This year's budget

Labour Group Budget Statement Feb 26th 2018

This year our group are not presenting an alternative budget. We are presenting a statement which seeks to do three things.

  • A commentary on the budget before us.
  • An alternative view of how we should be addressing the finances of this authority. 
  • A vision of how things can be done differently.

The commentary is our view on the deliverability and the impact of the budget you propose to set. The other offers up alternatives for you to consider, if not now, then in the future.

Commentary on the budget

We are living in tough times with a government seeking to shrink the local state, cap local government resources, and prevent us from exercising much income generation power. Yet we are seeing our town grow faster than any other in the UK, with an increasingly elderly population, a hugely increasing demand, for housing and other services.

We are witnessing a melt down at the County. A combination of Government austerity measures and financial mismanagement has brought the county to its knees. We need to learn lessons from what has happened there.

There are indications that this authority is going down the same path as the county. Our accounts have still not been signed off by the external auditors. We were given an adverse judgement for Value for Money last year. We still have the missing millions to pay back. We still have too many interims, too many vacancies where we need expertise and commitment, we are using reserves to balance the budget.

We agree with the proposed rate of Council Tax increase. Residents of the town are telling us they would rather pay more for essential services but the deal is that the rate of increase has to be proportionate and the services excellent.

The parking proposal will raise revenue, increase pollution and does not guarantee footfall.

More needs to be done to provide an integrated transport service.

 

At a time of growth and increased demand our budget is shrinking. There is too little provision in the budget for growth in income, income generation. This is not a sustainable position.The new contract for Environmental Services , contracted to a private provider  over ten years, is eye wateringly expensive. In year one this is almost 43% of our total revenue budget. The percentage is set to rise as inflation rises. This is not a sustainable position.

The budget is being balanced by using a forecast reduction in staffing of £350,000. £320,000 is an assumption of savings made through service redesign. Our new CEO may have other ideas. He may understand that in a situation of growth and increasing demand we need more not less staff. We need permanent not interim staff. We need properly paid qualified staff, not consultants on inflated daily rates. This budget proposal is high risk and may not be deliverable.

£30,000 is a cut to the Guildhall staff under the heading of events. The Guildhall is our most treasured asset. We should be making money from events. Instead we have outsourced catering and the bar so private companies take the profit while we set up for them, clear up after them and just about break even or at best make a small profit. This is deliverable but it is not sustainable.

In order to deliver the growth we need, we have to have a strong and robust partnerships with other districts and Boroughs and above all else with the voluntary sector. Yet your budget is cutting the budget for the voluntary sector by £94,000 and redirecting another £70,000 for the Cabinet to spend. What is going on here? These proposals may well be deliverable but they are creating an unsustainable situation for our voluntary sector and our communities.

£18,000 is being cut from Bloom.  This rather begs the question of what the total bill for Bloom is? Was anyone else embarrassed with Bloom this year? All the valiant work by communities and by our staff with wonderful displays,  but in a context of filthy, littered streets,  knee high weeds, and choking gutters. Perhaps this all needs a serious rethink.

Doing the budget differently

Labour would approach the budget quite differently. First we would zero base all budgets to get an understanding of need and the cost of meeting need. Second we would apply Smart Budgeting principles. This is an efficient use of budgets  pooled across departments for particular outcomes,  avoiding duplication and producing savings. Third, we would be looking for growth through a number of ethical commercial opportunities. This would mean having a robust investment strategy to include selling assets that cannot be exploited, exploiting assets where we can, joint commercial enterprises with other authorities, joint projects with the voluntary sector and if appropriate,  private sector partners, and selling what we do well to other organisations.

Leeds has commercialised what it provides in house and is already good at.  This City sells it’s services in catering, cleaning, property maintenance, fleet management, legal services, business support to other organisations such as the NHS, the Ambulance service and other LAs.

Many LAs are turning to commercial enterprise to raise revenue. Corby has a factory in Derby that they are already making an income from. Corby with Kettering are investing £20m a year for three years to develop warehousing and have in the first year made £650,000.

Changing our Practice

As County services contract, as life gets harder for our communities in the urban areas and in the rural areas, we need a rethink about how we deliver services. We need to put people and families at the heart of what we do.

Neighbourhood infrastructure is key. We should buildsocial capital in our neighbourhoods so our residents can look after themselves for longer and look after each other. But this comes at a cost. We need to bring back Neighbourhood Co-ordinators, increase the number of wardens and develop outreach services. We need to work more closely with the voluntary sector, with health, the police and other agencies.

The One Stop shop is brilliant, but it’s no good to a single parent in Briar Hill or the Eastern district with no transport and no childcare. I estimate that putting this in place in just one area as a pilot would cost around £120,000 in the first year- less than the cost of one consultant on working 4 days a week  for 6 months. (125,472). A good coordinator-as we know- having employed them in the past, is able to bring in new money and cover their own costs over time. So the cost of Neighbourhood working would decrease over time while the value would go up.

Robust Neighbourhood working would have a strategic development function with multi agency partnerships. The help and support that they can put into neighbourhoods will reduce demand, further down the line, for expensive and scarce resources. Those partnerships are then able to co design and co deliver services, an efficient and effective way of providing and attract new money from Big Capital and Social Investment bonds.

It was agreed at Cabinet to develop a three pronged strategy for housing development in the Borough. It is an approach the Labour group wholeheartedly endorse. This is about us building for mixed tenure to provide for diverse needs. In our view we need to be bolder and set our sights on building more than 100 homes a year. It should be at least 200, half of which should be social housing.

We need to look to other LAs for good practise. Electric Corby has won awards for its work to deliver a greener more sustainable town. Working with local businesses to reduce its Carbon footprint by 50% it has provided jobs, energy efficiencies and saved £1000s.

86% of businesses in the town are SMES, many with a turnover of less than £50,000 a year.

They need our help to start up, to cut costs, to be sustainable.

In summary, our view is that this budget is a high risk. It does not tell us what the real costs of services are, what the demand is and is forecast to be. It is not providing a strategy for real growth. We recommend an alternative approach that puts people and families at the heart of all we do. We need to zero base our budgets. A budget that is evidence led and outcome focused. That looks to build revenue, brings in new money and builds social capital.Just to underline what I am saying I am going to quote from two organisations that support Local Authorities.

 A report by Localis published in 2015 talks about the rise of entrepreneurialism in Local government

Launching the report, Alex Thomson, chief executive of Localis said:
Councils have borne the brunt of austerity, but they have responded with striking innovation to minimise the impact of cuts on their residents. In particular, our research shows councils becoming ever more commercially savvy, bringing in money to support vital local services.”

The Local Government Association offers for support to councils wanting to grow to meet demand and they say:-  As funding shrinks exploring new ways to maximise incomes is essential. In order to protect valuable frontline services and ensure positive outcomes for local communities councils are increasingly thinking through a more commercial approach to their activities.

These innovative councils are using their assets wisely, trading services with others across the public and private sectors, and selling commodities to generate income.

Shared Services-my view is that if an in house service for waste collection and environmental services was too risky, we should have shared the risk with other authorities and gone in with e.g. Corby and Kettering.

Other LAs are selling tree pruning and gardening services. Others, that manage their own waste collection services,  offer a commercial waste collection to businesses and raises considerable revenue. We have lost that opportunity by outsourcing our service. There are lots of opportunities if we think bigger, if we think how to exploit what we have, if we grow the talent and expertise of our staff.

Examples are -we bought Albion House and maybe we should sell it!

We sold Fish Street and maybe we should have developed that ourselves. We have sold buildings on Guildhall road. Maybe we should have been more business minded and sought to exploit those assets ourselves. With the future move of NPH from Westbridge and the possible relocation of the waste depot on the site, we have an opportunity to redevelop Westbridge to meet the need for light industrial units, to generate rents, rates and if we provide shared services, then charges for that.

We have lots of other opportunities-Greyfriars for example. I am glad that the use of this site is being reviewed and I hope that we will be at least a partner inn that development.

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