Friday, 9 December 2011

First cut may not be the deepest

The council has now been informed by government of how much money they are going to give us to run services for local people next year. It is what we expected so there are no terrible surprises. But that means the anticipated 30% cut in government grant between 2010 and 2012 will happen and we are on the way towards the near 50% cut by 2013.

Whatever one thinks of the government’s national deficit reduction programme, local government is taking a larger cut than all areas of spending bar one – sport and culture. Within that the 10% most deprived local authorities (of which Hastings is one) are facing cuts in government grant four times greater than the least deprived 10%. Our local churches petitioned Number 10 in the Spring on just this point.

The chancellor’s Autumn Statement indicated that cuts in public spending will now go on for longer. He will not eliminate the structural deficit by 2015 so spending cuts will go on till 2017. Public sector job losses will now be 700,000 not 400,000 and of course a third of those jobs are in local government. So things are looking difficult for some years to come.

The council’s medium-term financial planning till 2014 may have got its predictions right for next year but the position could be worse for the years to follow. The Autumn Statement made clear that there will be additional reductions to government spending during this parliament and that will affect us.

So what is the council doing about it? We have just had our external auditor’s report and it says:

“The council managed its financial position well in the year, with clear leadership on financial matters shown by the senior management team and the cabinet…The council has identified the significant financial risks to its financial stability and has taken action to increase the amounts of savings achieved through its efficiency programme, including a major restructuring of the council and a reduction in the number of senior management posts. It has also established sufficient reserves to support achievement of the medium-term financial strategy.”

We are looking at sharing services with other councils to save money – like waste collection, grounds maintenance and back-office functions. We have concentrated all council staff in just two locations to cut costs. But to meet the challenge facing us we will still have to look at every item of council spending and at every service we deliver to local people.

The government has offered councils the money for a council tax freeze next year by giving us in grant the equivalent of a 2.5% increase. But had we put up the council tax by 2.5% the extra money generated would of course carry on coming in every year. The freeze grant is for just one year. So 12 months on we will be short. But I will be recommending to the council that we take up the offer and there will be no council tax rise from Hastings Borough Council next year.