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Ealing and Northfield

The budget comes around again

Last night at the Overview and Scrutiny Committee (OSC) we spent an hour looking at the council’s budget. This is due to go to cabinet next Tuesday and then will be signed off by the full council on 28th.

Council finances are complex and opaque but you can probably get 90% of everything you want to know about them by studying this document (or more properly set of documents). Take a look at the papers here, here and here. They are hard work but will reward your effort.

The main headline is that Labour are freezing council tax for the second year running but bitching that central government is only funding the freeze for one year. This is good news for residents.

With this budget the council has pretty much finished the job of taking £85 million of savings. Although Labour are calling this number a government cut the actual cut is only some £50 odd million. Labour is taking an additional £30 million for its own purposes and running budget surpluses which it is putting into capital projects such as the notorious Southall car park – more on that later.

At OSC there was lots of doom and gloom from Ian O’Donnell, the council’s executive director of Corporate Resources. As the council’s chief financial officer it is his job to be risk averse and to see the downside of things. One bit of good news that, unaccountably, the council officers and Labour councillors did not highlight is that whilst the council is having to shell out £300 million for school building, driven mainly by rising birth rates, some £200 million of this is being provided by central government in spite of Labour’s flimflam about the cancellation of its outrageously wasteful BSF scheme.

A great new innovation in this year’s budget is a complete review of all of the council’s fees and charges, see Appendix 12 here. This idea goes back to a meeting I had with Ian O’Donnell in July 2009. I suggested that there was no overall management of the council’s fees and charges on an annual basis. This appendix is a welcome attempt to pull that altogether.

Scrolling through appendix 12 the thing that catches my eye is CPZ charges, at the top of page 27. Going up again in April. People in the short hour zones will wonder why their charges is going up by 12.5% whilst the all day zones are only going up by 3%. Is there an unstated convergence policy? I am sure you will come up with some more observations.

2 replies on “The budget comes around again”

Phil

You have to be a genius to absorb and understand all this. Is there a four page summary?
Looks as though there will not be future staff reductions?

Normal people pay down their long term debts when interest rates are low. Is Ealing doing this? Or are they just relying on inflation, do you think?

Am I right in thinking that the CT will be exactly the same even though Boris is reducing his precept by £3-10?

If the Council today wanted to go back to the expenditure level when Labour came in, do I think that at say £51M more (as it was then) that I would have on band D to pay an extra 40%? See 4.16.3 (Main BS Report) where it says “For every 1% increase in the 2011/12 council tax, an additional £1.27M council tax revenue is raised”.

Sure that can’t be right, but please don’t jump up and down?

I note that when the central Tories withdraw the grant for Council tax perhaps next year, the Senior Council officer who signed the document thinks that will be a financial cliff edge scenario. Perhaps he should tell Labour to discard their blingy thoughts.

3.2.2 Does this mean a shortfall of £6.2M or just £3.1M? Perhaps that’s what Pickles wants?

But what I do query is when you include the savings achieved under your watch plus those under this Labour watch (you exclude the Labour bling luxury items) and Boris reduces his precept, why can I not expect a real decrease in my CT

How does it work over a long period? Can’t surely all just be inflation? If nothing else perhaps you would answer that for us? If you are feeling generous you might answer a few more???

George,

This stuff is complex. I will try to cover some of the points that you raise.

The council’s staff reductions will be really quite modest over the four/five years. This will be achieved by making sure that external grants to the voluntary sector, support for schools and prices charged to residents take the burden of the savings required. I will be keeping an eye on this but the numbers will not change significantly between 2010 and 2015. You can tell this because the numbers are hard to work out and the unions are not complaining! The Labour council really is protecting its own here.

Credit is cheap now and the council is taking advantage of this by maintaining quite a large capital programme. That said the largest part of the capital programme is schools (2/3rds of which is coming from central government as capital grants) where the council has a legal duty to provide.

The bills we pay comprise council tax (from council) plus precept (from GLA). Council bit will be unchanged. The precept will go down 1%. The overall bill will go down by a tiny smidge.

You are quite right that the £50 million budget cut from the government is equivalent to 40% of current CT in Ealing. No-one is trying to suggest that local government isn’t being put under pressure. I would like to see the centre doing more of the heavy lifting that does needs to be done to bring overall spending back into line with income across the public sector.

The freeze grants are real money. Last year the government gave Ealing £3.1 million for 4 years if it froze council tax. This year it is offering £3.1 million for one year. Sure it is limited. It is typical of local government’s hand out mindset that a £15.5 million present is considered to be a problem. Last year no council in the country turned down the freeze grant so I don’t suppose it was that big a deal! This year only a handful will. In reality it would be politically hard to push up council tax so a £3.1 bung makes it pretty easy to leave it alone.

In Ealing council tax only went up 1.9% two years running under the Tories then was frozen for two years. Now it has been frozen for two years running under a Labour council (paid for by the horrid Tory-led Coalition). Council tax has gone down significantly in real terms. Quite right. It needed to after doubling under the Labour. Although the Tories took out £60 million in savings much of this was ploughed back into new “growth” in areas such as street cleaning, re-cycling and policing so the net saving was relatively small and eaten up by inflation, and paying interest on borrowing, etc. This was right for the time as we were esentially moving resources from the back office to frontline services which residents wanted. Now Labour is cutting frontline services rather than fundamentally re-engineering the council.

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