Government News Aug/Sept 2007

John Healey, Local Government Minister, has named nine new Unitary Authorities to be created in 2009. Healey claims this will collectively save £150million a year, enabling the new councils to use this money to improve services or cut council tax bills. The new organisations will bring together County powers such as Highway Control, and District powers such as housing, planning and economic development. The new councils are Bedford Borough Council, East Cheshire, West Cheshire, Cornwall County Council, Durham County Council, Exeter City Council, Ipswich Borough Council, Northumberland County Council, Norwich City Council, Shropshire County Council and Wiltshire County Council.
MP’s have warned the government that few banks and building societies will take part in the scheme to use the monies from dormant bank accounts if they can opt out. The government plan to use the money for youth services and financial inclusion projects, but decided to make it a voluntary scheme. MP’s claim that banks and building societies won’t take part because it will take time and money to administer. For more information see Unclaimed Assets within the Financial System.
A cross party Communities and Local Government Committee has recommended that the Council Tax benefit system should be paid automatically through the tax system. Every year an estimated £1.8billion goes unclaimed, and the rules for the benefit are so restrictive that 600,000 children living below the poverty line live in households that are ineligible. The committee said “it is unacceptable that a significant number of households in poverty do not qualify for any reduction in Council Tax. We call on the government to urgently review its rules governing Council Tax Benefit eligibility.” Local Government Finance: Council Tax Benefit.
The Communities and Local Government Select Committee has called on the government to endorse the Lyons Review which proposed that councils should be given the power to levy a supplementary business rate. This levy would be retained locally and spent on developing local economies. The report recommends that if there is a variation from the national business rate of more than 10% the business community should be balloted. For more information see Local Government Finance: Supplementary Business Rate.
The government has announced £3billion will be ploughed into the Surestart programme from 2008. The target is to have a Surestart centre in every neighbourhood.
John Healey, Communities Minister, has announced that the Government is to apply for support from the European Union to help recovery from the recent flooding. For the application to be successful the cost of damage must exceed £2.2billion
The number of people on out-of-work benefits has fallen by one million since 1997. Statistics by the Office for National Statistics shows that in 2007 there were 4.5 million people on out-of-work benefits compared to 5.5million in 1997. Labour Market Statistics August 2007 are available from our publications section.