Newham’s special purpose vehicle, council expenditure, pay rises not certain, enterprise zone jobs boost

Pension special purpose vehicle to go ahead in Newham
Newham Council’s cabinet has rejected a call by its overview and scrutiny committee to halt spending on a new special purpose company to reduce the revenue impact of its pension fund liabilities. The committee said that the proposal to release funds of up to £500,000 to develop the proposal should not go ahead until considered by the investment and accounts committee (IAC). In response to the request for further scrutiny, councillor Lester Hudson, cabinet member for finance and project delivery, and Deborah Hindson, managing director at OneSource, a back office services company owned jointly by the council, said: “The cabinet had to agree the release of funding not just for scoping the proposal but to enable the procurement of the appropriate legal and financial advice. The plan is to develop proposal in more detail precisely so that the IAC can take its own informed decision in October.”

Expenditure by councils falls
Total revenue expenditure by local authorities in England was £95.8bn in 2014-15, a decrease of 0.7% from £96.4bn in 2013-14, according to figures released by the Department for Communities and Local Government. In 2014-15 local authorities added £1bn to their reserves, compared to £2.4bn the previous year.

Some council staff ‘might not receive pay rise’
Council staff will not necessarily be entitled to an expected 1% pay rise, it has emerged. In July, chancellor George Osborne announced a 1% rise in public sector pay awards for the next four years. But a letter from chief secretary to the Treasury Greg Hands, to public service pay boards, said that rises could be targeted to address retention and recruitment issues.
Unison general secretary Dave Prentis said: “It is clear from this letter that the government’s promise of a 1% pay rise for public sector workers was all smoke and mirrors.”

Opinion split on Scottish local tax reform
More than two thirds of responses to a consultation on local tax reform in Scotland said that council tax is unfair. The Commission was established jointly by the Scottish Government and Convention of Scottish Local Authorities and this week published more than 200 responses. There was less agreement on the best way of achieving reform, with opinion split between a reformed local property tax, a local income tax and land value tax.

Enterprise zones ‘provide jobs boost’
Enterprise zones have attracted £2.2bn of private investment from 500 new businesses, the government claimed this week. The government launched the zones in April 2012, offering tax breaks, simplified planning and high speed broadband, since when 24 have been created. The government said that more than 19,000 jobs have been created in the zones.