‘BUDGET FOR HOPE’, SAYS COUNCIL LEADER
But higher charges and reduced services are on the way
HUGH SULLIVAN
Hastings Borough Council was due to meet in full session on Wednesday of this week (13 December) with one overwhelming matter to debate – the estimated £4m deficit currently estimated for its 2024/25 budget.
Council leader Paul Barnett has set three “key priorities”: no further dipping into reserves; protecting frontline services; and “living within our means”. That has left no alternative, he argues, to proposing, as “budget savings”, a series of charges increases and service reductions.
Last week his cabinet approved increases of 7-10% in crematorium fees, 10% across a swathe of car parking charges and beach hut rents, 15% in hire charges for The Oval and other open spaces, and rises of between 20% and 43% in fares on the East Hill and West Hill lifts. Total income from these changes is calculated to bring in an extra £120,000 for the year.
Cutting services offers much more scope for balancing the budget. That requires either reduction in staffing levels (in particular, not re-filling vacant posts), bringing some previously sub-contracted operations back in-house, or – the council’s preferred means of continuing non-statutory functions – finding external funding sources, agency partners and/or volunteer organisations to share or reduce financial outlays.
In his column in the Hastings Observer last Friday, headed “A budget for hope after a tough year”, Cllr Barnett wrote: “We need to transform the council from a large organisation that tries to do everything into a smaller enabling council that has partnerships as a priority. Partnerships with other councils, which helps us reduce our back office costs, partnerships with government, such as Levelling Up, that leads to new investment in housing and health, and partnerships with our excellent local voluntary sector, who bring new ideas and energy to the provision of key services.”
The call for partnership with government could hardly be understated, given the amounts of cash currently being splashed for capital projects through the Town Deal and other multi-million pound investment programmes sponsored by DLUHC (the Department for Levelling Up, Housing and Communities). But Cllr Barnett will have bitten his tongue to avoid criticising the Chancellor of Exchequer’s Autumn Statement issued on 22 November, which offered no direct help to local authorities in budget crisis.
NOT ALONE
It’s by no means only Labour-run councils or those operating in financially deprived areas which are finding themselves on the brink of bankruptcy. A survey released by the Local Government Association last week warned that almost one in five council leaders and chief executives believe it to be “fairly or very likely” that they will issue a section 114 report (formal declaration of insolvency) within the next 15 months. A letter issued last week to DLUHC Secretary Michael Gove and the Chancellor Jeremy Hunt by the leaders of England’s largest county and unitary authorities – including Conservative leader of East Sussex County Council, Cllr Keith Glazier – advised that the majority of higher tier councils “will now have no choice but to increase their planned level of service reductions, reduce investment on growth-creating capital projects, and levy higher council tax rises: all of which impact our residents. For some, even this drastic action will not be enough, with seven in ten now no longer confident they can balance their budget next year.”
The UK inflation rate was running at over 11% in October last year and was still 4.6% a year later. Last month local government trade unions negotiated a 9.42% pay rise for lowest-paid workers backdated to 1 April. Councils cannot avoid incurring soaring energy costs. They are facing a tsunami of demand for housing the homeless – Hastings is only one of many councils exposed in this respect. Yet central government has kept rises of council tax capped at 2.99% for both the current year and next year, while consistently cutting direct financial assistance to local authorities. How does the Chancellor imagine that they can keep providing services at previous levels? Presumably he doesn’t.
This report was necessarily prepared before the council meeting on Wednesday. But, since the proposals put forward by Cllr Barnett are backed by the council’s Chief Executive Jane Hartnell and its finance officers, and have been backed unanimously in cabinet, it seems inevitable that they will have been voted through.
Why won’t the council raise council tax?
One theoretical avenue open to councils is to hold a local referendum to approve the setting of council tax above the 2.99% cap – a straightforward way, one might think, for a town’s population to secure the provision of desired public services by opting for increased local (rather than national) tax rates. However, the council would itself have to pay for the cost of holding the referendum, and there’s no precedent for a successful outcome.
The option has been open to all recipients of council tax since enactment of the 2011 Localism Act. Only the Bedfordshire Police and Crime Commissioner has tried it, seeking a rise in 2015 of 15.8% for its share of the tax intake. It lost: 30% voted in favour, 70% against. Voters perhaps thought that, if the need was real enough, central government would step in.
Jane Hartnell, Chief Executive of Hastings Borough Council, has considered the option, but told the cabinet in her report last week that the cost in Hastings would be around £100,000. “Whilst there will very soon become a point where we cannot cut any further and still meet core statutory responsibilities, or earn any more income, the council has been advised that any government support will be predicated on demonstrating that we have taken all possible steps to reduce non-essential spending.”
In other words, central government would withhold funding from any borough whose local electorate dared to make its own contribution to raising itself from public penury.
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This same language was typically used by Conservative Councils for many years. It’s disarming to hear it from a Labour controlled authority – since the resignations this week I’m not sure who is now in charge – as the end result is inevitably a tiny so called enabling authority which becomes virtually irrelevant to most people as it does so little. We’re practically there now of course. The council has let standards drop for many years and parts of the Borough look so down at heel. It’s not all about money. Often it’s simply about making sure something is done well. Too often the council can’t even manage that
And all the while the council has unwisely committed public funds to building a Premier Inn. Bankruptcy can’t be far away. If we want our town to thrive then the community will have to do more for itself. Generally we’re pretty good at that.