Making the pennies count

I have returned to the office this week having been in Birmingham at the Local Government Association’s annual assembly and conference, which has been a very useful experience, and has given us all plenty to think (and
worry!) about.

The Government is pressing ahead with a variety of major policy changes which will have a considerable impact on the citizens of Blackpool.

Firstly, and uppermost in our minds at the moment is the issue of finance.

Roughly speaking, the Council’s net budget has been as follows:

2008/09  – £131 million
2009/10 – £155 million
2010/11 – £167 million
2011/12 – £148 million
2012/13 – £144 million

My best estimate (and at the moment it is an estimate – based on indicative figures, and the Chancellor of the Exchequer’s hints in the last Autumn Statement, backed up by messages in his Budget) is that for the next 3 years, we could be looking at

2013/14 £134 million
2014/15 £124 million
2015/16 £114 million

These figures exclude some public health funding that will be coming our way as of next year – but that money is very specifically ring-fenced to take on new public health duties and responsibilities, so cannot really be counted in with the general budget.

Basically, since the high point of 2010, we could soon end up with at least £50 million less to spend.  We cannot be certain that the cuts will stop there – but I’m hoping they will.

Clearly, having £50 million a year less to spend on services is already having, and will continue to have an impact on frontline services.

We are currently in the process of working out how to mitigate against this – and have begun preparations on our next budget (due in February 2013) which I have decided should be a 3 year budget, rather than a 12 month budget, as usually happens. 

We need to have stability, and be able to plan ahead, not just sharpen our pencils every December and decide where the axe will fall this time.

That budget will be based on two key documents – our recently published statement of “Vision, Values & Priorities”, and the “Council Plan” which is currently being drafted. 

These two documents – each of which covers only one side of A4 paper, will constitute a clear framework for Council action, and allow the residents of the Borough, and our staff, to see where our priorities are – it will also enable people to see whether or not we are delivering on them.

Replacing huge piles of priorities and strategies with just 2 sides of A4 has been a very useful experience, and has allowed us to focus much more clearly on what the major issues are, and how we are going to tackle them.  I look forward to my next blog, when the Council Plan will be ready for public debate!

Another topic for discussion at our Conference, was the vexed question of Business Rate localisation. 

At the moment, we just collect business rates (about £43 million) and send them off to the Government.  They then redistribute these according to need, and send us a cheque back (about £66 million).  This is going to change, and change soon.

Currently, the Government are saying that although we only collect about 43 million, IN THE FIRST YEAR, we won’t lose out. 

They are also saying that (subject to a complex series of levies, tariffs and top ups) we will be able to keep 50% of any growth in the business rates payable. 

Now, I’d be quite excited about this if we were a Borough with vast tracts of undeveloped land, or huge business parks just waiting to be filled.  But we’re not. Hmmmm.

Likewise, changes to Council Tax Benefit (CTB) are a hotly debated subject.

The Government is going to chop 10% off the amount they give us to fund CTB – but are stating that certain groups, such as pensioners, must continue to receive the current rate of CTB, whilst allowing us the freedom to change the amount of CTB for other people and other properties (we’ve already increased the amount of Council Tax payable on second homes and long term empty properties, in advance of this decision).

The most likely outcome of this, will be that different Councils will offer different rates of Council Tax Benefit, and that people who are out of work, or in low-paid work, will end up paying more Council Tax than they have in the past. 

Clearly we are working very hard behind the scenes to try and minimise the impact of this – but there will be an impact, as we are having our funding for CTB cut by over £2 million a year from next year (never mind the other cuts outlined earlier).

A benefit cap is being imposed by the Government, which will mean that around 300 families in Blackpool will see their Housing Benefit cut, or even stopped altogether. 

The moves away from the current benefits regime to a system of “Universal Credit” will almost certainly place even more of a financial burden on families – and on the Council to try and deal with these hardships.

Finally, Youth Services kept coming under the spotlight.  In Blackpool, the Youth Service budget has been eroded since 2007 – from nearly £4 million (which wasn’t enough, frankly) down to about £2 million. 

We can’t go on like that, and it seems to be common now for Councils to look at other ways of delivering services to young people.

Work is ongoing with this, but I am very clear about the fact that the most important thing here is the quality of the outcomes for young people, the quality of the activities we offer, and the civic, citizenship, social, economic and cultural experiences they gain from our Youth Service.  If those outcomes can be improved by delivering work in a different way – we’ll do it.

As you can see from the figures above.  We have little choice.