3rd August
Tories are accused over costs claim
The Tories were last night accused of failing to do their sums after claiming that a North-East assembly would cost local taxpayers £22m a year.
Launching a summer campaign under the slogan "regional government is fat government", Shadow Regions Secretary Bernard Jenkin said devolution in Scotland, Wales and London had led to "soaring costs". But the Conservatives' estimate of a £22m "price tag" in the region is in fact lower than the Government's official figure of £25-£30m.
It also fails to take into account the potential saving of up to £14.4m a year from local government reorganisation in Durham and Northumberland that would follow a move to regional rule.
Council tax payers across the North-East will have to pay an extra £2.60 a year towards the assembly's running costs in the event of a `yes' vote in November's referendum.
But earlier this year, a Journal investigation found that the savings from the accompanying town hall shake-up could mean bills in some areas actually fall.
In Northumberland, the savings could range from £6.1m a year to £3.4m, depending on what option for local government reorganisation is adopted, reducing average bills by between £28.06 and £15.64.
Savings in Durham could range from £8.3m a year to £2.8m, bringing down average bills by between £58 and £18.
At the time, Deputy Prime Minister John Prescott's office confirmed that the savings "would be passed on to the taxpayer", although there would be "one off" costs associated with reorganisation, mainly in the form of redundancy payments.
Last night, an OPDM spokeswoman insisted that the Government's estimates of the assembly's running costs were "robust." "Far from being fat, elected regional assemblies will be small and streamlined," she said. "It is misleading to say that regional assemblies come with a large price tag. We have made no secret of the fact people in the region would make a small contribution," she added.
Professor John Tomaney, Chair of Yes 4 the North-East, said: "These sound like really dodgy figures. A regional assembly will bring substantial benefits to the region by spending money where it is most needed and much of the cost will be met by savings generated through the reorganisation of existing local government."
The Journal: Today's Voice of the North
Aug 3 2004
By The Journal
Consider the value as well
One of the most important aspects of the debate surrounding the proposed North-East Assembly is that of the cost to local taxpayers.
As we have stated previously, it is a matter of regret that Labour dumped its original 1997 manifesto pledge that regional assemblies would be introduced at "no extra cost".
The move to elected regional government should have been an opportunity to reduce, not add to, the bloated bureaucracy of quangos and agencies that run our region.
That said, the Government has at least been consistent in maintaining that the running costs of an assembly would be no more than £25m-£30m a year.
On this score, the Tories' latest contribution to the debate yesterday adds little to the sum of human knowledge.
Their figure of £22m is not only lower than the Government's estimate, it also fails to take into account the potential savings from local government reorganisation.
As The Journal reported earlier this year, the shake-up that would accompany regional rule would reduce the annual running costs of the region's town halls by up to £14.4m.
That would mean a net cost of around £10m a year for an assembly whose benefits to the region could far outweigh such a figure.
Earlier this year, Deputy Premier John Prescott said that the overall economic benefits to the Northern regions from regional government could be as high as £30bn.
While that figure would have to be revised in the light of the decision to postpone the referendums in the North-West and Yorkshire, it is still substantial.
Mr Prescott also hinted that an assembly would be able to renegotiate that iniquitous Barnett Formula which currently penalises this region to the tune of £291m a year.
It is impossible to look objectively at the issue of the cost of the proposed assembly without also considering its potential value.
It also should not be forgotten that 95pc of the assembly's £25m running costs would be met from general taxation.
Local council tax payers would pay only 5p in the pound or £2.60 a year - the price of a pint of beer in some of the region's more upmarket hostelries.
Yesterday's Tory dossier on the costs of regional assemblies featured on its cover a picture of the Deputy Prime Minister and the slogan: "Regional government is fat government".
It is an indication of the lack of real content in the document that they should find it necessary to stoop to such a tacky personal attack.
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