Following on from my piece yesterday, to put the cuts in context you need to work out what total council spending was last year, before the cuts happened.
What did the council spend last year? The accounts arenâ€™t out yet and even if they were they are so opaque that it would be hard to work it out. We can get to what was planned to be spent last year by looking at the budget for last year here. If you scroll down to the table on page 14 and look at the column titled â€œTOTAL EXPENDITUREâ€ you get the total amount that was planned to go out of the council last year. Surely this is the correct divisor for the that ratio we had yesterday?
If so it would destroy the Labour councilâ€™s exaggerated claim of 30% cuts. 6.7%! Flesh wound. Nothing to see here, move on please. Why did you sack half the park rangers?
Some of this money does pass straight through the council without touching the sides. One council officer used Alan Sugarâ€™s memorable phrase â€œprune juiceâ€ to describe these amounts. Letâ€™s have a look at these.
Last year the council planned to receive Â£215,505K of Dedicated Schools Grant (DSG). DSG comes in from government and goes straight out again untouched. So this part of the councilâ€™s spending should mostly not be in the divisor. There are instances where the council will dip into this is some convoluted way. For instance, they are planning to take Â£120K off the schools system by removing discretionary business rates relief for faith schools. A long story but just to prove that DSG is not as inviolate that the council might suggest. It would be fair to subtract this sum from our divisor.
The second big straight through is income of rents and service charges from council tenants and leaseholders. This was planned to be Â£33,699K last year. This is held separately in the Housing Revenue Account (HRA) and is ringfenced from the rest of the councilâ€™s finances. This barrier is fairly tight but sometimes things leak across, for instance the council has cut the police contribution of Â£70K from the HRA and this responsibility now falls on the general fund. So again the barrier is not as tight as the council might claim. Still it would be fair to strip this amount out of the divisor.
Finally, housing benefit is the third straight through item. Last year this was planned to be Â£250,622K. Although the council spends about Â£3.6 million administrating housing benefit it acts as an agent of the government and the housing benefit payments come from central government and go straight to recipients. This Â£250,622K should also sensibly be subtracted from the divisor.
Taking these three amounts off the total leaves Â£465,431K as our new divisor and a new ratio of cuts to expenditure of 14%.
Is this the right number? Even when being entirely fair-minded it is less than half the 30% that the Labour council is claiming. Is 14% fair? Only if you believe the Labour councilâ€™s story on the cuts. Labour have misrepresented both its spending (the divisor) and the cuts it is dealing with. More tomorrow.