Council budgets over the last 5 years have been ‘pay less get more’ budgets. The Council decided not to increase Council Tax and benefit from £75 million in efficiency savings across is operations. But was this a sustainable strategy? Clearly the strategy was unsustainable as the Council’s new Budget will raise Council Tax over the next 5 years. The Council blames Government spending cuts but it has known these cuts were on the way since the start of Government’s austerity programme in 2010. So why did the Council decide to pursue a strategy that drastically reduced its income, harmed its operations and contributed to the deterioration of its services provision?
The Council’s Budget 2016 is a ‘pay more get less’ budget. The proposed 4% rise in Council Tax by itself will contribute little to improving the Council’s substandard adult social care provision or prevent it from discontinuing its support for its non-statutory services. In May 2015 the Council stated in its Caddington Hall Care Home consultation documents;
‘The Council owns and operates seven care homes which we built several decades ago and which currently no longer meet the expectations of customers and regulators in terms of facilities and accommodation’.
The Council’s Executive decided to close Caddington Hall in July 2015. Without capital funding in addition to the proposed Council Tax rises the rest of the Council’s Care Homes remain under threat of closure despite increasing demand due to our ageing population. The implications of an ageing population for healthcare provision have been common knowledge since at least the turn of this century. Yet the deterioration of the Council’s Care Homes has been continuous since then. Clearly this service’s deterioration is an outcome of the Council’s unsustainable ‘pay less get more’ strategy.
The Council’s flagship Development Strategy launched 3 years ago by Cllr Jamieson with a flurry of ideological rhetoric has stalled because its ‘pay less get more’ strategy has harmed its capacity to produce an approved effective plan for creating jobs, and building affordable, and social housing. An outcome of this stalled strategy is the revenue income from planned housing and employment development is not being realised. The Council’s failure to get developers to ‘build out’ their sites quickly means the planned expansion of its revenue raising Council Tax base lags behind increasing demand for Council services and, affordable and social housing.
The Council’s other means of revenue income, the Community Infrastructure Levy (CIL), remains unapproved. However if it were approved, one of the largest sources of income from the levy will be lost as the Council intends to set a zero levy on its Houghton Regis North development to improve the viability of building at this location. Considering Government cuts, and increasing demand for services, and Council Tax increases, is a zero levy for large housing developments an appropriate or sustainable strategy?
Council Tax will be a significant portion of the Council’s income over the next 5 years as planned cuts in Government funding begin to bite and funding from other sources such as the new homes bonus decline. The amount of new homes bonus payments depends on the number of houses built and is therefore affected by developer ‘build out’ rates. In future payments may depend on the Council having an approved Development Strategy. Currently build out rates are slow and the Council does not have a Development Strategy. The phasing of a new source of Council income from the retention of business rates means it will not be available to spend until towards end of the Council’s financial plan. Another potential source of income may come from the Council delivering services and infrastructure that are currently provided by the Government. However income will only arise if the Council can deliver these services and infrastructure for less cost than the Government can.
If the Council were to provide new infrastructure and services without a robust and sustainable financial plan there is a high risk of a shortfall between the costs of their provision and income they generate. Any shortfall will have to be funded by the Council and paid for in part by further increases in Council Tax. In the light of strategic errors the Council has made is the Council capable of producing a robust and sustainable financial plan?
The Council is considering spending £278 million on Capital Projects over the duration of its financial plan. The revenue implications of these projects have been accounted for in the plan. This means a portion of the proposed 4% rise in Council Tax is being used to fund them. The corollary is if our local representatives were to choose not to go ahead with some of these projects then large rises in Council Tax can be avoided.
The Council will soon be deciding whether to spend £42 million on highway schemes but what benefits will these schemes provide the people of Central Bedfordshire? Would electors prefer some of this money to be spent on adult healthcare and affordable and social housing instead of building roads to encourage migration from London into an increasingly overpopulated Central Bedfordshire?
Funding for capital projects comes from South East Midlands Local Enterprise Partnership (SEMLEP) and other similar agencies, bank loans, Government loans and loans from other Council’s. A recent Council Treasury Management Report shows the Council has taken on high risk Lender Option Buyer Option (LOBO) bank loans. The Budget 2016 report also shows the revenue implications of small rises in the Bank of England base rate. However, the report fails to highlight the risk of SEMLEP’s funding drying up if the UK decides to leave the European Union as most of its funding comes from the European Central Bank via Government.
Loans from other Councils may have an adverse impact on Central Bedfordshire countryside as the quid pro quo could mean our Council taking on other Councils’ housing requirements to protect their countryside by building their houses in Central Bedfordshire. Currently Milton Keynes Council is planning to develop land inside Central Bedfordshire around Hulcote, Salford and Aspley Guise. So far our representatives on the Council have not responded to their electors concerns about these planned developments.
Currently developers contribute to funding infrastructure through s106 agreements. The application of this income will slow down and diminish over the next 5 years. Recent changes to regulations discourage Councils from pooling too much of this funding before it is spent. As well the Government wants the Community Infrastructure Levy to replace s106 funding as CIL will reduce developers upfront contribution to infrastructure costs. These changes will result in Council Tax payers funding in part the revenue costs resulting in shortfalls between the costs of infrastructure and income from s106 and CIL.
The Woodside Link Road at Houghton Regis North is one example of a £17 million infrastructure funding shortfall that will be funded in part by the Council Tax payer over the next 5 years. A study of recent planning applications raises further concern as s106 agreements will be used to fund the building of new social care homes on the back of increasingly unaffordable housing development. This strategy jeopardises the prospects of the delivery of social care homes at a pace commensurate with increasing demand.
Recently I have commented on the difficulty electors are likely to experience when they try to engage with the Budget 2016 consultation. My own experience and the experiences of other Green Belt Parish Councils in the Toddington Ward is our representatives Cllr Nicols and Cllr Costain have done nothing to explain the new budget’s content or the alternatives they and the Council can choose between. Assuming they understand the Budget and what the alternatives are.
There is a democratic deficit in the Toddington Ward and probably across the rest of Central Bedfordshire because the majority of our representatives regularly fail to meaningfully engage with electors and Town & Parish Councils on significant issues such as the Development Strategy and the Budget. Preferring to consult through questionnaires based on limited and false alternatives rather than by face to face meetings where they explain the choices they make on their electors’ behalf. Clearly this democratic deficit has arisen because our representatives do not want their electors to understand the reasons for their choices in case electors disagree with them and vote differently in future.