Blind man's bluff

Private letters between Conservative leaders and their ministers reveal frustration over the way the council tax freeze grant was handled. Not only did they feel forced into making a decision about which they were unsure, but the lack of information about future funding meant they were - and still are - making decisions “in the dark”.

It was way back in January that I first asked to see correspondence between local and central government about the 2012 council tax freeze.

At that time, there were just a handful of councils – all Labour or Green - who were openly declaring their intention to shun the government’s dubious financial offer to fund the freeze, but there were already hints opposition to the freeze would not follow strict party lines.

By the time I received a reply – three months later, and well over the 20 working days deadline – the final tally had long since revealed there were more Tory councils (16) increasing council tax than Labour (15) or councils under no overall control (4).

(When the Department for Communities & Local Government published their final and official tally at the end of last month it showed 16 a piece for Labour and Conservative run councils but it later emerged that Labour-run Corby BC’s return had been incorrect.)

The most interesting aspect of the correspondence eventually released is the frustration expressed by some Conservative leaders at the way ministers were pushing their policy via the media.

LGC reported at the time on concerns that local government minister Bob Neill, in a letter to every local newspaper in the land, was not only “encouraging residents to rise up against the council” and using civil service machinery for “overtly political” ends.

The letters finally released by DCLG shows that Surrey CC, publicly accused of financial incapability by communities secretary Eric Pickles in the pages of the Daily Telegraph, was “very disappointed” by the attack launched shortly after it announced plans to increase council tax.

(Cllr Hodge accused Mr Pickles of using information that “is at least four years out of date” but we don’t know what ministers said in reply as DCLG inexplicably did not include their reply in their Freedom of Information response. I’ve asked why and hopefully I might have an update sometime in July.)

This frustration with Mr Pickles’ megaphone diplomacy and strong-arming of councils into adopting a ‘voluntary’ policy cannot simply be blamed on sour grapes on the part of the maligned Surrey leader David Hodge (Con).

Even Conservative leaders who decided to keep their heads below the parapet and their council tax rises to 0% felt strongly enough to put pen to paper.

Cheshire West & Chester Council’s leader Mike Jones (Con) complained councils were “being forced to implement a freeze” with residents believing it was a “done deal” thanks to the endless media coverage organised by ministers.

Making decisions in the dark

The correspondence also paints a vivid picture of councils making budget decisions despite being very unclear about the financial position just one or two years ahead.

In the week after DCLG announced there would be a second freeze fund, three emails arrived from eagle-eyed local authority finance officers who had spotted a reference to a “one-off grant” in the notes of the press release. Elbow deep in budget preperations, they were keen to double check whether this really meant the second freeze fund would be one year when 2012’s funding had been for four years.

In the words of Sean Nolan, then East Sussex CC’s corporate resources director: “I’m not looking to scare the sector prematurely, so any quick clarity, comfort you can give would be very welcome.”

We know now it was indeed a one year grant, but most of those officers who had bothered to enquire waited two months for a reply. (Except Mr Nolan, an adviser to the Local Government Association, who did receive a reply within the hour.)

Three months later, in January, there came a slightly different plea from Cambridgeshire CC. “It would be helpful if, when making the difficult decision about whether to freeze council tax or to increase it, our local authority had greater certainty about what DCLG planned for future years,” asked group leader Kilian Bourke (Lib Dem).

In particular, she wanted to know if a similar, one-year offer might be available in 2014. “This lack of information is not conducive to good ongoing financial management, as it requires local authorities to rethink the council’s position on an annual basis.”

Despite pointing out that a reply would be useful before the council made a decision on council tax “this Thursday”, a reply did not come until a week after the meeting.

Back in Surrey there were similar concerns. In a November letter which predated Mr Pickles’ mauling of the council, leader Cllr Hodge wrote to local government minister Bob Neill in which he said.

“In common with local authorities throughout the country, we at Surrey County Council are grappling with the considerable challenges of the current medium term planning cycle. We are dealing with an unprecedented level of uncertainty over our funding levels, caused in part by the local government funding review, and we now have further funding demands placed on us by the government’s treatment of the council tax freeze grants.”

Explaining the financial cliff edge will create a £30m hole in the budget if the second as well as first freeze funding was accepted, he continues

“Add to this the absence of any information on ‘capping’ parameters and the introduction of the referendum regime for ‘excessive’ council tax rises and it becomes clear that we are having to make financial decisions in the dark.”

Ministers’ response to this plea for some clarity? To pick up the phone to the Daily Telegraph’s news desk and provide quotes for a critique of the council’s financial management.