The truths and realities about your council’s budget

moneyOver the past few weeks the protests against cuts to council services have grown as we head towards the meeting to set our budget on February 25th. From day care centres to animal welfare, park rangers to parking fees, there have been many voices raised, understandably, in defence of individual services.

We have succeeded in minimizing the cuts to the park rangers, protecting community group funding, supported bus routes and the times of the older peoples bus pass. We are working to keep services going either in-house or via other means such as voluntary and community groups, cooperatives or merged services. I’ve set up our City Innovation Challenge inviting anyone to submit ideas on how we can do that; there is still time to enter and successful ideas will be used in our four-year budget.

However, the reality is that no organisation can lose 30% of its funding and continue to provide the same services. No private company, no matter how efficient, could absorb the loss of £25 million a year without making cuts.

We are working hard to replace that lost income through new sources of revenue such as retail rents, commercial waste collection and more, but we are at heart a public service, not a profit making company and could never recoup that loss.

And no we don’t make a profit from parking charges. The £9 million surplus we get from parking goes almost entirely to pay for the cost of providing free bus passes for older people and supported bus routes, and we are increasing parking charges by only 2% this year in most cases.

Added to the complete cut of our £140m revenue grant by the Government, the costs of providing care and protection services for older people, vulnerable children and people with disabilities is increasing by more than 3% a year. It is by far the largest part of our budget already and by 2020 will use almost all of our annual funding. The Government has said that you must pay for these increasing costs through an extra 2% increase in your council tax, though that alone will not be enough to close the gap.

We are asking officers and staff to undertake the incredibly difficult task of trying to manage the growing demand for care services. However we have been warned that if we do not make savings, then further cuts could put the safe delivery of services at risk. We’ve seen elsewhere the tragic and appalling consequences of that happening, and we must not risk that here.

The Government has said we should use reserves and capital funding to meet our service costs, and of course where we can use buildings to raise funds from commercial rents, or build homes that grow our council tax base, we will. Of course you can’t pay for day to day services from the one-off sale of assets, just as you can’t replace your salary with the money you get from selling your car.

Some argue we should be more efficient, and they are right. We took over the running of the city council last May and soon found we were facing an overspend of around £8 million in this financial year. Through the hard work of our senior officers we’ve taken some tough decisions, and balanced the budget.

Some say we should cut the costs of senior management and councillors. We are and we will; a reduction of just under £2 million in management costs are set out in the Budget, and we have already taken tens of thousands out of the councillor allowances budget.

Some argue that we should refuse to implement the cuts. That would mean spending more than we have coming in, running up a deficit and not setting a lawful budget. That would lead to the Government stepping in to take over the running, or more likely the total dismantling, of our council and local services. I’m not prepared to let that happen.

Some say this is just politics, and that Labour councils will always complain about Tory cuts. Yet now we are seeing Conservative council leaders from across the south east complaining bitterly about cuts to their funding too. The Conservative-led Local Government Association warned this week that councils “will have insufficient resources to fund services.” 

True-blue authorities like West Sussex, who have frozen council tax for years, will be putting forward 4% increases just as we will. We don’t do so willingly, council tax impacts disproportionately on people with lower incomes, but if we don’t we’d have to make another £4 million in cuts to your services.

These are the facts and the realities behind the campaigns and the headlines, these are the immensely difficult challenges we face as a council and as a city. I and my team are up for that challenge if we can count on your support.

 

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2 thoughts on “The truths and realities about your council’s budget

  1. Is Bennet right?
    dermot

    Councils have a choice: no cuts to jobs or services

    Councillor Kevin Bennett, Trade Unionist and Socialist Coalition, Warrington Borough Council

    Councillors in local government do have the power to resist the government cuts. The notion that ‘there is nothing else we can do’ is wrong.

    Labour councils around the country are passing their budgets for 2015-16. But they seem to have forgotten their supposed core values: to protect jobs, services, housing and other amenities for workers and residents.

    Councils have the legal and financial powers to delay cuts by drawing on reserves, using borrowing powers, and working with tenants and trade unions to avoid evictions and privatisation. This can all be done within the law and cannot be overruled by central government.

    None of these policies mean setting a deficit budget, though that in itself is not necessarily illegal.

    Reserves
    It’s true that some smaller councils don’t have large reserves, but the bigger ones do. The combined reserves Labour councils are holding are enough to set no-cuts budgets in them all.

    Funding for local councils will have dropped this year by 37% in real terms compared to 2010. But English councils still control budgets totalling £114 billion pounds, over one fifth of all public spending. They have responsibility for adult social care, housing, education support, transport, recycling and rubbish collection, libraries and other services.

    That’s a powerful position from which to organise a fightback.

    What is to stop Labour councils coming together, pooling reserves and using prudential borrowing powers? Collectively they could refuse to implement a single further cut, creating space to organise a mass campaign to win the necessary funding back from central government.

    1. No. Reserves have to be paid back, and we have very small and allocated reserves to cover real risks. Rich Tory shires are never going to pool budgets with Labour cities. It would be a gift to the Tories to do it, a trap that would allow them to strip out local democracy. Corbyn, McDonnell and Trickery know that which is why they don’t support this strategy.

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