Lib Dem Cllr Andrew Hickey responded to the budget at Full Council (23.2.22) on behalf of the Lib Dem group of councillors:
The Liberal Democrat Group would like to thank Councillor Dawlings and the officers for their hard work over the last year and for the preparation of the budget for the next fiscal year.
I spoke to the budget on behalf of the Liberal Democrat group in February last year. Here are the closing remarks from that speech: “..the predicted losses in the medium term financial strategy are concerning and appear to have no viable associated mitigation plan at the moment. We would like to see this proactively addressed by the administration...”
As planned we have had another year of deficit this year, albeit smaller than forecast, and this budget and medium term financial strategy predict a further deficit in 2022/2023 and a net cumulative deficit of over £20 million in the years to 2028. Once again if unaddressed this deficit will leave the council in a marginal or unviable position by the end of the period.
Without significant income growth, cost management, asset divestment, borrowing, or all four the borough will be in trouble. I still see no concrete plan from the Conservative, now minority, administration to address this challenge.
The good thing is that a reason is given for the lack of a plan. It's because the central government has said not to make any changes during the pandemic and to wait until it's all over and things have returned to normal. Firstly, to take this approach one would have to believe that the forecast deficit has in large part been caused by the pandemic. Secondly, ‘waiting until it's all over’ before making material changes may be politically expedient but it is management-by-hope rather than proactive planning.
The Liberal Democrat group’s view is that the forecast long run deficit is not a symptom of the pandemic even though the pandemic may have exposed it. The deficit is a longer term problem that has been building for some time. In short the Borough has too little income to deliver the services and projects it seeks to undertake. We are in fact suffering from years of 1), underfunding and 2), overreach.
The underfunding problem is partly about erratic and short term central government funding behaviour and partly about local government continuing to fail to be transparent and honest with residents about what the borough council can afford to deliver.
The overreach has been on grand projects and ‘place making’. Fine perhaps for cities and unitary authorities, less fine for small borough councils. Also, the administration has demonstrated considerable hubris in thinking it can, through its own actions, grow the local economy materially enough to drive additional council income in a meaningful time frame. It has only around £30 million (excluding the benefit pass through) of annual income, around half of which is spent on council employees.
It's clear to the Liberal Democrat group that this council needs to focus more on the unglamorous but necessary tasks of running the local services well - waste collection & recycling, parks & community facilities, planning services and the ongoing maintenance of neglected council owned facilities. It also needs to rightsize its operations to deliver these services; for example, either we outsource or we don’t - from a cost perspective alone we seem to have achieved the worst of both worlds; either we digitise or we don’t - commercial businesses are driving material savings out of their operations and improving customer satisfaction by leveraging the digital revolution, we seem to be slow at driving either of these benefits.
The more positive story of the council’s finances is about the asset base which we owe to countless accumulations by previous councils; it is significant and has potential in some cases, such as the Town Hall itself, to be leveraged for income and in other cases to be sold off to temporarily plug the gap between income and outgoings. This does not, however, solve the longer term structural problem the borough has and which is hard to solve.
Moreover, the asset base hides some big challenges coming at us, for example in maintenance costs. For the eagle eyed who have bothered to read to the bottom of the asset management strategy paper you will see we have to spend £15 million on the maintenance of two sports centres and a further £8 million on a car park over the coming years making a total of £23 million, which is over a third of the £65 million planned maintenance programme on council owned assets. Where’s the plan to fund this? I see none.
As I said last year, housing and business park growth in the Borough over the coming years will help with direct and indirect income over time, but it will take a long time to kick in and will no doubt have front loaded associated costs. Meanwhile we are failing to do some simple things, for example the administration has chosen to hold parking charges flat for next year when inflation is running at 5.5% and our input costs are rising with it. This simply makes no sense and means that one of the council's key income streams will be inflated away in real terms, perhaps because of the belief of this administration in the tenuous link between competitive parking charges and local economic growth.
I have no doubt that central government will help council income by throwing grants at local government in the run up to the next election in 2023 and make promises it probably can’t now afford given the recent eye-watering central expenditure, but that won’t solve the long term structural problem we have here locally.
It's a difficult situation and it calls for transparency, honesty and hard decisions. No more grand projects or the same reactionary obedience to the central government diktat of “sit tight, it will be alright”.
So in summary, my closing is pretty much the same as last year except this year the Liberal Democrat Group will abstain on, rather than support, the budget. The predicted losses in the medium term financial strategy are concerning and appear to have no viable associated mitigation plan at the moment. We hoped we would see this proactively addressed by the administration. This is not ‘playing politics’ as the opposition have been accused of, it's being practical and being honest with the residents.