Tax Con: Third Time Lucky

For the umpteenth time, and the third 'official' year, Fylde Council set out to implement their Council Tax Con on us again.

And at the third attempt, they've succeeded. We're about to be conned, and we'll be paying more Council Tax to Fylde Council as a consequence.

We've covered this topic ad-nauseaum so we're not going over all that ground again. If you want the history of this deceitful saga, just Google 'Fylde Tax Con'.

At first, it looked as though St Annes Town Council had seen through the scam - because their current Mayor (Cllr Christine Akeroyd) was in the Express a few weeks ago saying they wanted to take on the maintenance of parks and open spaces in St Annes, but only on the right terms. And we're hearing nothing about such terms being made available to St Annes at the moment. That perception turned out not to be quite right: it's just that they're not sufficiently organised yet.

Readers will remember that around 12 months ago, Kirkham Town Council was heading for taking-on the ownership and maintenance of open spaces in Kirkham, and that plan was further advanced than St Annes.

But Queen Elizabeth Oades saw through the con that Fylde was trying on. If Kirkham TC took on the ownership and started charging Kirkhamites for maintaining the open spaces, she expected FBC to stop charging Kirkham taxpayers what *it* had been charging.

FBC on the other hand was having none of this. They were going to stop calling the charge 'Special Expenses' (so it looked as though they had stopped), but they were still going to collect the same amount of tax overall, and spend the difference on something else. (They were going to take the tax that only people in Kirkham had been paying and spread it out over all Fylde's taxpayers)

On the Council Tax bills in Kirkham it would show the Special Expenses that everyone had been paying as zero, and it would show a big new open spaces tax from Kirkham Town Council. Locals would be unhappy with the Town Council - who would appear to have imposed an 'extra' charge (because overall Fylde hadn't reduced what they were taking).

Cllr Mrs Oades took Fylde to task about this, and said it was unfair if Fylde didn't reduce its overall spending pro-rata to the work and costs it was losing.

But Fylde was having none of this. As we said in Tax Con: The Cabinet Speaks (almost exactly a year ago on 20 January 2011), FBC Cabinet's iron fist came out of it's velvet glove. It disregarded the advice of the Scrutiny Committee and said very clearly - You do it our way - or you don't do it at all.

This is an awful way to run a Council, and it all stems from the Cabinet system that concentrates power and knowledge into too few hands.

Queen Elizabeth was clearly furious.

So last year's consideration of the Tax Con ended with nothing more than a plan for a working party to review and reclassify what are called 'Strategic Assets' and for the Transfer of Assets to Kirkham (as it is now called), to take place for Kirkham by April 2012.

And so it was, that on the agenda for Council for Monday 23 Jan 2012, there was an item called "Transfer of Assets to Kirkham Town Council"

The report rehearsed the background, then explained that the working group had looked at the matter over the last year, and had come up with three recommendations for Council. They were

a). that no open space assets will be classed as strategic assets with maintenance costs charged across the whole Borough.

In effect what they are suggesting here is that (unlike last year) none of the Assets listed for Kirkham is of sufficient scale to be classed as a facility that is used (or is designed / intended to be used) by a customer base that exceeds the boundaries of Kirkham.

This is obvious for little neighbourhood play areas of course, but it gets more debatable with places like the Memorial Gardens which, it could be argued, serve a population wider than the taxbase of Kirkham.

If any assets in Kirkham *had* been classed as 'borough wide' then the cost of maintaining such assets should properly fall to the Borough Council and be chargeable over all taxpayers in Fylde. It would not be fair to expect just the residents of Kirkham to pay for them.

For example, suppose we had a big central leisure centre and it was located in Kirkham but designed to meet the needs of the whole of Fylde, it would be right that we should all contribute, and wrong that only Kirkham residents should have to pay its running costs.

So you'd expect the underlying logic of recommendation a). to be that all the costs of maintenance will be met by Kirkham residents via the Kirkham Town Council Precept, and people in St Annes, or Greenhalgh or Elswick or wherever should not be required to pay anything extra in their Council Tax. (But it's not going to work out like that)

b). that the open space assets in Kirkham are transferred into the ownership of Kirkham Town Council from 1 April 2012. (That's self explanatory. It's also perhaps appropriate that on 'April Fool's Day' the Great Tax Con will start)

c). that the capital investment previously agreed in principle by Cabinet be agreed as a capital grant to Kirkham Town Council to a maximum of £110,000.
This looks to be a proposal that work Fylde had said it would do to put the sites in order before handover hasn't been completed, so they're giving the likely cost as a capital grant to Kirkham to let them do the fixing up.

d). that Kirkham Town Council's governance arrangements will ensure appropriate management of the assets once transferred.
We're not exactly clear what this means and, frankly if we were Kirkham TC (which is an autonomous, independent local authority in its own right and not subservient to Fylde in any way); we'd be telling FBC to go play in the traffic.

(Especially so, given the lack of governance - which Fylde admitted to - in respect of their treatment of Melton Grove. Fylde Council is in no position whatsoever to lecture anyone else about how to do Governance).

But the underlying logic here is probably more about still being able to spread some of FBC's overheads by requiring Kirkham to pay for some sort of support managing service.

The report goes on to explain that the cost of maintaining the open spaces that are located in Kirkham, but owned by Fylde Borough Council, is currently charged as a 'Special Expense' to the residents of Kirkham.

But if the assets transfer (as recommended) then this special expense charge will no longer be made, and Kirkham Town Council will need to increase its precept (local tax charge) in order to recover the cost of maintaining the assets transferred into its ownership.

So if Fylde stops doing them, it stops charging for the open spaces, and Kirkham begins to charge (hopefully for Kirkhamites, a bit less than Fylde) for doing them, and it's all square.

Well no. Not exactly.

Fylde presented thee options to the Council meeting:

OPTION 1: No Asset Transfer

This maintains the status quo. Fylde continues to charge Kirkham residents via Special Expenses and does the work itself.

In this option, because FBC judge they won't need as much money for grounds maintenance next year, the Special Expenses charge will go down by £1.77 (from £69.71 to £67.94) in Lytham and St Annes, and down by £14.35 (from £74.55 to £60.20) in Kirkham.

But at the same time, FBC expect this option to require an *increase* in typical Band D *Council Tax* in Lytham, St Annes and Kirkham of £2.37 (i.e. from £138.00 to £140.37).

We suspect some 'fiddling' is going on here.

In Fylde, Special Expenses are supposed to be for the defined activity of 'Grounds Maintenance' and they're charged over a tightly defined geographic area

It looks to us as though Fylde has decided it doesn't need quite as much in Special Expenses for next year as it planned to spend this current year.

However, instead of letting us taxpayers have the benefit of that saving on the Special Expenses charge, it looks as though they will take the opportunity to increase the COUNCIL TAX part of the tax bill by almost as much as it reduces overall in Special Expenses.

The effect of this will be for Fylde to be able to say that overall they've not increased the overall sum taken from taxpayers, (and haven't they done well !), when, in fact, they could, and indeed should, have *reduced* what they took in tax from us in Special Expenses.

So it looks to us at though even if they choose Option1 and do nothing, they will still be conning most of us out of some extra tax anyway.

OPTION 2 Asset Transfer to Kirkham and FBC makes a saving

What a triumph of doublespeak that heading is!

The subtext to it says "the total net expenditure funded by council tax remains unchanged"

What this really means is that Kirkham TC will take on the assets and will charge the folk of Kirkham for them, but Fylde Council will 'make the saving'

By that, they don't mean it will reduce the tax payable by us, they mean the saving will be 'taken' by the council and used for other purposes.

This is some of the most deceitful language you're likely to come across from a Council.

This is exactly the same attempted Tax Con that we have been highlighting year after year.

Kirkham folk will pay extra to their own Town Council who will take over maintenance, but Fylde will, in effect, reclassify what it was collecting from the people of Kirkham as a Special Expense, and will re-distribute it over all taxpayers in Fylde as part of its own 'Council Tax' charge.

In Lytham and in St Annes this move alone will add something like £3.52 (4.99%) to Council Tax bills. It will also add insult to injury to the people of Kirkham, because it will add the same amount £3.52 to their council tax bills, and that's on top of the new charge of £70 or so that the Town Council will levy.

Furthermore, it will also mean taxpayers in the rural parishes are paying more than they should.

Barefaced cheek and daylight robbery are the words that spring to mind in this regard.

We're put in mind of a quote by Mr (now Cllr) Tim Armitt who, some time ago,  said "When did Fylde borough change from being the people's representative and enabler to, in most people's opinion, the enemy? "  He didn't say that again on Monday.

The only thing we can be grateful for is that Kirkham is a 'relatively' small sum for Grounds Maintenance (around £170,000 a year). Thankfully, it's not the £1.3 million that's spent in Lytham and St Annes who are a bit further down the line from this con.

OPTION 3 Asset Transfer to Kirkham and FBC makes no savings

There we go with that doublespeak again....

Fylde says it makes 'no saving' in this option because it would do what it should be doing. It doesn't re-distribute what were Kirkham's Special Expenses as a Council Tax charge over taxpayers throughout the rest of Fylde.

So FBC itself makes "no savings" and the taxpayers do!

The underlying logic here demonstrates how FBC no longer sees itself as being at one with the people. It sees itself as separate from them.

However even if this option were to be selected, it still plans to keep the £2.37 that represents the reduction in Special Expenses needed for next year in Lytham and St Annes, (as set out in Option 1 above).

SUMMARY

The recommendation was to go for Option 2 of course.

The biggest con available.

Thankfully it's relatively small potatoes.

The report to Council concluded by admitting that "Members should note that if Council approve option 2 in Appendix A, as recommended, transfer the assets, make a recurring annual saving and does not reduce the Council's expenditure funded from council tax, the face of all Council Tax bills will show an estimated 4.99% increase whilst the headline Council Tax will be a nil increase and will remain at a band D average of £186.29 across the Borough."

So what happened at the Council meeting last night?

The item really began with Princess Karen Buckley - Finance Portfolio Holder - spinning the line about how Fylde had frozen council tax levels last year and would do so again this next year. The impression given here of course, is that Fylde had held its spending to the same level for two years.

We think this was deceitful because what she said represented the situation partially and selectively. Nothing she said was wrong. Nothing was a lie. It was an accurate statement. But she simply didn't tell the whole story and, as a result, we are all deceived.

Her presentation invited listeners to believe Fylde Council had frozen its spending last year, when the truth is that Government had paid the increase that Fylde might otherwise have charged us, on condition that Fylde itself made no increase. So the increase in Fylde's spending had been paid from national taxation.

When we say 'from Government', readers will recognise that's also from the tax we pay - but it comes from our other pocket of course

Technically Cllr Buckley's statement is accurate as far as it goes. Fylde Council had not increased the Council tax it charged us. But contrary to the impression she gave, it had increased its revenue spending.

Only a week earlier, she had reported to Cabinet that the "Council Tax Freeze grant" from Government (yes, that's really what Fylde calls it) had been £139,000 in the current year, and they would get a further £278,000 from Government (for which read our taxes) for the same purpose next year.

She also gave the impression that Special Expenses and Council Tax are really the same thing - so an increase or decrease on one produces a corresponding increase or decrease in the other.

That's balderdash.

As we've said before, Special Expenses are charges for a tightly defined service paid by residents within just part of a Council's area.

Council Tax is for services that are paid for by the whole of Fylde's taxbase.

So when the service to just part of the area, and funded by Special Expenses, is expected to cost less next year, that account should show a reduction (as indeed it will) on tax bills for the next year, but there's absolutely no need to increase the Council Tax element of the bill to 'absorb' the saving in Special Expenses.

It should be passed on to those taxpayers in the areas from which it was taken.

Princess Karen tried to make us believe that it's like a pie-chart and if one bit goes down, the other increases automatically. She promoted the view that Council Tax and Special Expenses were in effect one charge, and she said the Special Expenses element varied year on year depending on the cost of grounds maintenance, implying that the other one went up and down in response.

She wove a story that would have everyone believing what she said, if we didn't know better.

She also said that Kirkham were getting a capital grant to do the rectification work before handover of the open spaces (i.e. the work that Fylde hadn't done), and she argued that the money Fylde Council would retain from the Special Expenses (around £85,000) was needed to pay off the grant.

Another financial sleight of hand in our opinion.

Fylde had undertaken to complete the rectification works from its own funds. (It currently has about £2m in reserves apart from it's normal budget), so there's no absolute need to retain what is currently being paid in Special Expenses for that purpose.

They can choose to do so of course. But they don't 'need' to.

You have to say, she's good at what she does.

We've said before she is a very able and clever advocate. And of course, that makes her very dangerous,  in the same way that the Commissar - from whose knees she watched as he did the same thing - was very dangerous for Fylde.

Being an advocate or a politician (arguing for a particular outcome) and being a councillor (considering a range of views and choosing the most appropriate for those you represent) are quite different roles.

We have to ask - when you can't trust our Councillors to tell us the full story, when they offer only half a tale in order to support the perception they want to promote, how can they be trusted.? How can their counsel be taken seriously?

During all of this, and in the debate that followed, we were surprised and disappointed to see that Queen Elizabeth stayed silent.

She had been part of the working group, so we can understand it was difficult for her to disagree now, but in the past she has consistently maintained the principle that she would not agree to accepting the open spaces maintenance if Fylde did not make a corresponding reduction in its budgets.

But she seems ready to abandon that principle this year.

St Paul Hayhurst had spotted the con of course. Like us he can see through what's going on. He said he was delighted that open spaces were being transferred to Kirkham, but all Fylde's taxpayers would be paying more if it went ahead.

Wesham's Cllr Linda Nulty said it would impose a 4.99% increase on the taxpayers of Rural Fylde, and she proposed an (in our view) ill judged amendment to claw back some benefit for the cost.  It was heavily defeated.

Saint Paul tried a slightly different tack about playground equipment maintenance, but that amendment too was lost.

So we returned to the substantive motion, the one to agree Option 2 - the biggest con of those on offer in the agenda.

Queen Elizabeth said all the rural areas except Kirkham had retained ownership of their open spaces in 1974. At that time, Kirkham had transferred them to what was then the new council - Fylde - but she said Kirkham Town Council would now like to be the same as the others. She asked Councillors to approve the transfer, and not to let costs muddy the water.

We were saddened to see her principles compromised like this.

On a broader scale we were also saddened to see her support this decision that will set a precedent for the really big fish (Lytham St Annes) in future years. That is really going to cost her residents (and the rural parishes) a great deal in the future - maybe up to £40 a year for each taxpayer as the floodgates open wide.

Worse still is the damage this precedent risks doing at the next election. If Lytham and St Annes open spaces are timed to do the same as Kirkham is doing now, but to do so just before the next May elections, and there is a tax increase in the rural area (where all the Independent Councillors hold sway), of something like £40 per household *for no benefit*, how many Independent councillors will survive to tell that tale?

We think she has been very short sighted in this matter.

Cllr John Davies had spotted the tax increase problem. He said he had no issue with the transfer of assets to Kirkham, but he was concerned about everyone being asked to support a 4.99% increase in Council Tax next year because of it.  He said that in 2009, St Annes residents had been "stitched up" with a 17% increase they had been charged, and he was interested tonight to see how many of the Lytham St Annes councillors would vote for a further 4.99% increase in Council Tax on last year.

Cllr Buckley made a remark that we couldn't quite hear. It sounded like "He's an idiot" But surely she wouldn't have said that, would she?

Cllr Nash [apparently speaking for St Annes Town Council of which he is also a member] said "Where Kirkham goes, we follow. I think it's fantastic. It's a great offer, and I heartily support Cllr Oades"

Whether he will be able to sustain that view when folk in St Annes realise that the Conservative's vaunted Council Tax Freeze actually turns out to be a 4.99% increase on last year, remains to be seen.

Cllr David Chedd responded to Cllr Nash's comments about St Annes and said there was a need to treat each case on its merits, and Lytham and St Annes was much bigger.

That (as you might expect) bought derision from the Conservative side. But he was quite right to be concerned.

Kirkham's Special Expenses add up to a relatively modest £137,081 for next year. Whilst that represents something like £60.20 for each of the 2,272 Band D Equivalent taxpayers in Kirkham, if you re-spread it over a Fylde-wide taxbase of 30,164 taxpayers, it means they're paying £4.54 per taxpayer.

Special Expenses in Lytham and St Annes are £1,255,502 next year. If you re-spread that over all Fylde taxpayers, it will cost each taxpayer £41.62

St Annes Special Expenses alone are around £722,000 next year. If what Cllr Nash said hopes for, were to come to pass, then using the logic espoused at the Council meeting tonight, *all* Fylde's taxpayers will be asked to pay up to £23.94 and FBC could nets the extra £722,000 "without increasing its tax" to us.

This has been a dark day for Fylde, and a sad start to the new Chief Executive's reign. It marks another step that the Council has taken away from its residents.

Those voting for the transfer and for "Fylde Council [as opposed to Fylde's taxpayers] to make the saving" and thus increase taxes by 4.99% year on year were: Cllrs Ackers, Aitken, Akeroyd, Andrews, Armit, T Ashton, S Ashton, Beckett, Brickles, Buckley, Chedd, Chew, Clayton, Collins, Cox, Craig-Wilson, Cunningham, L Davies, Donaldson, Duffy, Eastham, Eaves, Fazackerley, Fiddler, Goodman, Goodrich, Harper, Hodgson, Hopwood, Jacques, Little, Mulholland, Nash, Oades, Pounder, Prestwich, Redcliffe, Rigby, Silverwood, Singleton, Speak, Threlfall, Willder, Wood. (44)

Those against the proposal were: Cllr John Davies, Hayhurst. (2)

Abstainees: H Henshaw (Mayor) Cllr Ford, Nulty. (3)

Absent on the day: Cllrs Hardy, K Henshaw. (2)

Dated:  24 January 2012