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English councils and the ‘One Public Sector Estate’ scheme

This December will see the launch of a new phase of the UK government's One Public Sector Estate (OPSE) scheme. The plans could have big implications for many parties, but how will the finer details affect local authorities?

The scheme 

The OPSE efficiency scheme was established two years ago, and was intended to encourage efficient asset management in the public sector. A further £37 million investment from the government will accompany the launch of the scheme's third phase this month, marking its expansion to over 100 local councils working across 24 partnerships.

The aim

The rationalisation at the heart of the scheme is intended to reduce running costs and raise cash through the release of under-utilised land. This process should, in theory, stimulate economic growth via the creation of new jobs and housing.

Local authorities are expected to sell around £13.3 billion worth of land before the end of 2018, and some within the Local Government Association (LGA) agree that council-held land could be of "more productive economic use in the private sector."

Pros and cons 

Official estimates suggest that the first two stages of the scheme have already led to initiatives that will create 20,000 jobs and deliver 9,000 homes over the next five years. The same period is expected to produce £129 million in property sales, and should see a £77 million reduction in running costs.

While some observers close to councils have welcomed the scheme, other commentators are rightfully wary of relying on land sales to generate income. The LGA's Richard Kemp, for instance, recently stated that: "Town halls need to treat their assets as investments...there may be better value for residents in holding onto the property."

Only time will tell if the OPSE can ease the strain on council budgets, but it’s clear that local authorities can hedge their bets and minimise assets sell-off by maximising council tax arrears recovery rates.

Ethical Enforcement Agents such as Dukes Bailiffs can assist local authorities with the collection of these sums – if you work for a local authority, contact us to discuss your options today.

Beyond council tax: a closer look at the Autumn Statement

The changes introduced by this year's Autumn Statement may amount to the biggest shake up of UK local authority finances in 35 years. Last week we examined the possible effect of council tax increases on both local government and vulnerable communities, but what else is in store?

The good news

The government appears to have listened to councils' requests for greater autonomy, and has committed to fiscal devolution in certain areas. Local authorities will be allowed to keep 100% of business rates income, and will be granted power to use capital receipts from the sale of public assets, such as shops and pubs, to reinvest in local services. A small rise in investment in the Better Care Fund was also announced, meaning that local authorities may be able to access an additional £1.5 billion by 2019/20.

The bad news

While the chancellor's suggestion that councils should sell off an estimated £225 billion of assets to make up for the spending shortfall may seem like common sense, it's worth bearing in mind that these assets can be sold only once. Senior officials are warning that this fire sale approach is an inefficient short term solution to the funding crisis, and calls for councils to make use of their reserve funds suffer from the same flaw.

Frances O'Grady, General Secretary of the Trades Union Congress, has also warned that "regional inequalities will get wider" as a result of business rate changes. Councils in disadvantaged areas may struggle to attract sufficient business investment,  while already affluent areas are likely to reap rewards they don't desperately need.

New powers, new dependencies 

The most troubling change for local authorities comes in the form of a 56% reduction to the local government central grant by 2020, amounting to a loss of some £18 billion. This change will force councils to rely on business rates and council tax as their main sources of finance, and will make it absolutely essential that not a single penny is wasted.

Enforcement agents such as Dukes Bailiffs can aid councils by creating realistic, sustainable payment plans that minimise debt write-off. If you work for an unfortunate local authority that's set to be under more pressure than ever, contact Dukes Bailiffs to discuss how our ethical services can help.

What would higher council taxes mean for local authorities?

UK chancellor George Osborne announced on Wednesday that local authorities will be permitted to raise council taxes by 2%. Westminster hopes that this hike will cover a shortfall in adult social care funding, but will such a change really help where it counts?

The proposal 

Councils have borne the brunt of austerity, leading to the lowest level of social care funding for 20 years. The Local Government Association (LGA) recently warned that if cuts proceed as planned, social care prevision could be hampered by a whooping £2.9 billion shortfall by 2020.

Allowing local government to increase council taxes may raise £2 billion by the end of the current parliament. Observers are arguing that revenue generated from this change should be earmarked for social care exclusively, though it's unclear how the Treasury would monitor this, and some working in the industry have expressed concern that funds may end up being put to other uses.

The implications

Councils already have the power to raise council tax by 2% without triggering a referendum. The chancellor's changes will allow local authorities to up fees by a further 2%.

While a 4% boost in council taxes may sound like great news for adult social care budgets, the shift will invariably see more households falling into arrears. Research by charity StepChange indicates that this type of priority debt has already grown by 372% since 2010. Officials at Birmingham City Council have also expressed doubt that the suggested increase will be sufficient to deal with the incoming pressures, arguing that "it's nowhere near proportionate to the scale of the problem".

Finding a solution

In the event that council taxes do rise, Enforcement Agents such as Dukes Bailiffs can help local authorities to ensure that additional sums are collected quickly and sensitively.  Councils who go it alone risk being forced to write off debts, leading to a lose-lose outcome that helps neither budgets, low-income families nor those in need of care.

Our expert Debt Advisors distinguish between individuals who can't pay and those who won't, and strive to create payment plans that boost council coffers without leaving vulnerable parties at a loose end.

If you work for a local authority that's thinking about exercising Mr. Osborne's new tax powers, contact Dukes Bailiffs to find out how our ethical and efficient service could help.

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