Government to investigate £1m 'Frontierland tax' as MP accuses Morecambe Town Council of breaking the rules

Morecambe MP David Morris raised a host of questions and allegations about Morecambe Town Council with a government representative at Westminster on Wednesday evening.

Mr Morris said Morecambe Town Council raised its precept tax by 231 per cent last year, in effect raising £1m for a community fund with an aim of buying land once home to the former Frontierland theme park.

“The land is already owned by Lancaster City Council,” he said. “It is not for sale and is unlikely to be sold. But this has doubled the taxation of Morecambe residents. Morecambe Town Council, I understand, also engaged architects for the site that is not for sale.

“The town council then made a U-turn last year. It decided to withdraw its expression of interest [for the Frontierland site] but left the £1m still in its coffers."

Overall, the whole situation was “staggering”, he said.

Mr Morris said no other public organisations which provide services can create such increases apparently unopposed, questioning whether the precept situation was lawful.

“Having a special community action fund of £1m last year, as I explained, on top of the precept itself, is a clear breach of the precept rules,” he said. “In plain speak, it is only supposed to be raised against a current service capacity of service provided. In this case, that has been expanded, with empire building on top of the running costs, which have come to a large amount, and a million quid on top of that.

“I have no political interest in Morecambe Town Council. Conservatives do not field candidates in its elections. Thankfully, I have not got a Morecambe Town Council bill because I live one street beyond its area.”

Lancaster City Council has the official task of collecting the town council’s precept, along with Lancashire County Council, fire and police precepts, in its overall council tax billing role, but it has no say in what precept is set by the town council.

Mr Morris understood the city council had said there was currently no arrangement to simply return the Morecambe precept money back to Morecambe taxpayers, and questioned if there are other methods to reimburse residents.

“I wonder if we can freeze the precept this year?” he said, “or get to the lower levels it was in the past? The Morecambe precept had already risen in previous years before last year’s big rise.

“I urge Morecambe Town Council to stop empire building. I was reassured I can have a meeting with the Prime Minister on this. I want to know the government is going to stop my community being ripped off. ”

Simon Hoare, Parliamentary Under-Secretary of State for Levelling-Up, Housing and Communities, said he would look into the various allegations.

He said many parish and town councils did good work, and felt current laws were generally good. Precept and council tax laws aimed to allow councils opportunities to raise cash for good projects.

Mr Hoare added: “This seems to be a fairly large amount of money sitting in its coffers, but the purpose has become obsolete. We also expect the sector to show restraint and to justify increases for those people expected to pay.

“It’s very important that councillors are accountable. And there is no greater need for transparency and accountability than with finance. Councils must comply. This has shone a light onto a rather cloudy story which requires clarification.

“This is clearly causing distress to people who are fortunate enough to live in Morecambe but unfortunately face this precept.”

He added: “The question is what happens to the precept that the good burghers of Morecambe have paid, which is now sitting, at least notionally, on the balance sheet of Morecambe Town Council? My hunch would be that, if it is not able to pay it back, I think that trying to work out each household’s bill and whether the person who paid the precept is still in the house, as they may have died or moved, could be extremely onerous administratively and possibly counterproductive.

"It does not take huge genius to think that one could bank that money and explain that the town council precept would be frozen to the point of zero, until that exceptional nest egg accrued from that large 231 per cent increase had been spent.”

Morecambe Town Council is due to meet today, Thursday, with the Frontierland plans on the agenda.

A summary states: “Morecambe Town Council is confident it can deliver a balanced budget whilst providing a year-on-year saving for its residents through a reduction in the precept of £48.69 (33 per cent), rolling back 47.7 per cent of last year’s increase.”

A Morecambe Town Council spokesperson said: “Last year Morecambe Town Council invited Mr Morris to come and discuss its ongoing funding and the issues facing the town and parish council sector more generally. The Governments focus on localism continues to place further burden and expectation on those councils to deliver increased services while other tiers of local authority are facing repeated cuts in central government funding (for example, our principal authority, Lancaster City Council, has experienced a 40% cut in funding since 2008-09.). To date the council has not received a response, but it extends that invitation publicly once again.

“In direct response to Mr Morris’s statement: the reason for such a substantial rise last year was solely to create the Community Action Fund for a potential community project on the former Frontierland site. Following council elections in May 2023, a new administration with an alternative vision entered post and resolved not to proceed with that particular project. With the reason for raising those funds no longer applicable, the council was advised by the National Association of Local Councils that it was reasonable to reallocate funds and – having conducted a public consultation ahead of the original project – that it would be sensible to consult the public again ahead of any significant expenditure of those funds.

“The money is still there and has not been spent. If the budget is approved, part of it is to be returned to ratepayers via a reduction in the precept. The remainder is to be held in reserves, which councils are obliged to retain to adhere to the legislative framework against which they are held accountable by an exernal auditor appointed by the SAAA – an organisation set up by the Government’s Department for Communities and Local Government. To call this financial mismanagement is completely misleading – it's financial responsibility.

“It is important to note that if the precept hadn’t been raised for the Community Action Fund, residents would still have seen a significant rise in last year’s precept to account for the growth of the council’s services.

“The proposed total precept this year is at a level that is by no means unusual across the country, with 683 other councils collecting a comparable or greater amount in 2023-24. The proposed precept still works out as £24.20 less per Band D property than the national average for councils collecting a similar total precept.

“In terms of services, this budget looks to build on the success and positive response to the work of the town rangers, aiming to further improve delivery for ongoing public realm enhancements, whilst prioritising pavements and alleyways to ensure open spaces are cleaner and safer for all.

“Morecambe has a thriving festivals and events scene and a wonderful culture of proactive community groups which the council is proud to support. The proposed increase in grant funding available this year – totalling £60,000 for festivals and events and £35,000 for community grants – will allow the council to provide vital assistance to more of these local organisations, helping to alleviate their financial pressures and enabling them to focus on delivering essential services and projects to residents at a hyper-local level.

“Morecambe Town Council is proud to invest in Morecambe, proud of its track record of delivery in Morecambe, and will always make sure money collected locally is used to make a significant difference to local people.”