Rethinking precepts: striking a balance in challenging times 28/11/2023

Is keeping precepts low the best approach for our communities?  DALC explores the delicate balance between financial responsibility and investment in our communities.

In the scenic landscape of Devon, parish and town councils work diligently to shape the communities we call home. One prevailing motion that has persisted for years is the belief that councils must keep their precepts as low as possible. But is this the best approach for our beloved parishes?

What is a precept? In simple terms, a precept is the amount of money that a parish council raises through council tax to fund its operations and activities. For some councils, the precept is their only source of income. Keeping this precept as low as possible has been the mantra for many councils, often driven by a well-intentioned desire to ease the financial burden on residents. But in doing so, we may be limiting the potential for growth, improvement, and community development.

Let us explore a nuanced perspective that recognises the increasing financial pressures faced by principal authorities, the uncapped nature of parish precepts, and the benefits of investing in our communities.

Understanding the landscape

Principal councils (i.e. district and county councils) are confronting unprecedented financial pressures, often prompting calls for austerity and restrained spending. This may mean tough decisions being made about community assets and services which are currently delivered by those authorities, and a need to prioritise statutory functions over discretionary services.

In this context, parish councils may find themselves at a crossroads. The uncapped nature of parish precepts means they have the flexibility to generate revenue, to help support the continuation of services or protect community assets, but it also raises questions about how to strike the right balance between financial sustainability and meeting the evolving needs of local communities.

Investment in challenging times

While the pressure to keep precepts low remains, it is essential to recognise the value of investment. Rather than viewing precepts solely as a financial burden on residents, consider them as a means to secure the long-term well-being of our parishes. Investments in community resilience, quality of life, and social inclusion can contribute to a more vibrant and sustainable future.

Investing in our parishes can lead to various positive outcomes. Here are some examples to challenge the status-quo and consider investment:

  • Community Resilience: Communities that invest in local infrastructure, amenities, and support systems become more resilient. By allocating resources to projects like flood responses, community buildings, or youth programs, parish councils can ensure their communities are better equipped to handle challenges and crises.
  • Economy: Investing in tourism and cultural initiatives can stimulate economic growth within our parishes. Attractions such as museums or events such as fairs, carnivals, and community events, can support local businesses and attractions, and even create job opportunities.
  • Quality of Life: Funding for parks, green spaces, and recreational facilities enhances the quality of life for everyone in the parish. A thriving community is a more attractive place to live, which, in turn, can build a stronger sense of belonging, and pride of place.
  • Social inclusion: Support for vulnerable and marginalised members of the community through social programs and services can foster inclusivity and social cohesion. The bonds formed within a caring community are invaluable.
  • Long-term sustainability: When we think beyond the immediate future, investing in our parishes provides a solid foundation for future generations. Well-maintained infrastructure, social opportunities, and environmental stewardship leave a legacy of progress.

The question is not whether we should invest in our parishes (absolutely we should!) but how we can we do so responsibly.

Collaborative decision-making

Acknowledging the financial constraints faced by principal councils, parish councils should engage in open dialogues with their communities. Inclusive decision-making processes allow residents to voice their concerns, share insights, and collectively determine the priorities for investment. This collaborative approach provides a mandate to ensure that financial decisions align with the unique needs and challenges of each parish.

Responsible financial management

Recognising the financial pressures on principal councils, parish councils must still exercise prudent financial management. Transparent budgeting, cost-effectiveness, and exploring alternative funding sources can help strike a balance between addressing local needs and respecting the broader financial landscape.

Adapting to uncertainties

The uncapped nature of parish precepts offers a degree of financial autonomy, but it requires careful consideration in the face of economic uncertainties. Parish councils should remain agile, regularly reassessing their financial strategies and adapting to changing circumstances. This adaptability ensures that parishes can navigate challenges without compromising the well-being of their residents.

Final thoughts

DALC encourages a nuanced and adaptive approach to parish precepts. Recognising the financial pressures on principal councils, while also understanding the uncapped nature of parish precepts, allows for a more holistic perspective.

Let us challenge the preconception that lower precepts are always better for our parishes. By re-evaluating our priorities and understanding the long-term benefits of investment, we can hopefully strike a balance and ensure our parishes continue to thrive in years to come.

Are you new to council budgeting?

There are a range of resources to support councils with their budgeting and setting their precept: