In shock news today I have found out that the “money that the council has available to spend on its services” will rise by 2.7% this financial year compared to last. This does sound strange but is true if you believe the pyramid of nonsense being built by the Labour administration (and supported by officers) to dramatise the cuts.
When this statement:
Due to cuts to our government funding, Ealing Council needs to save £65million over the next three years. This is approximately 30% of the money that the council has available to spend on its services.
appeared in the library consultation document I challenged the council’s finance officers that they had stopped being objective and that this was nonsense. It is based on at least four nonsenses as you will see during the course of the next few posts.
To get to this 30% number the council (Labour members and officers in perfect agreement apparently) divides the current savings target of £65 million by a rather arbitrary figure that they call “net controllable budget” for the previous year. When you hear Labour spokesmen using this rather elaborate terminology it is to help prop up their pyramid of nonsense.
The net controllable budget is a bit weird as it is the amount you get when you take each service in turn and subtract its income from its expenditure and add all of the net figures together. For instance, last year the budget for off street parking was expenditure of £4,088 less income of £4,918K so the figure that contributed to the net controllable budget was minus £830K. So the “money that the council has available to spend on its services” includes minus numbers (profits or surpluses on some services) and the more money the council makes the worse it gets. In fact when the council makes a saving by increasing parking charges by £1.47 million they called it a cut AND used it to DECREASE the divisor of their ratio. There is no way this illuminates the debate on the size of our budget cut. All it does is to allow Labour to wildly exaggerate the size of the cuts and to unnecessarily worry and inflame people.
Anyway the really funny thing about the net controllable budget is that it is going to be larger this year than last. Ooops. If you want to check my reasoning go to the last page, 195, of the appendices of the budget report and look at the line titled “Total budget for services”. The revised number for 2010/11 was £213,347,000. The number for 2011/12 is projected to be £219,032,000 – an increase of 2.7%.
I will come back to this hilarious hole that Labour has dug for itself tomorrow.