A member of the public asks why South Hams District Council are considering merging with West Devon when a lower council tax rise would solve the funding problem.

UPDATE: A week after the meeting, Cllr Simon Wright sent us a statement explaining the issues with holding a referendum. Cllr Wright, deputy leader of South Hams District Council said: “Throughout the One Council consultation many people have asked us if we could hold a referendum to increase council tax just for South Hams residents. "They have asked this question believing that a smaller increase to the council tax in South Hams would close South Hams budget gap in 2020/2021, without the need to create a new council.“Let us explain why we believe this is not an option for us. If South Hams District Council wanted to increase council tax by more than £5 or two per cent a year, we would have to hold a referendum. "There are very clear rules that are laid out for how a referendum on Council Tax must be conducted for example, we cannot offer an option to vote for different levels of increase."Holding a referendum would cost the council approximately £130,000 and there would also be re-billing costs of a further £50,000 if the result of the referendum was a ‘No’ vote. "The Council has to initially bill its council taxpayers the higher amount and then if the result of the referendum was a ‘No’ vote, the Council would have to issue new council tax bills for the lower amount and offer refunds of the difference."Any increase would have to take place in one hit and could not be phased in over a number of years. The only way to phase in a council tax increase of more than £5 or two per cent a year would be to hold a referendum every year.“The referendum question must be: “Do you agree with X’s decision to increase the amount it charges by X?” and the majority of the electorate would have to answer yes for the increase to take place. There are no other authorities that we know of, who have successfully held a referendum to increase council tax. “Therefore, we believe that holding a referendum in South Hams to increase Council Tax is a very risky strategy that is likely to cost us a lot of money and not get the outcome we desire, which is to close the budget gap, protect frontline services and protect the £3 million of savings we make every year by working with West Devon.”Continued:Derek Wearing attended the Coleridge Group meeting at Stokenham Village Hall on Thursday, September 28, where leader of SHDC Cllr John Tucker and deputy leader Cllr Simon Wright were invited to put their case for the merging of the councils.

He asked: “As I understand your website, the shortfall in funding this year is £800,000 roughly, your revenue for the same time is about £8 million. So in order to fill that shortfall you need approximately a ten per cent increase in your revenue.

“Currently, the element of the council tax that we pay that goes to South Hams is, on average so probably a Band D, is £155. So in other words, if you increase that by ten per cent, we will not have a deficit any longer.”

Cllr Tucker responded, saying: “Council tax is only a part of our income stream. It used to be about a third, now its roughly half. So we’d have to increase it significantly more, because we can’t increase the rents.”

Mr Weaving countered, saying: “So instead of finding another £15 on the council tax, you need to find £30 on the council tax, in the worst case, if you can’t increase revenue from anywhere else. So that would get rid of our deficit and we’re doing OK, we don’t need to find any more savings.

“But the difference in council tax between us and West Devon is £63. Twice that. So in other words, to get rid of our deficit we need to increase council tax by £30, but what you want us to do is to join up with West Devon and increase it by £63. ?“In other words, that extra £33 will not do us any good, it will help bail out West Devon.”

Cllr Tucker then said that council tax cannot be increased by more than £5.

Piers Spencer, Stokenham Parish Council, interrupted, saying: “Unless of course we the extremely irregular method by joining with West Devon and putting it up by £63.”

Cllr Tucker said: “The Government would have to pass an Act of Parliament to do that.

Cllr Spencer than asked: “What is the relationship between this consultation and your decision, because I don’t see one.

“This consultation looks very much like lots of other ‘consultations’ we’ve had in the past, where we all sit round in a room and talk about stuff and then you just go ahead and do whatever you were going to do anyway.”

Cllr Wright argued that the problem being that “we’re joined anyway”, to which Me Weaving said “no you’re not, you can un-join”.

Cllr Wright said: “We know the cost is going to be near £3million to un-share. This proposal we are absolutely, cast iron certain, will save us half a million.” But Mr Weaving pointed out “Yes by charging the tax payer an extra £62 on average, when all they have to pay in the worst case is £30 to get rid of the deficit.”

Cllr Wright said: “Local government finances are very iffy at the moment. We were promised 100 per cent business rates, conveniently, it was not in the Queen’s Speech.”

Mr Weaving then said: “The only way you can [increase the council tax by more than two per cent or more than £5] is to form a unitary council and increase it by £63. This is just a pretext to get around the £5 rule.”

Cllr Tucker said that over the last twelve months, they have looked at three other options before the proposal to merge. One was the formation of a Local Authority Controlled Company, which cost £101,000 before the idea was scrapped, the second was the Green Waste was looked at, as well as commercial investments.

Mr Weaving then said: “I think I understood that you could raise the council tax more than two per cent if you hold a referendum, is that correct?” Cllr Tucker said yes.

“So why don’t you hold a referendum?” Mr Weaving asked to agreement from others in the room, “with two questions, one would be ‘Would you like to increase your council tax by £30’ or ‘via by combining with West Devon, in which case it would be £60’? They’re fundamentally important questions. That’s our money your thinking about.”

Cllr Tucker said: “Its difficult to get the MPs to do anything in parliament, they don’t take a blind bit of notice of people like us. We’ve got to get permission to have a referendum and all the signs show they won’t.”

Someone asked “Why the rush?” Cllr Tucker said that if we don’t do it now, the Secretary of State will not look at the decision again until 2023, because they’re “tied up with Brexit”.

A show of hands at the end of the meeting showed that those attending were unanimously opposed to the proposal.

The Coleridge Group is the group of Stoke Fleming, Strete, Blackawton, East Allington, Slapton, Stokenham, Frogmore & Sherford, Charleton, South Pool, East Portlemouth and Chivelstone parish councils, based on an ancient collection of parishes known as the Coleridge 100 group.

You can watch the video of the full meeting below and have your say here: www.onecouncil.org.uk