Anne-Marie Trevelyan, MP for Berwick-upon-Tweed, has questioned a senior Government official about Northumberland County Council’s large-scale borrowing to fund projects.
The MP, a member of the House of Commons’ Public Accounts Select Committee which scrutinises Government spending across all departments, questioned the Permanent Secretary of the Department for Communities and Local Government, Melanie Dawes, during an evidence session in Parliament yesterday. The session formed part of the Committee’s inquiry into the financial sustainability of local authorities and Mrs Trevelyan used it as an opportunity to raise local concerns about the Council’s spending.
Mrs Trevelyan explained to Ms Dawes that the rural nature and sparse population of rural Northumberland means the Council takes in less in council tax revenue than other areas, yet provision of services is more expensive in rural areas. Mrs Trevelyan raised concerns that the possible risks of borrowing will be disproportionately borne by her constituents:
“On that point, Ms Dawes, Northumberland, my council, is concerned about its sustainability because we have a relatively low council tax base. It relies on my voters in north Northumberland who are reliable council tax payers, but we cannot really rely in the medium term on an increasing council tax base coming from some of the poorer parts of Northumberland. It [the Council] has been borrowing heavily… to try to broaden the business base with a view to the business rates filling what it can see will be a substantial gap in the balance of payments. That concerns my taxpayers particularly, because if one of the business decisions goes wrong, they feel they will be the ones who will have to pick up the tab.”
Anne-Marie was keen to stress the importance of Government oversight of councils that may be making short-term financing decisions which might have long-term repercussions: “How can north Northumberland residents feel any confidence that the Department will be there with oversight in case the council is making risky decisions with the view of trying to fill what they consider will be a black hole in ongoing funding streams?”
Ms Dawes told the cross-party group of MPs that ultimately, it is for local councils to make these decisions, with the knowledge that local residents can vote to remove a council administration in the event that poor financial management results in a council tax increase.
You can find out more about the Public Accounts Committee Inquiry, and read the full transcript, by clicking HERE.