What’s on my Mind – Funding

The group discussion began with a recap of the morning’s panel on alternative financing, and FTC’s experience with financing. Details of this discussion can be found here.

The group then heard from Lyme Regis Town Council, which gives away more than its precept in grants. The council now has three tiers of grants, with the highest tier granting money over 4 years to enable capital projects and boost confidence moving forward for organisations who receive them. Small and medium tiers of grants are now moving towards match funding to stop organisations from becoming complacent, and using the town council as a crutch. Another council explained that they loaned money to organisations, rather than offering grants to avoid this problem.

The discussion then turned to the public works loan system which Frome Town Council has utilised in the past. This loan system receives applications nationally, via the local council association. Paul Wynne, FTC town clerk, explained how the he found this a relatively easy process with support available in applying for loans, as well as flexibility when it comes to the amount borrowed, and the length of time for repayment. Questions were asked about whether projects must pay their own costs. While this doesn’t seem to be a rule, there does have to be a plan for the financing of the repayments. The loan system discourages loans which would negatively impact the precept.

The group then asked how councils can put pressure on other levels of local authority to obtain some of the business rate, especially in cases where there is devolution. While there was no clear solution to this proposed, business improvement bids were mentioned, where businesses choose to pay towards improvements projects. This could create an alternative source of funding from businesses for councils to use.

Asset transfer was also mentioned. Many councils were concerned about their ability to take on new services without also acquiring income-generating assets from district or county councils.  While local councils are often made to take on additional services to ensure that these are not cut, they often struggle to deliver them with limited income streams. County or district councils are often reluctant to transfer assets or give local councils a portion of council tax. This poses the question “Why does council tax and other income go to a council that does deliver?” and creates a double taxation problem for residents.

On this issue, the group further discussed the issue of devolution. While local councils may care more about the quality of service in their town, are services better provided closer to home? Devolution to urban areas, for example, creates a loss for rural communities as the services will no longer be well provided. There is also a loss of economies of scale by having services devolved.

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