LGC’s essential daily briefing.
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Today’s top comment: Matthew Taylor: fears of economic insecurity must inform policy
Everyone makes mistakes; some are just costlier than others.
Or the executive at Decca Records who passed up the chance to sign a fledgling band from Liverpool in the early 1960s because he didn’t think they were good enough. Their name? The Beatles.
Then there’s Julius Caesar’s decision to ignore his wife’s advice not to go to the senate the day after a bad dream. That really did turn into a nightmare for him.
In a far less dramatic turn of events, it’s emerged this week that the provisional local government finance settlement has been based on a set of false figures. Errors have been found in the the Valuation Office Agency’s data used to calculate how much councils will either receive or have to pay in as part of the top-up and tariff business rates system.
That’s not to say every area’s calculations are incorrect. LGC understands that is not the case. But the fact some errors have been found means the overall pot of funding to be distributed is not correct and therefore the amount each area will either have to pay in or receive will now change.
LGC understands councils’ budgets are not going to change drastically as a result of this error.
But the fact it has happened at all is not only embarrassing (for the VOA at the very least), it is also very annoying and disruptive for officers and councillors desperately trying to balance budgets under great pressure.
In unusally understated style, Local Government Association chair Lord Porter (Con) called the error “unhelpful”.
After all, it’s one thing to discover an issue like this in the early stages of the process but the errors were only found on Wednesday – the day after the consultation on which the very numbers the whole settlement was based upon closed.
The fact this has happened at all should, perhaps, not come as surprise.
In October – coincidentally when the VOA’s data was last updated – local government guru Tony Travers highlighted in LGC the fact that up to a third of the VOA’s staff were to be lost as part of ongoing cuts. At the time he prophetically warned: “Such reforms will inevitably affect the accuracy and quality of the agency’s work.”
And so it has come to pass.
If officers and councillors don’t laugh, they will cry.
The endless waiting for the local government finance settlement to land in the run-up to Christmas has not helped matters either. It has become a standing joke that the only guarantee is it won’t be delivered after recess begins because ministers would not want it to ruin their holidays.
Forget the fact that there are plenty of people in local government who end up slaving away over spreadsheets during the festive period trying to make sense of the settlement. The least the sector should expect is for all of the information to be correct.
As one LGC reader pointed out, “the absurdly condensed timescale with provisional and final [settlement] amounts either side of Christmas means mistakes like this will happen”.
The VOA has historically had a fractious relationship with local government. The fact representatives from the body turned up to the LGA’s finance conference last week was a welcome sign the VOA was willing to do more to work with the sector and understand its issues.
However, mistakes like this will hardly win the VOA many fans. In fact, it has only strengthened the resolve of others who would like to see the body disappear altogether.
As Claire Kober (Lab), chair of London Councils, said: “The distribution of millions of pounds of public money depends on correct information from the VOA: the importance of this will only increase as the sector moves to 75% business rates retention from 2020-21.
“This error strengthens the case for the VOA’s work to be devolved to a local level to provide greater local accountability over its performance, give businesses greater certainty and confidence about their business rates bills and add more stability to funding for local services.”
While the VOA’s error might not cost councils too much in the short term, it could prove to be a very costly error for them in the long-run.
By David Paine, acting news editor