By Richard Johnstone | 28 August 2014
Parish councils and the Local Government Association are to work together to develop community benefit schemes to manage the locally retained revenues from fracking for shale gas.
Jonathan Owen, chief executive of the National Association of Local Councils, told Public Finance that parishes must be included in any funding agreements reached following the government’s launch of a licensing programme for extraction in July.
The LGA has already called for communities in areas where councils approve the extraction of shale gas to receive up to 10% of the revenue to mitigate the adverse impacts from fracking. This is up from the 1% that the industry has so far committed to give to local people.
Community benefits should also be mandatory and enforceable by law, the umbrella group of councils said.
Owen told PF that parishes also wanted a contribution to the local community that reflected the profitability of the industry, adding that 10% ‘wouldn’t sound outside the order of things’.
The NALC and the LGA would work together to develop plans to submit to government on how community benefit schemes could work.
Parishes must have a key role in ensuring that the funds are spent on local priorities, he added. ‘We want to have a united front on this one so we will be speaking to the LGA to explore how we can move this forward together.
‘We are intending to get a discussion around this subject at the next meeting of the Local Democracy All-Party Parliamentary Group in October. We want to get a number of key players together to talk through how any scheme could operate.’
As part of proposals to be worked up this autumn, Owen also said discussions were needed on how the money would be treated for accounting purposes – either as recurring revenue or as one-off use of an asset. ‘I think that would be an issue that we might well want to talk about with the government,’ he added.
