Budget Presentation from Councillor Keith House, 24 February
2011
Introduction
Good evening Mr Mayor.
In some ways this year’s budget is
straightforward to present. We are not bringing forward new
proposals for revenue spending and, like probably every other
council in the country, are coping with managing on a reduced
budget.
So much has changed in the last year.
This time last year, Gordon Brown was still Prime Minister, and the
full effect of Labour’s overspending was still not fully
appreciated. Of every £4 spent by the state – and that
includes our grant – a whole £1 – 25% was being borrowed.
Just imagine that with your own household
finances. After four years you would have debt accumulated to
the equivalent of your entire household income. Total out of
control, and unsustainable.
So the backdrop for this budget is about
coping with less income from Government, and the difficult choices
that come from that drop in income.
And it’s worth remembering too that the
deficit reduction package launched by the Coalition Government was
fractionally more generous than Labour’s plans if they had been
re-elected.
It’s not my style to play the blame
game. We’re a positive Council looking positively to the
future. But it’s worth getting the facts out in front of
everyone again, just for the record.
The national news and local newspapers have
been full of doom and gloom about local government finance and
services. That too is not a path I want to tread.
For here in Eastleigh we had anticipated the
need to make genuine efficiency savings long before the election,
and alongside the Chancellor’s emergency budget last summer we were
able to lock into, and develop further, our plans for sustainable
finance for our Council and our community.
We were helped by our asset management plan,
which had been held up by some councils elsewhere as risky.
You know the old phrase from Yes Minister, where the civil servant,
Sir Humphrey, says “Very brave Minister”. Well we thought it
was common-sense to invest and we’ve been proved right, with an
asset portfolio that has given us a cushion against cuts, and we’re
being held up across the board as having taken good
decisions.
But that does not mean the budget in front of
the Council this evening is easy, and can be delivered without some
pain.
We have been able to avoid cuts in front-line
services, but that doesn’t mean we are able to do everything we did
as well as we have been able to in the past. Yes, we’ll make
sure our performance in areas that impact on vulnerable groups is
not affected, for example by keeping up our speed of determination
of housing benefit claims. But other services, such as
development control, are now under much tighter pressure and it’s
simply not the case that we will see all plans decided as quickly
as in the past.
As councillors we’ve played our part too, with
a freeze in allowances, fewer special responsibility allowances and
a 5% real-term cut in our allowance for the next two years.
On this agenda is report slimming down our own democratic
arrangements, so that the staff cost of servicing the Council is
reduced.
Let me at this stage then Mr Mayor in
introducing the budget pay tribute to all of our staff, across the
entire Council, for shouldering their difficult part of creating a
balanced budget for Eastleigh. They too have seen a pay
freeze, and many will experience reductions in funding for
travel. We have terrific staff. I’m proud of them, and
I know you are too. And I know we all want that on the
record.
It’s not been easy either for finance staff
putting together and building a strong budget amongst the shifting
sands of government announcements. It has taken the new
Government longer than we would have hoped to bring forward final
figures on which to base our spending plans. So thanks to
Nick, to Martin, to Martin, to Sarah and all in the Finance team
for making the sums add up, and of course to Pauline who has to
make sure that the English language is applied to their Maths.
Let’s look at some of the details.
Council Tax
Let me start with Council Tax. For seven
consecutive years, with our Council Tax Guarantee, we have kept tax
levels 1% below December’s RPIX. Over seven years our tax
rises totalled 11%, set against inflation over that period of
23%. It’s an impressive record, unrivalled amongst our
neighbouring councils.
This year, thanks to support from the
Coalition Government, we are freezing Council Tax. Every
principal local authority is doing the same.
Many will next year return to inflation-linked
tax increases. We won’t. Our commitment, as we
announced last year, was to continue our policy of tax increases
below inflation. We said then that the tax increase for next
year, 2012/13, would be on our usual formula of December’s RPIX
minus 1%. We keep our pledges.
So residents can be assured that this year’s
frozen tax is not a flash in the pan and that next year we will
again keep tax below inflation.
We’ll do this because alone of the major
political parties the Liberal Democrats don’t like Council
Tax. It is regressive and taxes people most,
relatively, those who don’t qualify for benefits yet who struggle
to bring up families on low wages, or subsist on state pension
handouts often topped up with meagre private pensions.
Our approach remains to let people keep their
own money, and only to tax where we needed to do so.
The Council's Financial Strategy
Let’s now look at our finances, and start with
Government grant.
Taking out the impact of transferred services
and Council Tax grant deduction the settlement represents a real
cash reduction in grant of £814,000 (12%) in 2011/12 and a further
£631,000 (10.9%) in 2012/13. This compares to the Government
published reduction for Eastleigh Borough Council of 6.27% and
5.28%.
We can’t see these figures in isolation.
We know that the Spending Review forecasts further grant reductions
in 2013/14 and 2014/15. Our working assumption is that grant
will further reduce to £4.8m in 2014/15. As we reported to
Cabinet, the equivalent figure in 1995 was £5.8m. But we have
to look wider than our base grant. We have also seen a loss
of £828,000 in specific grants. These grants funded a range
of activity from work in planning and development to funding free
swimming. All have had to be worked out of the budget.
Taking all these issues together will give us
a total net expenditure in 2011/12 of £12.664m, a year-on-year
reduction of nearly £1.3m. Taking efficiency savings
together, by 2013/14 over four years we need to achieve savings of
nearly £4.5m.
Every year there are other changes in the
budget we present to council. The most obvious other change
this year is the further transfer of services to many of our parish
and town councils, and the arrival now after their first elections
of the new Parish Councils in Allbrook & North Boyatt, and
Chandler’s Ford. It’s been good to see the new councils
established and give additional voices in decision-making for those
local communities.
Now that we have completed separating out the
budgets for the new parishes and understanding the costs in the
remaining non-parished area in the town centre, it is possible for
Eastleigh Local Area Committee to have full financial
responsibility for the parish-level services in the non-parished
area. So from next year, not only will these amounts be
devolved to the Local Area Committee, but the Local Area Committee
will have control of that element of the Council Tax that relates
specifically to its area.
One change we will see in our budget from next
year is the introduction from the government of the New Homes
Bonus. This is another Coalition Government initiative, that
passes additional money to councils where development has taken
place. For next year this grant is worth more than £400,000
to us. We will ring-fence it for capital purposes, with a
proportion being used for much needed additional affordable
housing. In time, based on the current rules, the grant could
be worth £2m each year to us.
The other big change in the budget this year
is the loss of concessionary travel to the County Council.
This was a decision of the out-going government, but it has created
its own headaches especially for those districts like Eastleigh
that have funded a better scheme than the basic national
scheme.
The Government decided to remove from our
budgets not just the funding provided for the core scheme, but the
funding they thought we spent on concessionary travel. Sadly,
the numbers don’t add up. With the County Council deciding to
implement a less good scheme than the one enjoyed now by our
residents, we’ve ended up effectively handing our money over to
areas elsewhere in the County.
The sad bit of this story for our residents is
that they’ll lose out on free travel before 9am, moved back by
thirty minutes this morning at the County Council, access to free
rail travel, and free use of community transport services like
Dial-a-Ride. Those of us here who are also County Councillors
did try to get these benefits restored for Eastleigh residents
today, but our pleas fell on deaf ears. We’re not the only
ones losing out. New Forest residents who had free access the
Hythe Ferry now won’t, and neither will Gosport residents be able
to gain free access to the Pompey ferry.
To make a slight diversion into the County
Budget – some of us have had this pain since 9am this morning, so
you all might as well suffer, we’ve also seen today the loss of 35%
of the budget for Children’s Centres, and the effective end of the
County Youth Service. But you’ll be reassured to know that
the County still felt able to stuff another £10m into reserves,
which will stand at over £130m in a year’s time.
The Year Ahead
Now My Mayor for those who find budget numbers
a little dry, let’s take a different look at the year ahead.
It’s not all doom and gloom. Yes, we have to achieve
challenging efficiency targets, but we’re getting on with the job
of delivering quality services too.
First, let’s look at projects around the
community.
Here in Eastleigh, the Mayor and Chris Huhne
MP are opening this Friday the new E.N.E.R.G.Y Youth Centre in
Leigh Road. The Local Area Committee has been saying for
years that it wanted to provide a dedicated youth centre in
Eastleigh town centre. Now we have one. I managed a
sneak preview just as kit was being moved in a few weeks back, and
it’s impressive. Take a look if you get the chance and spread
the word. There are great facilities, from IT to electronic
games, from coffee to traditional discos, and chill space
too. There’s even a recording studio. Maybe some new
beat combo can put Eastleigh on the map. It’ll make a change
from Ernie.
Down the road in West End, we will in April
launch our very own Go Ape course at Itchen Valley Country
Park. It’s a really good example of providing a community
facility that encourages fitness, activity, and the exploration of
our woodland, and which will bring in income to the Council.
I’d like to take the credit, but Cllr Alan Broadhurst got there
first having seen a similar facility at Moors Valley.
Next door in Hedge End, on 7th
April, we launch The Berry Theatre. This is the culmination
of our plans for sports and arts on the Wildern site for whole
community in the south of the Borough. It’s a £4m project,
and at 300 seats The Berry is of similar size to The Point.
But whereas The Point brings us images of dance and light open
space, The Berry brings us images of theatre and balconies, and
RED. Duh – berries! The Berry Theatre’s programme has
already been delivered across the Hedge End area, there are a stack
of events over the opening weekend, and I hope all councillors will
be able to get there at some point to see our new venue for
themselves.
Secondly, let’s look at some of our policy
commitments and objectives we’re striving for – our policy
priorities of the environment, prosperity and health.
There’s our continued effort to do our bit to
tackle climate change. We’ve not quite reached our 50%
recycling target – the recession put paid to that – but what we
have seen is our rates hold up – we were at 48% late last year –
and overall waste volumes collected go down. As an aside, at
least two communities in the Borough have now exceeded a 50%
recycling rate – Fair Oak and Hiltingbury. We don’t have all
data at community level, but I thought councillors in those areas
might want a little glow of satisfaction for their communities.
We can do our bit tackling climate change too
by looking at transport, and our own activities. The Car Club
we launched has gone from strength to strength and has started to
involve local people. We are looking to expand it during the
year.
And we can do our bit tackling climate change
by investing in renewal energy. Cabinet has approved initial
funding of £1m to fit solar PV panels to existing council and
community-owned buildings, and we’re working to take advantage of
the Feed In Tariffs to the national grid that our Secretary of
State for Energy and Climate Change, Chris Huhne, has opened up to
councils. This will not only reduce energy costs, but will
produce income to help make future efficiency targets. Green
is good.
On prosperity, we are still seeing the
benefits in our town centre of the launch of our cinema and bowling
extension to the Swan Centre. It has been encouraging to see
new businesses opening, widening the appeal of our town
centre. In Eastleigh too we have managed our growing property
base with rentals to growing businesses, and this will be added to
over the next two years with our own move to the town centre, a
project which will also modernise and improve the energy efficiency
of Eastleigh House. That move will free up our own site for
redevelopment.
On health, we know that the Coalition
Government is committed to increased efficiencies in the health
services and bringing decision-making down to local GPs cutting out
tiers of bureaucracy. This means we will need to develop
closer relationships with local GPs as we work for better public
health. With control of more schools moving away from the
County Council to local ownership in Academies, there is enormous
potential for us to be the link between education, health and
community activity.
We have already delivered in this area with
our work in all of the Borough’s secondary schools working on
sports and arts projects. There is more we can do. I’m
particularly excited by a new project being developed in Bursledon,
where working jointly with local GPs, the local Community
Association, and the County and Parish Councils, we are working on
plans for a new medical centre with a library space and revitalised
community building. A terrific project, it’s in its early
stages of development.
We are also working up a project to see the
Household Waste Recycling Centre in Eastleigh moved from its
current inadequate site in Woodside Avenue, to a new site in
Chestnut Avenue. This will be a real bonus for the north of
the Borough. Firstly it will remove the long traffic queues
and congestion at Woodside Avenue, and secondly it will make for a
much more accessible site for residents in much of the town and
Chandler’s Ford. More details will be in a report to Cabinet
next month.
So Mr Mayor despite the difficult times,
there’s a lot going on, and I know I’ve only scratched the surface
here.
We remain an ambitious council. It’s
part of our genetic code. We’ll continue to be relentlessly
positive, and say yes to change. I hope all members will be
able to support this budget.
Mr Mayor I move the budget resolutions and
commend them to Council.
24 February 2011
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