Agenda item

Brexit - New Burdens and Fiscal Impacts

Minutes:

Councillor Peter Smith (Deputy Leader), Andrew Hardingham (Service Director for Finance) and Kevin McKenzie (Policy and Intelligence Advisor) presented the Brexit New Burdens and Fiscal Impacts report which highlighted the following key points –

   

(a)

a new burden was defined as any policy or initiative which increased the cost of providing local authority services such as the transfer of a function from central to local government;

 

 

(b)

services of the Council which were included in the scope of new burdens included -

 

 

 

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Environmental Health (additional resources at Millbay ferry terminal, in order to discharge the Council’s Port Authority role);

 

 

 

 

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Trading Standards (a range of impacts on advisory and enforcement roles);

 

 

 

(c)

in 2018/19, a grant had been received from the Government of £104,958 which had not met the Council’s Brexit preparation costs of over £300,000; in 2019/20 the Council had received a Government grant for £209,968 which would not cover its preparation costs;

 

 

(d)

the fiscal impact could include the following -

 

 

 

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net payments to the EU budget currently amounted to 0.4% of UK gross domestic product (GDP); these payments could be redirected to fund increased UK public spending, although the UK may be required to continue to contribute to the EU budget, in return for a closer relationship;

 

 

 

 

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details of the UK Shared Prosperity Fund were yet to be published by the Government; (the Government had guaranteed to underwrite EU funded schemes which were due to be delivered by December 2020);

 

 

 

 

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structural unemployment was anticipated due to the displacement of people from negatively impacted industries (this could lead to a skills shortage in industries that experienced growth);

 

 

 

(e)

Brexit would impose new burdens, some of which would be temporary others would have longer term budget pressures; some additional funding had been made available through various Government departments but this funding had not covered the Council’s costs;

 

 

(f)

many of the fiscal impacts would not be within the scope of the new burdens doctrine; Central Government was operating on a presumption of the resilience of local authorities to economic shocks.

       

The key areas of questioning from Members related to –

 

(g)

whether there was an update relating to the city being designated as a Border Inspection Post;

 

 

 

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in response: the Council was currently developing a programme which included a number of priorities to be delivered over the next year, one of the priorities was the designation of Plymouth as a Border Inspection Post;

 

 

 

(h)    

what measures were the Council putting in place to mitigate the risk of the UK leaving the EU without a trade deal in place by December 2020;

 

 

 

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in response: one of the priorities of the programme would be to keep under review a no deal scenario, in the event that a trade deal could not be secured with the EU;

 

 

 

(i)

the measures being taken by the Council to gain clarification from the Government on outstanding issues;

 

 

 

 

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in response: the Committee was assured that officers led by the Assistant Chief Executive were lobbying the Government to seek clarification on a range of issues;

 

 

 

(j)

the need for Plymouth to have an unique business case which identified the prevalent issues in the city, in order to differentiate it from other cities, thus enabling it to be more effective in lobbying the Government for additional funding;

 

 

 

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in response: the suggestion of drafting an unique business case for the city with a focus on building a stronger economy in the longer term was welcomed;

 

 

(i)

whether the Government would assist the Council to negate the risk of Brexit having a detrimental impact on the city;

 

 

 

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in response: it was anticipated that the Council would need additional funding in order to negate the impact of Brexit on the city.

 

The Committee agreed that -

    

(1)

the Cabinet ensures that the Council is well prepared for a dialogue with  Government regarding the scope and extent of new burdens and the UK Shared Prosperity Fund (UK SPF), as well as other consultations;

 

 

(2)

a business case, identifying the issues that were prevalent to the city is drafted (in order to differentiate Plymouth from other cities) to enable more effective lobbying Government for additional funding.

                  

Supporting documents: