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Opinion: The season of goodwill is approaching, but Town Hall finances don’t offer much cheer

Posted on - 11th October, 2013 - 7:00am | Author - | Posted in - Opinion, Politics, Preston Council
Preston Bus Station is now a listed building, but the Town Hall coffers have to support it

Preston Bus Station is now a listed building, but the Town Hall coffers have to support it

While most people start to think about Christmas, Preston City Council’s cabinet have already begun to formulate their budget for the new year and beyond. By the time the festive season is upon us, much of the work on trying to balance the 2014/15 budget decimated by government funding cuts and falling income streams will have been done. Town Hall leaders however, are not expecting any nice surprises in their Christmas stockings this year.

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In fact, councillors received an early present from the government, in the form of consultation on the next local government finance settlement for 2015-17. It turned out to be an unwanted gift.

The consultation indicates further reductions to Preston’s government grant of around 15 per cent. While this is unlikely to be confirmed until late 2014, the cabinet will have to work on the premise that it’s funding will be cut dramatically once again for the life of its four year financial forecast.

By 2017/18 Preston council is likely to be spending £3 million a year less than it is now.

The financial forecast is exactly that – it’s an assumption of income and expenditure for the medium term. Some assumptions can be made fairly accurately, others not so; this means that the budget contains a certain amount of risk.

I have been involved with local government finance since 2006. Preston Council has been making budget savings for 10 years and in that time, the level of risk in its forecast has increased because councillors would rather try to find alternatives to halting vital services than to make all the cuts, all at once.

We have therefore, been operating with a deficit in the forecast of up to one million pounds. The Director of Finance, who has the power to veto the politicians’ budget if it appears too risky, has lived with running a deficit because the council has some money in reserves and has a good record of achieving the savings required; but this can’t go on forever.

Reserves can only be spent once, when they’re gone, you are back in the same position. Also, the options for efficiency savings and increased income are being exhausted. That doesn’t mean we have stopped looking, but with austerity hanging around like a bad smell, there is a realisation that there is no miracle around the corner. This brings the focus for savings firmly on to the council’s non-statutory services – services that the council choose to subsidise but are under no obligation to provide.

These ‘choice’ services amount to approximately £5m a year out of a £22m budget – more than enough to balance the books. You may, however, be surprised at what is ‘non-statutory,’ and what Preston could lose in the next few years.

For example, the council is under no obligation to provide a single park, play area or open space to its taxpayers. Yet it spends a fraction under £2m a year on a service that most people would consider essential. Access to open space in built up areas contributes greatly to the council’s priority of a healthy city. As do the two leisure centres that the council run at a cost of three-quarters of a million pounds a year, especially West View which sits in the heart of one of the most deprived communities in the country.

Another council run asset that many of us take for granted is the Harris Museum; A grade 1 listed building housing Preston’s history, a vast collection of world art and the cultural hub of the last Guild City. Yet, at a cost of £870,000 a year, it’s difficult to ignore when you’re looking for savings in a recession. Even if the museum was closed, which we are not contemplating, the residual cost of maintaining the building would be significant.

The council’s other cultural hub, the Guild Hall, is subsidised to the tune of one million pounds a year. Before anyone jumps up and down at an easy saving, we have already built half a million pounds into the forecast from a city centre asset review with one eye on the entertainment complex for a major saving. However, the complexity of local government finance being what it is, simply closing the building does not save a million pounds because you are left with residual building and admin costs that are shared across other services. The council is currently testing the market to see what it has to offer the Guild Hall, rather than risk losing the service altogether.

Another city centre asset with the potential for savings is the Bus Station. The history on this issue is better documented than Preston Guild. Yet it is a quirk of fate that Preston Council still runs the bus station. Lancashire County Council are now the transport authority but the powers that be in the Town Hall in the late sixties decided that Preston needed a bus station big enough to serve modern Tokyo. Preston Council could save anything between a quarter and half a million pounds a year depending on what the county council want as regards bus services for the city. Remarkably, neither the city or the county council are obliged to provide a bus station for Preston.

Some less high profile services that underpin thousands of vulnerable people in Preston are the Community Engagement team and the advice services. Together, these cost almost £700k a year to run but without them, many community groups and charities would struggle or fold and many families would succumb to debt. The advice service has recovered £2m pounds in unclaimed benefits and resolved over £1m pounds worth of debt already this year. The county council run Welfare Rights service is a shadow of its former self following cuts and many branches of the Citizens Advice Bureau are struggling for funding. Preston council cannot afford these services but Preston people cannot afford to lose them.

The economic development team at Preston Council (approx. £300k per year) were vital in securing the City Deal, yet they are a non-essential service that the government do not want to fund.

Preston is trying to develop its cultural offer following a successful Guild but the events budget that helped pay for the hugely popular Harris Flights are considered expendable by central government.

The list goes on; community safety and CCTV (£260k), empty homes action (£60k), sports development (£230k), all doing vital work.

The cabinet and the officers will squeeze every penny from statutory services through sharing with other councils, working smarter and will even consider more dreaded service reductions. However, following ten years of savings drives, it won’t generate the amount we need.

The decisions for the councillors just get tougher and tougher… but I’m certainly not asking for sympathy. It’s the taxpayers who are getting a raw deal. The services continue to diminish but the Council Tax stays the same. Working people are paying for a banking crisis that wasn’t their fault. Meanwhile, in the Town Hall, we will protect what we can until the season of goodwill returns.

Councillor Martyn Rawlinson is cabinet member for resources at Preston City Council

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