Cllr Karen Buckley, together with our own take on what each speaker said,  before looking at The Vote, and where this matter might go next.


 INTRODUCTION 

There's a trend developing at Fylde Council with which we're less than comfortable.

But to be fair, it's not only at Fylde, it's a trend being echoed in many councils across the country.

It's to do with how we pay for the services our council provides, and probably at least some of its roots are in a government drive to make councils 'self-funding'.

 FYLDE'S 'TRANSFORMATIONAL STRATEGY'

An overall plan to make Fylde 'self-funding' in the future - showing the broad overall approach and at least the direction Fylde's Chief Executive wants Fylde follow - was first set out in an awful document called the 'Transformation Strategy' published last July.

We referred to this in our article 'A Ray of Hope - Or Not?"

His original report set out a future of continual change for Fylde.

And, of course, the one thing that the majority of Fylde residents want of their council is that things are kept just as they are. They positively dislike change.

The Chief Executive's plan envisaged continual change, so we can be quite sure it's not going to go down well.

His strategy aims to address:

  • Cultural Transformation

  • Digital Transformation

  • Commercial Transformation

  • Financial Transformation

  • Political Transformation

It is a truly awful plan. Readers can follow this link to see for themselves what the future might hold - at least if he has his way.

But when they first saw this plan, Councillors, (and even our Dear Leader), were incensed that his ready-made transformational policy document was presented to them for approval, when it is *they* not the officers that should consider and determine what goes into the Council's policies. (Tail wagging the dog syndrome).

Our article recognised that whilst the impact of the 'Awful Transformational Strategy' would probably take a while before anything practical happened, we knew that, like the genie released from the bottle, it was never going to go away altogether.

And as Arnold Schwarzenegger might have said, we also expected that - it would be back - just as we expect to return to it, and its spawn, quite a bit in future articles.

But the good news at the end of that first meeting was that Councillors refused to approve the Chief Executive's report, and they set up a cross-party working group to look into the matters it raised. (That was the "Ray of Hope" part of our article heading)

Those meetings happened, and a revised document was eventually approved as a draft by the Finance and Democracy Committee on 25 September 2017. We've had a quick look at the draft and, sadly, didn't see major changes. (That was the expectation of the "or not?" part of our article heading).

We will have a deeper look at all this 'Transformational' stuff in the future because we still think these proposals are a great risk for Fylde in all sorts of ways, and if it goes ahead (and sadly, unless councillors unexpectedly develop some steel in their spines, it probably will), we expect many of the moves it will spawn to become running sores into Fylde's future.

 THE 'SELF-FUNDING' COUNCIL TODAY

But looking to the shorter term for the moment, and in response to the present Government's call to become 'self-funding', Councils are increasingly implementing charges - outside the normal Council Tax precept - in order to fund services that were once part of the Council Tax.

We introduced this as an item a year ago when we published 'Fiddling with Figures?'

It looked at some of the background and quite bit of detail about 'Special Expenses' charge on Council Tax bills.

It also showed how LCC had managed to classify a Council Tax rise from 22.60 to 46.10 as being an increase of just 2%. (yes really!)

So now we're looking again at how the figures are being manipulated, with special reference to the changes that have happened since our article last May.

 SO WHAT CHANGES ARE TAKING PLACE?

There are basically two sorts of change taking place.

 MORE PRECEPTING BODIES

The first is that more and more 'bodies' appear on your council tax bill each year and demand money.

At one time it used to be just the County Council, your Borough Council and, if you had one, your Town or Parish Council.

But now, several others have been added.

There's a separate charge for the Fire Authority (that used to be part of LCC's charge).

A separate charge for the Police and Crime Commissioner (that function used to be within the LCC's charge for its Police Committee).

Then, for people in Lytham and St Annes, there's a separate charge for the something called 'Special Expenses' (that used to be part of FBC's council tax charge).

And this year we have a new 'Brenda from Bristol' charge ('ANOTHER one?') called 'Lancashire County Council Adult Social Care' (which used to be part of LCC's charge for adult social services, but has now been allowed by Government as a separate and additional charge outside the capping regime).

As these charges become separated from their former existence within the Borough or County council tax that we used to pay, they have become 'extras' - because when the new body or charge is added separately, the payment to the former body is not reduced by a corresponding amount.

So this year's new charge for 'Adult Social Services' is over and above, and it is therefore extra to, what LCC used to spend on adult social services.

 IS IT A COUNCIL OR A BUSINESS?

The second sort of change we're seeing is when services that are (or were) part of the Council Tax become more like businesses.

And instead of everyone sharing the cost of the service via a tax, they change into money-raising schemes that impose whatever charge the council thinks they can get away with.

Off-street car-parking charges fall into this category - as we show later.

And last year, a completely different type of money-raising charge was introduced, a separate charge for Green Waste.

It's now a subscription service. It requires a payment over and above the Council Tax that we used to pay to Lancashire County Council (who previously funded it in Fylde, but who have not reduced their precept accordingly).

And although Fylde hasn't yet made the transition, some other councils have started to use their ability to issue fixed penalty 'fines' under Public Space Protection Orders (and similar new legislation) for things like dog controls, littering, feeding birds, cycling in prohibited places, parking to drop children off at school and more, as a way to generate additional income for the Council

That's because the Council keeps these 'fines' (technically 'penalty charges') that people pay to an Authorised Officer on the spot.

Fylde is NOT using PSPOs as income-generation tools (at least not yet), but they have implemented PSPOs for various dog controls.

And they look set to have a new barbecue prohibition PSPO that would give them the power to issue a fixed penalty 'fine' if someone had a barbecue on whatever land Fylde decides to class as a prohibited area, for example, on the beach, or at Fairhaven Lake, or some other designated open green space in Fylde.

And we have heard mention of other PSPOs in the pipeline.

 THE BIGGER PICTURE

The broad trend of all these changes - the 'Big Picture' so to speak - is the very significant cultural shift that is taking place as 'council services' are slowly morphing into 'consumer services' and alternative ways of raising money.

Some folk might say this would be a good move. For example, with a subscription system, childless couples might well be a lot better off if they didn't have to pay large mounts of Council tax to educate other people's children.

But previous experience of this sort of thing has shown that 'consumerisation' of services that were traditionally funded by the community can bring unexpected problems.

When the 'corporation' (council owned) bus undertakings were privatised, we were told it would be better because it would introduce competition amongst bus operators, and that would increase consumer choice and lower fares.

Hands up anyone who thinks any of that has happened?

In fact, he opposite has happened.

It's true that for a while after privatisation, Blackpool Transport were competing with the 'Blue Bus Company' (formerly Fylde Transport). But pretty soon, both companies realised they could become more profitable if, instead of competing against each other, they amalgamated to become more of a monopoly bus provider on the Fylde coast.

This happened when Blackpool Transport bought-out the shareholders of the (by then privatised) Blue Bus Company.

So the public now has less choice of operators than before; fares have risen disproportionately to the fares charged when it was a public service, and we no longer have the concept of public service (or even public transport) left in our bus services - except in London - which, for reasons that we don't exactly see as justifiable, still has a public bus service the like of which few 'up north' can remember, and many have never experienced.

And as for providing more choice in services, try telling that to folk in the Over Wyre district, and in great swathes of rural Fylde, where bus services are now a thing of the past.

And as another example - selling off former council houses to sitting tenants at deep discounts turned into our failure as a nation to maintain an adequate national stock of social housing.

Many now see this as a big problem.

Whilst some subsidised social housing rents are still available from housing associations, the absence of what used to be controlled low rents on 'council houses' no longer constrains what commercial landlords can charge, or what housing costs.

Low cost rentals are now hard to find, so more and more housing benefit has to be paid to more and more people - and (although we haven't done the sums on this, we wouldn't be surprised to find that) taxation to fund Housing Benefit probably exceeds what was spent managing and subsidising a stock of council housing.

As with these examples, we suspect the 'consumerisation' of other public services such as we are now seeing, and others which are yet to come, will also have unintended consequences.

Whilst it can be attractively argued that a consumer-based system offers choice, and gets as close as possible to the actual costs incurred by each person, it also goes against the founding and fundamental principle of public services - which is that (within a system of property banding (that crudely and cheaply relates taxation levels to your ability to afford to pay) - the costs for public services are shared equally by ALL taxpayers.

That's because a Council - unlike a business - is there to provide community services that individually, residents could not afford.

It's not there as a moneymaking machine, nor should it be.

Councils are (or at least were) the providers of universally shared services that were needed by everyone at some time in their lives; like fire, police, education, roads and highways, libraries and so on - and to which everyone contributed their share, and could call on them when needed.

But this trend to consumerisation will, if unchecked, eventually change councils into businesses, and that's a fundamental change that will have all sorts of unexpected consequences.

Furthermore, it's happening mostly without any public debate or even public understanding.

It's simply being drip-fed foisted on us as though it was inevitable.

It isn't.

 NATIONAL AND LOCAL TAXES

Back in 2004, when the first counterbalance article was published, roughly 50% of Fylde's income came from Council Tax. The other half came from Government - either in the form of either 'Rate Support Grant' or re-distributed 'Business Rates' - but virtually all council income was derived from taxation of one sort or another.

We hope to offer a future article that will look in some detail at the many changes that are in train for Council funding, but for the moment, it's sufficient to say that councils have been told to become more 'self funding' and not reliant on grants from national taxation any more.

The former Rate Support Grant is currently shifting to transform into, for example, a 'bonus' payment for Councils that agree to the building of a lot of houses.

And there's a plan to change how business rates work. This involves - or appears to involve - councils being given the ability to keep all / most of / some of, the business rates they take in. (Previously this money was sent to Government who re-distributed it according to a formula of relative need).

This idea is still in flux, and the Government's intention keeps changing, so it's too early to say whether or exactly how this will shake out.

But, clearly nervous of what some councils might get up to with business rates, (and remembering Liverpool under Derek Hatton and Militant Tendency where rates were ramped up higher and higher in order to fund social support for residents), and partly (and more recently), to help reduce both the national deficit and the national debt, the Government imposed a cap on the increases that councils could charge local taxpayers.

The most recent version of this capping constraint has meant that if a council wants to increase its spending above a Government-set capping limit, it may do so only if it first holds a local referendum in which, a majority (of those voting) support the increase.

No one is confident that support would be forthcoming, and the costs of just holding the referendum would considerably increase what was needed. So the idea of holding a referendum is not popular.

This is why we're seeing council tax increases in recent years being 'X.99%'.

Apart from making councils sound like a cheapjack retailer, that '.99%' gets as close to the capping limit as possible, without tipping over into a referendum situation.

Perhaps unsurprisingly in these circumstances - like some cunning offshore tax-avoiding business model - councils have sought and devised, increasingly convoluted arrangements to avoid some of what they spend being caught within the Government's capping regime.

In the same way that the Government itself has been shifting everything possible outside its traditional accounting system - (so it no longer counts as 'Government Debt'), local councils are up to the same sort of tricks to avoid being capped and having to have a referendum.

Prompted by what's happening in Fylde with the Green Waste service, we're first going to take a brief look at the most significant of the 'capping by-pass' techniques that Fylde has devised so far - before we look more closely at the most recent of them - the subscription charges for green waste.

 THE CON TRICKS ARE APPEARING

We call them all Con Tricks.

That's because we believe the public used to be able to have confidence in the competence, honesty and integrity of those they elect to govern them, but, very sadly, that's proving no longer to be the case.

A range of devices are now being deployed by some councils that use half-truths and deception to avoid people realising what's going on.

People are being tricked into parting with their money by placing unworthy confidence in those they ought to be able to trust.

It's a con.

 1. THE EQUITABLE TAXATION CON TRICK

Readers who've been with us for a long time will remember Fylde's running sore that was first attempted in 2005 called 'Differential Rating.'

It later changed its name to 'Equitable Taxation', then morphed into 'Special Expenses' when the Equitable Taxation name was discredited, first by us, and then by some first class investigative reporting by Elizabeth Broughton from the Gazette. She was one of very few people across Fylde who actually grasped what was going on.

In essence, the aim of 'Equitable Taxation' (as - eventually - publicly stated by Fylde's then Deputy Chief Executive) was to get round the Government's spending cap in order to raise more money from Fylde residents.

The final version of plan was simple. Town and Parish Councils across Fylde would be given control of their own budgeting for parks and open spaces.

Up to that point, Fylde Borough had levied its Council Tax to all households, and that tax included the cost of maintaining virtually all open spaces throughout Fylde.

So everyone paid the same amount.

That actually WAS an 'equitable' arrangement.

Everyone paid the same, just as anyone could use any open space and children could go on any roundabout or set of swings throughout Fylde.

But under the new scheme, Fylde decided that instead of the Borough Council precepting (charging) taxpayers for this service in the rural area, (and passing the money on to the parishes (who actually did the work), they would let the Parish Councils raise the money themselves by precepting the residents of the parish directly.

Whilst this change was always going to produce winners and losers amongst what residents in individual parishes had to pay to their parish council, in theory, it was accepted, because people thought that Fylde Borough would reduce its spending by the amount they were no longer passing on to the Parish Councils.

But they didn't.

Fylde simply kept this money for themselves and the Parish Councils had to charge it *in addition* to what Fylde had been charging.

Even worse, Fylde also introduced a 'Special Expenses' charge in the urban areas of Lytham and St Annes for maintaining local parks and open spaces.

This slid another lump of money onto the Tax Bill as an *extra* 'Special Expenses' charge that appeared to be outside Fylde's precept.

In all, this deceitful practice kept Fylde within its technical capping limit, but overall it raised FBC an extra 1,315,069 (yes 1.3 million) from Fylde's taxpayers.

And that situation continues to today.

 2. THE CAR PARKING CON TRICK

Fylde runs a series of car parks that are not part of the road-parking scheme that's run by LCC.

Examples include car park areas in Wood Street, The Square, North Promenade, Fairhaven and so on. They're called (rather obviously) 'off-street' car parks.

The report for the 2016/17 season has recently been published, and it makes interesting reading.

Car park income for the year 2016/17 was 655,490 (up from 601,632 the year before).

Spending was 295,579 (also up - from 279,706 the year before)

So Fylde's most recently published accounts show that off-street-parking made a surplus of 359,911.

A note to the report says

"The surplus funds raised through the provision of off-street parking facilities are used to off-set the costs to the Council of providing services to the public (such as parking enforcement deficit, refuse collection and waste recycling, street cleansing, tourism services, parks maintenance, housing services etc.). Without these surplus funds, those costs would have to be met through Council Tax."

Except they probably wouldn't be met through the Council tax.

Why?

Well, if motorists were only paying for the costs of providing and managing the car parks, and not being fleeced for money to run housing and refuse collection etc as well - (services that should properly be charged to the Council Tax we pay), then Fylde's spending increase would most probably have required a referendum before such an increase could be implemented.

That's because without the 'profit' from the car parks, for Fylde to provide the current level of services, the Council Tax demand would breach the Government's capping limit.

Charging motorists more than the car-parks cost to operate damages trade and tourism - and that's another example of unintended consequences - and of Fylde's willingness to make people pay large sums to the Council outside the Council Tax.

And now there's another tax-capping-evasion con trick being brought into play.

It's the Green Bin subscription service.

This is another charge for services that's being made outside of the Council Tax regime.

And, like the Car Park charges do at present, the trajectory for green waste looks set to generate a surplus of income over costs that Fylde can use to spend on other things.

 THE GREEN BIN CON TRICK

We're not going into the detailed figures here. We did that last November, and readers can follow this link for the full details behind our claims in this matter.

Basically, two high level, and several subsidiary, tricks or devices have been employed so far.

 Trick 1: Double Charging

Residents who had their green bins collected last year paid an extra 25 on top of their Council Tax charge whilst, at the same time, Lancashire County Council paid Fylde to provide the green waste service.

Yes, Really.

17,303 residents paid Fylde 432,575 to have their green bins emptied

And according to Cllr Eaves, Lancashire County Council also paid Fylde in excess of 600,000

So the first con trick was that Fylde effectively got 'double time' money. They were paid at least twice for doing the same job in the first year.

 Trick 2: Fiddling The Figures

When the Council was considering whether to have a subscription service for green waste, the Chairman of the Committee told the Council the aim of the subscription was to cover the costs of the green waste service.

The vote to implement the green waste subscription scheme was on the basis of that information.

 So What Were the Estimated Green Waste Costs?

In March 2016, Fylde estimated that the cost of the green waste service to 33,883 homes with one or more green bins would be 561,518

In September they estimated that to operate the same service for another year would cost 563,810

They also estimated that, (under the proposed new Green Bin subscription service), about 50% of homes that currently had green bins would subscribe during the first year - (increasing to 60% in year 2, and hold steady around 70% each year thereafter)

And they said if that happened, the estimated cost of running the reduced (50%) service for 2017/18 would be about be 411,413

 

 What Was The Estimated Income?

In terms of income, if 50% of the homes that previously had a green bin *did* sign up, then the income would be 423,537 (i.e. half of the 33,883 homes X 25)

That would have given Fylde an estimated 'profit' of around 12,000 on the scheme if its costs were, as predicted, 411,413.

However, when they thought about it a bit more, someone in Fylde must have seen that, for the following year, when the proportion of subscribers was expected to increase from 50% to 60%, and the subscription cost would rise from 25 to 30 per bin, that would have delivered an income of around 609,000 - (a theoretical 'profit' of up to 198,000 on the estimated costs).

And at a predicted 70% take-up the following year, the profit would be even bigger.

We think someone in Fylde either panicked at this point, or they saw it as a great money-making opportunity, and decided to fiddle the figures.

So the story changed

First they tried to pretend that the base figure for the calculations was not the 33,883 homes that they had been using all along for green bins, but instead, they would use the 'average' of 22,000 bins they collected per round.

This was an enormous accounting red-herring.

The folly of the argument is clear when you remember that the subscription charge is per bin, per home, per year.

It's not at all related to how often you put the green bin out or how often Fylde collect it.

The number of green bins collected is a complete red herring.

What matters, is how  many homes have one or more bins they want collected.

We said at the time, this 'red herring 22,000 bins' was just a device, so Fylde could claim the subscription income would not be more than it cost to run the green bin service.

That's still the case.

The next trick was to change Fylde's aim.

 Trick 3:  Changing the Aim

Cllr Eaves declared the aim was no longer just to cover the cost of the green waste service. The green bin subscription charge was now intended to cover the whole of the loss of the 760,000 that LCC would be withdrawing, rather than the cost of the green bin service (which was expected to be between 411k and 563k)

At the 2017 budget meeting, pressed by Cllr Mrs Oades to account separately for green waste costs (so councillors could know what the costs were, in order to set a proper subscription charge in future), the Conservative majority voted her amendment down and refused to account for the green waste separately.

This (deliberate) move means that (at least as things stand at present) it is completely impossible to know the actual costs of the green waste service, because the costs are simply not being recorded separately.

Staff time, vehicles, and so on that are used on green waste, are not being costed to green waste.

We believe this is an attempt to prevent anyone from finding out what the real cost of the service is, and it is a public disgrace that a local authority should behave in this way.

 Trick 4: Changing the Figures

But there was yet another green waste con trick to be played out.

After its first year of operation, Fylde has just revised what it expects to get from the green waste subscriptions.

They've increased their estimated subscription income by 131,000 for the year just gone (2017/18), and by another 77,000 in 2018/19, and by another 17,000 a year thereafter.

These increased estimates lift the original estimated subscription income to become:

  • 2017/18 (the financial year just ended): 431,000
  • 2018/19 (the financial year just started): 517,000
  • 2019/20 (and thereafter): 517,000

And those increases in income are predicted to happen without increasing the subscription charge beyond the full year 30 now being charged.

Fylde say it's simply because they have had a greater number of subscribers in the early years than they expected.

We think the income is still a bit underestimated. We also think it's now even more likely there will be a 'profit'

We suspect someone at Fylde thought so too, because they've also very significantly ALTERED THE ESTIMATED COSTS of PROVIDING THE SERVICE as well.

Pressed (again) by Cllr Mrs Odes, last November, the Council was given a report that shows the new ESTIMATED costs of running the service during its first year.

But this time, the estimated costs of providing the green waste service had greatly inflated.

The full details and our own analysis of this situation are in our article 'Bin Ends' - of last November, which we now summarise.

Readers should bear in mind that the trajectory of Fylde's own cost estimates for green waste was:

  • Before the subscription service, the full cost of the green waste service to all 33,883 homes with a green bin was 561,518
  • To run that same level of service for another year would have cost 563,810
  • However, if the service reduced (as was expected) to 50% of the original service, the cost would be 411,413

But last November, officers said they ESTIMATED the cost for the first year to have been 709,361

That's quite a lot more.

And if someone gave us an estimate of 400k then, after doing it, said the charge was 700k, we would be more than displeased.

Our 'Bin Ends' article explains the detail of how we think manipulation of these costs has been undertaken.

Some of it is quite disgraceful, and well below the professional standards we are entitled to expect.

 THIS YEAR'S MARCH 2018 BUDGET COUNCIL

At present, Fylde seems to feel it has got away with what it has done so far, because it carried on regardless at the budget meeting in March 2018.

There was almost no new information for us to report.

 The Income Side

The only real news on income was that officers reported at that, the end of the first year, 17,303 people had subscribed to the service in its first year.

That's close to Fylde's first (and proper) estimate of around 16,941 (i.e. 50% of 33,883 homes with green bins),

But using Fylde's second (and artificially deflated red-herring) method of calculation, the number of subscribers in the first year should only have been 11,000 people (i.e. 50% of 22,000)

We believe this real life, actual, situation confirms our view that Fylde intentionally underestimated the number of people who would sign up, in order to deflate the apparent income the Council would receive.

And it's for the same reason that they have just substantially increased their predicted income - as we've shown above.

We have consistently argued, and we still think, this was done to conceal the prospect of a surplus, and these figures show they have now been found out for doing it.

 The Spending Side

The report showed that the green waste costs had not changed since last November's (artificially inflated) ESTIMATE of Fylde's spending.

In truth there can be no update or revision, because the green waste costs are not being recorded separately.

The best you can get is an ESTIMATE of what the green waste costs were. And, as we've seen at Fylde, the estimated cost supposedly jumped from 400k a year to 700k a year.

With those sort of estimates, there is no reality. There is no longer any truth. These are 'photoshopped' estimated costs.

Even when the final accounts are published, the green waste cost will not be published separately.

It will be hidden within an overall 2m or so that has been spent on ALL Fylde's waste and recycling.

In this regard they're simply following what Wyre Council did a year earlier.

When we asked for Wyre's green bin costs a year ago, they told us:

"The cost elements of the Waste & Recycling Service are not broken down independently. The full costs of operating all elements of the service and support costs are 2,937,437....."

We suspect this sort of thing is happening in many councils in England, not just in Wyre and Fylde.

But it IS the case that in Fylde:

  • It is IMPOSSIBLE FOR ANYONE TO KNOW the ACTUAL cost of the Green waste service.
  • It is IMPOSSIBLE FOR ANYONE TO KNOW whether their 'green waste' subscription is paying for things other than what they believe they are subscribing to.
  • It is IMPOSSIBLE FOR ANYONE TO KNOW whether the Council tax they pay is being used to subsidise the green waste subscription service.
  • It is IMPOSSIBLE TO KNOW what the green waste subscription charge ought to be - because Fylde are intentionally setting it at whatever they feel they can get away with, not at what the service costs to provide.

And this is plain wrong.

It's not the sort of behaviour we have a right to expect from our councils.

Arguably it's even worse; because it's not caused by incompetence (which would be bad enough), it is a deliberate deception on the part of the majority party at Fylde, as our next section illustrates.

 AT THE BUDGET MEETING

To her great credit, and against what was always going to be overwhelming Conservative opposition, Independent Cllr Elaine Silverwood once again valiantly called for accounting transparency at Fylde, and proposed an amendment to the budget, (just as Cllr Mrs Oades had done the year before)

We think readers will be interested to hear the arguments (and in some cases, apparent ignorance and prejudice) that met her call for openness and transparency in Fylde's green waste accounting when she said:

"It's our duty as a Council to deliver public service. Charging for this service should be either to support or cover the costs, not to have the objective of making a profit. As of this morning, the final figure for 17/18 green bin subscriptions is 17,303. I appreciate it is more difficult to be accurate about the actual costs of providing this service because of sharing drivers, vehicles etc. But I do believe it is our duty to be honest and transparent, and quite frankly, simply provide easy to understand accounts for our residents.

So the question is: Is it the Council's objective to cover the cost of green waste collection, or is it there to help shore up our finances as a result of losing Lancashire County Council's grant.

For the purpose of our accounting being open and transparent, I would like to move, once again, as last year, that the cost of the green waste service is accounted for separately in the accounts..."

Her proposition was seconded by Cllr Linda Nulty.

 Cllr Kiran Mulholland

First to speak was (Non-Aligned) Cllr Mulholland. He questioned whether it was an amendment at all. The Mayor said it was an addition to the recommendations. Cllr Mulholland continued in similar vein saying he didn't have a problem with what Cllr Silverwood had proposed, but he didn't think it was an amendment. The Mayor reminded him that any member had the right to propose an amendment.

We think Cllr Mulholland was wrong here. Regular readers will know we have time for his ability, but we don't think in this matter he recalled the significant debate from the previous year, and we suspect he thought they should be simply altering the figures for the next year's spending when, in fact, what was being proposed by Cllr Mrs Buckley was a five year plan that included how the council's money is managed. If he had realised this, we think he would have taken a different viewpoint.

 Cllr Sandra Pitman

Next was (Conservative) Cllr Sandra Pitman who said:

"Honest and open and transparent. Well, I do believe that the figures which Cllr Silverwood refers to can be seen and heard in Operational Management. The Committee has received and published these figures in the past, and therefore there is nothing about these figures that actually is secret, and Operational Management does require to see what has been going on and has been given those, and that will happen this coming year. So I do not think we need to be more honest and open than we actually are.

The reference to a profit being made I find quite odd because, as you probably know, and if you'd researched this at all, you find that other authorities are actually charging more than Fylde. Our 30 is much less, significantly less, than what other authorities are charging, and we certainly will never make a profit out of the green waste subscriptions. They will not equal, and they will not exceed, what Lancashire County Council once gave as a subsidy.

So there's no profit made at all.

And I am very surprised that this one continues to come up because if any inspection of how much has been... how many subscribers we have and how much has been made, will never produce a profit."

Cllr Pitman is no dummy, but she's either mistaken or she was being intentionally deceptive in what she said.

The figures provided to the Operational Management Committee have all been *estimates*.

No *actual* figures have been provided, nor can they be - because last year, Cllr Pitman voted with others in the majority Conservative group specifically not to collect information that would give the ACTUAL costs. And, as we have shown, 'estimates' of spending are open to all sorts of latitude if you choose to use it.

Furthermore, her fallacious argument about Fylde not making a profit is based, not on the charge relative to the cost of the service, but on what other councils are charging.

Profit (technically called a 'surplus' in Council-speak) relates to cost and income. It is not related to what other councils charge, nor to what LCC ever gave to Fylde.

We'd be very surprised if she did not know that.

 Cllr Roger Small

Next to speak was (Conservative) Cllr Roger Small. He said

"In actual fact I'm just going to repeat a lot of what's been said actually. The green waste subscription scheme has only been running for a part year. It only starts its first full year in the new financial. And it's 25 and then obviously 30, so I do emphasise that 18/19 s going to be the first full year of the scheme.

It's a subscription scheme. The numbers are not going to be certain. We can't guarantee that the numbers that we had last year will be exactly the same as we have next year. Some people opt in, some people opt out, and that is the very nature of a subscription scheme which people buy into. So there's no guarantee of future funding.

And I would actually take exception to what's been said because I've been sitting on Committees where the full figures have been released, and I know they've been discussed at Operational Management as well as Finance and Democracy, so they have been in front of members, there's nothing there to hide on this particular one at all. It is there to try and cover the costs as best we can. As was pointed pout, there's a black hole of 763,000 I believe, which will take some finding.

On the figures that Cllr Silverwood gave, I did a quick calculation, which would be about 519,000. Now I realise that there are slight differences on that, but I do emphasize that we haven't actually run the scheme for one full year yet, it's just been a part year, and there must be teething troubles and no doubt we will get better this next one.

So I would just say, appeal to people, to bear with what we've got because it is open and transparent."

We know Cllr Small of old. He speaks convincingly (but often, in our opinion, he also uses red herrings amongst the smoke and mirrors he frequently deploys).

We have also found from experience that he rarely has a grasp of the details, as exemplified here by his apparent belief that estimates given to the Committees are the same as what was actually spent.

We thought he ought to have been reminded that they're only estimates - because he was another of the people that voted to deliberately refuse to keep separate costings for green waste at the budget meeting last year!

So he ought to know (and perhaps does know) that there can never be any actual costs reported for the green waste service.

And in any event, he mostly missed the point of the amendment altogether.

Cllr Silverwood had not complained about the *charge* being made (which is what he was banging on about).

Her amendment did not address (or even refer to) the *charge* Fylde was making.

It referred to the need to record the *spending* on green waste accurately - and that could have been done whether the service had been provided for one month, or ten months, or a full year.

This was an example of full-on smoke, mirrors and red herrings in action from Cllr Small.

 Cllr Susan Fazackerley

Next came the Dear Leader (Conservative) Cllr Susan Fazackerley who said:

"I think I'm right in saying, I think people should be made aware of if they're not aware, that the scheme did go through external audit last year and was found to be sound.

We are proceeding along CIPFA Rules, and CIPFA rules do not require us to make an individual balance sheet of any, well, of that particular service.

I don't like the implication that we're trying to diddle our residents because we're charging 30. I believe that is the average and certainly no higher than the average throughout Lancashire, and I think it's spurious to suggest that we're trying to make a profit out of our residents, we're simply trying to cover the costs of the monies that we have lost, because of the withdrawal of the Lancashire grant"

Firstly we will point out to her, and to our readers, that the green waste scheme was part of the 2017/18 accounts.

As yet, these have not been externally audited, and Fylde's external auditor has not yet considered them. They will be considered after formal closure, probably in the summer/autumn of this year.

In fact, when explaining to us why they couldn't look at the 17/18 accounts yet, (because they were still working on the 2016/17 accounts), Fylde external auditors told us:

".... This is because the item of account you refer to the recording of income and expenditure relating to the charges levied by the Authority on local residents who opt to receive green waste collection services does not relate to an item of account for 2016/17. The Authority introduced the charges after 1 April 2017, therefore the income and expenditure associated with the scheme does not feature in the 2016/17 Statement of Accounts."

Auditors are always a long time behind, and they were only working on the 2016/17 accounts when we wrote to them for information and advice.

Secondly, some of CIPFA's guidance (in particular a bit called SeRCOP) does require separate accounts to be kept if the green waste operation is classed as a 'trading operation' and that's a matter we're still looking into.

But in any event, it's entirely within Fylde's prerogative to operate green waste as a separate cost centre within their own budgeting.

They have chosen not to do so, and Cllr Fazackerley was actually another of the Conservative councillors who voted not to keep a separate cost of the green waste service at the budget meeting last year.

Cllr Fazackerley is, however, partially right to say Fylde is not setting out to make a profit from "residents".

Those likely to deliver Fylde a profit are the green waste "Subscribers" (This distinction is important, because the green waste service has been separated from, and is not part of, the Council tax that *residents* pay because it is now paid for by a 'subscription').

When the Dear Leader sat down, no-one else wanted to speak to the amendment, so (Independent) Cllr Linda Nulty summed up as the seconder.

She said there was mostly not a problem with the scheme itself, but people had told her whilst they were happy to pay for the scheme, they didn't want to feel that the charge was being used to make a profit for the Council to offset its other expenditure, especially as this is a subscription, and not everybody pays it.

She concluded

"It's just assurance we require really, that all income must be used to provide the service and not for other projects.

Under Fylde's curious and separate rules for Budget Council meetings, it then fell to the mover of the overall budget to sum up before the vote.

 Cllr Karen Buckley

As proposer of the budget, (Conservative) Cllr Mrs Buckley said:

"I'm surprised that there is such confusion on this issue. If you go to our corporate plan, it's very clear that we are having to look at ways to meet that deficit. That deficit is 763,000 - we're not seeking to make a profit out of this scheme, we have been left with that huge amount of money leaking from the revenue budget going forward and we have introduced a green waste charge as have many other councils so I cannot be clearer than that....."

Cllr Buckley has a good brain and a grasp of Fylde's finances, and we're surprised if she hasn't seen the light on this matter.

She appears to argue that it is OK to charge more than the cost of the green waste service - because she wants it to cover not just the cost of providing that green waste service, but also the loss of other funds from LCC as well.

We understand, (and are currently seeking confirmation), that whilst some of the LCC grant was given to Fylde for green bin recycling, other parts of the LCC grant were provided in support of the Blue and Brown bin services (principally for paper and bottles), neither of which, (again as we understand it) may be charged-for separately outside the Council Tax scheme.

If that's correct, it would certainly be improper, and it might even be unlawful, to replace the support that was given for other recycling - like the blue and brown bin service - with money raised from green bin subscriptions.

And in any case, we'd expect anyone - Cllr Buckley included - not to be satisfied if her subscription to, say, a club or society was higher than it cost to run that club or society, in order to generate a surplus that was to be used for something not connected to the club/society at all.

But the BIG point being missed in all of this is that it's NOT about how much Fylde charges.

It's about the fact that *Fylde is hiding what it is doing* by refusing to account for the green waste subscription service separately from services that are funded by Council Tax, even though the income side of green waste IS wholly separate from Council Tax.

We recognise that separate accounting would publicly expose what they are doing more clearly, so we can understand their reluctance, but subscribers have a right to expect a subscription to meet the costs of the service to which they subscribe.

And those who do not subscribe have a right to see that the tax demanded of them is not being used to subsidise a subscription service that should meet its own costs.

If Cllr Mrs Buckley genuinely doesn't see what's happening here, we think she would be well advised to look more closely.

She could start with the officers estimated cost for 100% of the original service being 563,810

She should then compare that with their estimated cost for 50% of the new service being 411,413

And then compare that with the estimated end of year cost reported last November which was said to be an incredible 709,361

Then she should look at *why* what should have been 411k turned into 709k, and whether that higher figure is a proper and trustworthy estimate of spending.

Alternatively she - and our other readers - can follow this link to see a comparison of the estimates considered by the Operational Management Committee - which we have reproduced in a handy table, together with our own take on why the discrepancy exists.

We're pretty sure if Cllr Mrs Buckley did that with an open mind, she would come to the same sort of conclusions that we did when we looked at it.

 The Vote

Needless to say, when the vote was taken on (Independent) Cllr Elaine Silverwood's amendment at the Budget Council, it was - as the previous year when Queen Elizabeth proposed it - lost to an overwhelming vote of the Conservative councillors who, once again, voted to refuse to keep separate records of how much the green waste service is actually costing.

Anyone would think Fylde's Conservative group don't want us to be able to compare how much they spend on green waste collection with how much they're charging for it in subscriptions.

We should also say we don't believe Fylde is alone in this matter.

We know of several other Councils who are not publishing their costs on green waste separately.

We've already drawn the attention of Fylde's external Auditors to this situation and expect to do so more vigorously when Fylde's 2017/18 accounts are being audited later this year.

We've also been in touch with the Chartered Institute of Public Finance Accountancy who tell us that they have not made, and do not expect to make, changes to the accounting guidance they issue (and that virtually all councils follow) with respect to the introduction of subscription based services in local councils.

So, whilst we expect one further approach to FBC to seek a change, if that fails, our next port of call has to be the body that makes the laws and regulations in the first place - Government and Parliament.

One way or another, we expect to have more to report in due course.

Dated:  17 April 2018

 

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