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Opinion: Preston Council’s financial position is facing an ill wind but is there a silver lining?

Posted on - 10th November, 2015 - 7:00pm | Author - | Posted in - Opinion, Politics, Preston Council
Food waste can go into standard grey bins

Cutbacks at Lancashire County Council mean there is less financial support for bin collections in Preston Pic: George D Thompson

It’s an ill wind that blows no good; and austerity is an ill wind, especially for local government. While the pace and depth of the cuts has always been an issue, it is the nature of the implementation that really blows. While it’s easy to cite the obvious reductions in direct government funding to Preston City council (£12.2million down to £8.8million since 2013 by the way), the best/worst example is the changes to Council Tax Benefit (now the Council Tax Support scheme).

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The pot of money that the government gives councils to make up for those who cannot afford to pay council tax was top-sliced by 10%. The rules on who pays council tax were then devolved to councils, who were forced to decide who would pay council tax and who wouldn’t; except that pensioners were protected from the cuts by the government, so the 10% in effect became 20%, since there were less people to share the shortfall amongst.

Preston Council reluctantly decided to charge people on low incomes 20% council tax. These are people on benefits and therefore we are only collecting around two-thirds of that money in-year, so another slice of that money is then lost to the council…but it doesn’t end there. The government then merged that grant with the general grant – the one they keep cutting year on year. So, in reality, the original 10% reduction is now around 50%.

But we have learned from the past, and we have built-in to our financial forecast further government cuts. We can only hope that we have forecasted correctly since the government have given us no real clue as to what’s next. The Cabinet presented it’s mid-year forecast to council in October, yet despite having taken into account expected future cuts, we still have a significant budget deficit to deal with, around £2.5million per year by 2019.

The bulk of this is the knock-on effect of grant cuts at Lancashire County Council, who have helped us with the costs of collecting the bins for many years but can no longer do so, due to their own financial difficulties.

Ill winds indeed, but are there any silver linings? Well, despite the government taking blunt tools to our funding, we have had to be more creative in order to protect the services that we value. Two, three million pounds savings programs since 2010 have produced massive efficiencies in property overheads, use of technology, sharing of resources with other councils, staff and management restructures and income generation; and the current savings drive is on target, achieving some of the savings earlier than expected.

This creates problems in itself since departments now have a culture of not spending unless they absolutely have to; and if they suffer unexpected costs or staff sickness, service levels are at risk. Relying on increased income streams from some services like leisure, is also a tricky business if the market shifts.

I would be lying however, if I said that funding cuts had not forced innovation and efficiency that may not have happened otherwise, it’s just a shame that people like council tax support claimants must suffer as a result.

As a reaction, austerity has spawned Preston Council’s ground-breaking ‘Fairness’ agenda, responsible for the new Guild Money credit union, the spread of the Living Wage and development of ‘Community Wealth Building’ which has just won EU funding to further investigate the benefits of maximising the effect of the one billion pounds of public sector spending in the area.

In order to protect parks, leisure, culture, advice services, community support and the Fairness agenda, the next few months and few years will see more changes to services that will be unpopular to many. All we ask is that taxpayers consider the alternative…ill winds and no silver lining.

Martyn Rawlinson is the cabinet member for finance and resources at Preston City Council, and councillor for the Fishwick ward.

What do you make of the council’s financial position? What would you do? Let us know in the comments below

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