Morecambe Town Council Precepts

Wednesday 17th January 2024 Westminster Hall

16:00

[David Morris (Morecambe and Lunesdale) (Con)]

I beg to move,

That this House has considered Morecambe Town Council precepts.

This debate is of huge current importance to my constituents. An immense parish council tax rise has been inflicted on them. Last year, it was reported to have risen by 231%—this is a parish council—which is believed to be the highest such increase in Britain last year, bearing in mind that the base precept for this town council increased by 66% in 2021-22 and 50% in 2022-23. I think I got that right.

Last year, the town’s parish council voted to increase the precept for Morecambe residents, which saw the town council’s share of council tax rise by an unprecedented 231%. The council raised £1 million to set up a community fund in the hope that that £1 million would be ringfenced to buy a parcel of land on the site of Frontierland, a former funfair. The land is already owned by the taxpayer. It is owned by Lancaster City Council, which purchased it for a reported £3 million. The land is not for sale, so it is highly unlikely in any event that it would be undersold. This is double taxation, plain and simple.

It has also been reported that Morecambe Town Council has already spent £48,000 on engaging architects for plans on the site, which is not for sale. That has also now been lost. The town council made a shocking U-turn in July 2023 after my last speech on this issue in mid-April last year. It decided to withdraw its expression of interest on the eyesore—the site of the former wild west-style theme park Frontierland—but the £1 million fund remains in its coffers.

The town council did not carry out a referendum; it carried out an afternoon stall survey on the local prom. It cannot be verified whether any local people were present. The following is from the town council: some 65 respondents, the highest bracket, were willing to give £100, followed by 55 respondents at £50, and 35 respondents at £10. Some 100 respondents were willing to give amounts that ranged between £2 and, in one case, £15,000, which was obviously someone having a laugh at the ludicrous proposals. That is 255 people, if the figure is even true and if they were local people.

I therefore decided to write to every household in the Morecambe Town Council area to ask whether they supported the increase and whether they were ever aware that the increase took place. The rate of return was staggering. Over a quarter of the people of Morecambe responded—26.8%, some 3,919 people—which shows my constituents’ strength of feeling on this issue. I asked people whether they were aware of the rise before their bill hit them: 3% of respondents said yes, and 97% said no.

This is just a snapshot of what they said:

“The whole situation appears ludicrous to me, and I hope you will do all in your power to reverse what has happened”;

“I support regeneration and development, but the timing of the increase, the amount and the lack of notification has taken the decision out of our hands”;

“I cannot believe they took money without consulting first”;

“What right do they have to make that decision on my behalf? It is hard enough paying Council Tax as a single pensioner as it is, and I hope that this extra money we have paid will be reimbursed”;

“I have no idea of how this has happened. Yes, I want my money back thank you”;

“It is terrible. No other provider can increase charges by such unopposed.”

That is just a snapshot of some of the photocopies I have of that survey.

I have been asking questions in Parliament about whether the 231% tax rise through the council tax precept last year for residents of Morecambe was lawful. Originally, councillors could be surcharged under the Audit Commission Act 1998 if the rise was deemed unlawful, but that was repealed, and responsibility for councillors’ misconduct now lies with the standards board and the adjudication panel. That seems toothless to me.

Last year, the town council was taken to court for non-payment of its auditor, and that was upheld—the auditor won. No one knows how much the legal bill cost taxpayers in Morecambe. Indeed, the town council recently released a statement saying that

“during the past two years the council has received challenges to its end of year audit”,

which caused

“substantial delays to the conclusion of the audit, and significantly increased the workload of officers, resulting in a backlog of day-to-day work”.

In plain English, their ineptitude led to more spending.

Last night, my local radio station released an update on the town council’s proposed figures, so I have only had the past few hours to scrutinise them, but they are woefully damning. The town council is now proposing to shift the £1 million community action fund into council reserves, which I believe it will use to borrow against increasing council tax further, using £150,000 towards cutting the council tax precept. The town council suggests a 33% reduction in the council tax precept, compared with last year—in effect giving back what appears to be one third of a massive increase in Morecambe taxpayers’ 2023-24 bills.

To be perfectly clear, I have no political interest in Morecambe Town Council. The Conservatives do not field candidates to it because it has historically been mired in controversy and accusations of financial impropriety. I do not receive a bill from the town council because thankfully I live one street outside the catchment area. I very rarely get involved in local politics, but I cannot be quiet on this issue.

To be fair, the Morecambe Bay Independents party, which made great gains in Morecambe town’s parish council elections last May, sweeping out some of the decision makers responsible for this embarrassing debacle, proposed giving back the money. The advice it received from Lancaster City Council, which collects the council tax, is that there is no mechanism for refunding the money, and an alternative mechanism must be sought. The biggest issue is whether the council can give the money back. I am not sure that it can, but if the Minister can signal whether any mechanisms are available to town councils to refund council tax, I would be very grateful, as would my constituents.

The Labour party, which chairs the town council, says that party policy is to freeze council tax. Well, examples begin at home. It has continually spanked the taxpayers of Morecambe with annual increases in council tax, including last year’s 231% tax rise and another massive rise this year. That contradicts the national council tax policy. What will Labour members say to justify that to my community when knocking on doors in Morecambe? Bear in mind that the council raises money directly from the local taxpayer, and there is no Government involvement, so the old chestnut of Government cuts will simply not wash.

The Liberal Democrats also co-chair the council. The leader of the town council last year wrote an open letter to me, which was naturally released to the press before I received it, stating:

“The Town Council street rangers along with dedicated volunteers of Morecambe Liberal Democrats, have now taken over the weeding service (funded by Lancashire County Council for the next 5 years) for the whole District”—

not just Morecambe. So the taxpayers of Morecambe are now subsidising the weeding service of the whole of Lancaster. That is hundreds of square miles outside Morecambe. It gets £63,295.67 from the county, but has spent £80,000 on equipment and £30,680 on casual staff—a loss of £48,385, or thereabouts.

The letter also challenges me:

“So I ask you Mr Morris, do you expect our street rangers, weeding service and events organisers”—

which I have found out cost £225,000—

“to provide their services for free”?

I expect value for money, and so does my community. Perhaps the Minister can ask for a list of who works at Morecambe Town Council in those and other categories, and whether they are politically aligned. Nobody seems to know, but if they are, this is potentially political parties being funded by the taxpayer, which is a potential electoral offence.

Having a special community action fund of £1 million last year, as I explained, on top of the precept itself is a clear breach of the precept rules. In plain speak, it is only supposed to be raised against a current service capacity of service provided. In this case, that has been expanded, with empire building on top of the running costs, which have come to a large amount, and a million quid on top of that. I challenge the town council to demonstrate to my community how it provides value for money when Morecambe now pays for the weeding service for literally hundreds of square miles outside the parameters of Morecambe.

Let us look at the town council’s budget: £1,000,195.70 was carried forward from last year. The general reserve for 2024-25 is £850,195.70, and £150,000 was used to bring down the precept by the amount of the proposed new council tax bill. Here is the real issue: the predicted expenditure is over £1 million—it is £1,164,680. Those are mind-blowing amounts. That is what they are spending, but the budgeted income is £63,295—and 67p, to be pedantic. The council tax precept is £951,384.33 from the taxpayer. That is a loss of £150,003—mind-blowing. It equates to a loss of—I have lost track of all the figures. It is just completely off the Richter scale. In reality, the council is giving back £150,000 to the taxpayer, lowering the council tax bill and losing an extra £150,000. That is not value for money. It serves only those who run to serve themselves on the council—not the taxpayer.

I am sorry if I seem a bit flustered, Sir Robert, but you can imagine that, with the figures I have had to go through, it has been extremely challenging, not only for me but for my community. I ask the Minister whether we can, ideally, freeze the council tax at the rate from before the 2023-24 hike—which was very high at that time—so that the whole £1 million can be paid back to Morecambe residents. I urge the town council to stop empire building at the expense of Morecambe residents. I had assurances of a meeting to discuss the matter with the Prime Minister a few months ago, and I will be petitioning Parliament with nearly 4,000 responses and concerns from my constituents very soon.

I want to know what the Government are going to do to stop my community being ripped off, and to stop Morecambe Town Council’s behaviour of hiking parish council tax, which is testing the system to destruction. Are there any plans to cap the rate at which parish councils can increase their precept without requiring a referendum? If Morecambe Town Council had carried out a referendum, it would not have been able to do this in the first place. Given that the whole community is against it, why did the council do it? I have also called for an investigation into parish councils by the external auditor, PKF Littlejohn. However, I fear it has no teeth to act—so what are the Government going to do to help with this matter?

There has been considerable media interest in this issue from the national and local media. We in this House must act in any capacity we have to stop this excuse for raising public funding from my community in Morecambe, seemingly to no benefit whatsoever, except to serve those who run the council. I apologise for being emotive about this, but it is a very serious issue for my community.

16:13

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Simon Hoare)]

It is a pleasure to serve under your chairmanship, Sir Robert. I will not begin my speech in the usual way, because it was announced in the last quarter of an hour or so that my very long-standing friend, the Member for Rochdale, Sir Tony Lloyd, has passed away. As, I think, the first Minister on his feet following that news, on behalf of the Government I want to extend to his very many friends, to his colleagues across the House and, of course, to his family our very deepest sympathy and condolences on Sir Tony's final loss of the battle against a cancer that dominated his life for the last 12 months.

I thank my hon. Friend the Member for Morecambe and Lunesdale (David Morris) for raising this important issue and for the way in which he has done it—with his customary thoughtfulness and attention to detail. Given that I have known him for eight and a half years, I would expect nothing less, and we heard it again this afternoon.

The backdrop to the debate is the increase in all the costs that families up and down the land face as a result of inflationary and other pressures, which have come to be known collectively as cost of living pressures. I am always keen to remind local government of its role in delivering important services to communities. The total burden of council tax—regardless of whether that includes a town or parish council precept, or is set by a district council—is used to pay for social care, police and so on, all of which comes to a considerable sum for very many people. Councils should always take into account its broader impact.

My hon. Friend has set out a scene in his town of Morecambe that certainly causes me concern. In broad terms, he raises several issues with regard to the overall governance of town and parish councils. We are very hot on governance with regard to this place, and very hot on governance issues when it comes to upper-tier authorities, boroughs and districts; historically, because town and parish councillors do not receive remuneration for their service, they are slightly off the grid. I have been considering the situation with representative bodies of the town and parish councils. He has given me food for thought, and I shall continue my deliberations.

My hon. Friend also raises a question to which I am afraid I do not have the answer, but I shall seek it back at the Department and, if he will allow me, write to him about the use of a precept for works outside the jurisdiction that is raising the precept as part of the council tax bill. I shall check on that and seek advice. Also, I do not believe that when a precept is raised by the considerable level that my hon. Friend has told the House about this afternoon, it can be used, by sleight of hand, to—I do not use this term in a pejorative sense—fill the coffers of a higher tax authority. The precept is the precept, as I understand it, and that precept belongs to the raising body, which in this case is Morecambe Town Council. I do not think that it can be transferred—that a vast sum of money raised for a specific reason in a one-off increase could suddenly be transposed into Lancaster City Council or Lancashire County Council’s budgets. I do not think that can be done, but I will check on that and revert on that point to my hon. Friend.

My hon. Friend has set out an issue of concern, but I would like to take this opportunity to acknowledge the work of the almost 9,000 town and parish councils across England, and the work that councillors do free, gratis and for nothing to improve the quality of life and wellbeing of their communities and to help create and maintain places where people are proud to live. They are often the unsung heroes of our local government family. They are close to the communities they serve, they know them and they play a vital role.

As my hon. Friend will be aware, council tax is set by local authorities, including town and parish councils, which will decide what level of council tax they need to raise, taking into account their individual circumstances. As he will know, the Government set referendum principles each year for principal authorities, to ensure that where they set excessive increases, they must be approved by local voters through a referendum, the rules of which are clearly set out. Those referendum principles strike a balance between giving councils flexibility to raise council tax to meet spending pressures without overburdening council tax payers.

For 2024-25, the Government have consulted on continuing our approach of not applying referendum principles to town and parish councils. That carve-out comes with a clear expectation that town and parish councils will take all available steps to mitigate the need for council tax increases, and that the Government will see clear evidence of that restraint. We would also expect authorities to take the resources that they already have available into account before setting increases.

None of that precludes a town or parish council raising money for a specific purpose. I can remember having served as a parish councillor in Oxfordshire. We had a one-off increase of some considerable percentage points to buy a parcel of land that had become available in order to extend a graveyard in the village. It was a one-off chance to do it and we grasped it. We consulted the village community, they saw the benefit of it, and that is what we did. We are not seeking to preclude or clamp down on initiatives by town and parish councils to help make their towns or parishes better.

The point that my hon. Friend has raised, as I understand the mathematics of it, is that last year Morecambe Town Council set a precept increase of £105.14 on the band D bill, which represents a fairly significant rise of 231% on the previous year. That was for the purpose of buying an asset, which my hon. Friend has advised was not on the market; whether it was on the market or not, however, the council has pulled away from that and decided not to buy it.

The question, therefore, has to be: what happens to the precept that the good burghers or Morecambe have paid, which is now sitting, at least notionally, on the balance sheet of Morecambe Town Council? Well, my hunch would be that, if it is not able to pay it back—I think that trying to work out each household’s bill and whether the person who paid the precept is still in the house, as they may have died or moved, could be extremely onerous administratively and possibly counterproductive —it does not take huge genius to think that one could bank that money and explain that the town council precept would be frozen to the point of zero, until that exceptional nest egg accrued from that large 231% increase had been spent.

[David Morris]

The precept was raised last year by a certain amount, but then there was the special amount as well; in other words, there were two precepts. That is what happened, and the £1 million precept has just been set to one side and carried forward this year. There was an increase in the precept itself, which is very hard to explain because it has all been mixed together, but there was a separate precept for this £1 million to buy the land that was not for sale.

[Simon Hoare]

I am grateful to my hon. Friend for that clarification. I think, given the fact that there now appears to have been two precept streams, one of which could be described as an extraordinary precept for a specific purpose, I would certainly be suggesting to Morecambe Town Council that the precept there—the element of the precept for the 2024-25 council tax year—be frozen to zero, because clearly it has significant resources still in the coffers. I will also tell my hon. Friend that I shall be writing to the town clerk of Morecambe Town Council to get a much clearer picture of the history of this activity and of what the council is proposing to do with what anybody would describe as a fairly large slug of money sitting in the accounts which was raised for a specific purpose that has become obsolete because the opportunity to purchase has been changed.

This case speaks to an important point about transparency and accountability. It is so important to ensure that all of our councils, irrespective of the level they are operating at, are accountable—principally and primarily accountable to their electorates and the communities they serve. There is no greater need for transparency than in the use of income raised from council tax. Town and parish councils must comply with the requirements of transparency legislation, just like the principal authorities. I highlight to my hon. Friend the local government transparency code 2015, which requires all local authorities with annual income or expenditure exceeding £200,000 to publish all payments exceeding £500 in value and all payments made via a government procurement card. It is also mandatory for parish councils with sufficient turnover to meet the requirements of the code. Of course, where there are concerns, we would recommend that the authority is contacted directly in the first instance. I know my hon. Friend has bent over backwards to try to secure some clarity regarding the numbers at hand.

We support, champion and applaud the work that town and parish councils do up and down the land. When setting council tax and precept, we expect the sector to show restraint and to be able to justify increases to those they expect to pay it. We reserve the right to introduce referenda principles for them should they breach that restraint. Our 2016 consultation on the topic made that position clear, as does our stipulation in the recent consultation on the provisional settlement. The Government and I will keep this under review, and action will be taken if necessary.

We believe that our current approach is the right one, but we are always open to change when or if the canon of evidence persuades us that that is the right thing to do. My hon. Friend the Member for Morecambe and Lunesdale has, if I may put it in these terms, shone a light on a rather cloudy story—one that requires further investigation. As I say, I shall revert to my hon. Friend on the two technical points. I shall contact the clerk of the town council with some degree of urgency—certainly before the precepts are set and the council tax bills are issued—to try to finally get to the bottom of this issue, which has clearly concerned my hon. Friend to the extent that he has raised this with the Prime Minister and also here this afternoon. It is also clearly causing much distress and concern to the many residents who have the great luck to live in Morecambe, but who are not so lucky to pay such an enormous town council precept.

Question put and agreed to.

16:26

Sitting suspended.