Tunbridge Wells Lib Dems have voted in favour of the Conservatives' budget for 2021/22. However the predicted losses in the years to come are concerning and we do not see any proposed solution to this. These expected losses must be proactively addressed by the Conservatives and we see it as our role as the main opposition to hold them to account on this.
Full text below.
The Liberal Democrat Group response to the 2021/2022 Tunbridge Wells Borough Council Budget
By Cllr Andrew Hickey
The Liberal Democrat Group would like to thank Cllr Dawlings and the officers for their hard work over the last year and for the preparation of the budget.
We recognise the constraints on income across the board and the continued year-by-year approach to central government funding of local councils, which is regrettable and causes uncertainty over the longer term. We also recognise the extraordinary economic pressures that are the result of the pandemic.
We are supportive of the 2021/2022 budget. We do, however, have some concerns.
Whilst the current year deficit will be better than forecast in Q3 of this year, it will still be a deficit. The budget predicts a further deficit in 2021/2022. Moreover, there is a forecast 5-year deficit in the medium-term financial strategy that has increased from £5.4 million in the last budget to £24.9 million in this budget, and which is more than the council’s reserves as at April 2020. This might be due to cautious accounting; however, if unaddressed it will leave the council in a marginal or unviable position by the end of the 5-year period. Without significant income growth, cost management, asset divestment, borrowing, or all four, we will be in trouble.
On income growth:
Our sense is that the current administration is hoping that local economic growth will correct the forecast 5-year deficit and that time will be bought with the disposal of council assets such as the civic centre. While the new Local Plan will indeed create growth in income as the borough’s population grows, it will also create greater demand for services and associated spending. Growth will likely be slow as it invariably is when development is involved, and increased costs will likely precede or match increased income. Also, living in hope for further government largess that increases council income after the government has had to run up the largest spending bill in living memory is just wishful thinking.
On cost management:
We see little in the budget or the medium-term financial strategy that seriously addresses the cost model of the council which it seems the administration feels is ‘about right’. We are not so sure. We would welcome a benchmarking of our cost to serve across a number of dimensions so that a fact-based view can be taken about whether our service costs are appropriate for the volume and quality of service provided. It seems to us that outsourcing for cost has to a large extent failed and, notwithstanding the pandemic, our inboxes are full of complaints about the quality of those outsourced services from the perspective of residents. Waste services continue to be a source of complaint, as does the maintenance of parks and recreation areas.
On asset divestment:
This is another option to plug the gaps over the coming years, but this is a one-shot sale of the family silver that does not fix a more systemic problem. Asset divestment, while making the books look good temporarily, has the potential to leave the town centre with one or more new eyesores to match the former cinema site, as property companies try to work out what to do with the listed buildings and bank them in the meantime. We cannot shore up our longer-term financial position on a strategy of selling off devalued and neglected assets.
So, we come to borrowing:
The council has headroom to do this because borrowings are minimal at this time; how and when we borrow is, to some extent, a technical matter. In principle, though, any material level of borrowing will need to generate a positive return over time and have a realistic benefits case. We have seen how the plan for this council to borrow on a large scale for a grand project with debatable benefits fell at the final hurdle; in the light of recent events which have changed the retail, office space and entertainment markets for ever, we can only guess at how that project would have turned out had it gone ahead. Given this track record of trying to borrow to invest we caution the administration to consider any significant borrowing very, very carefully indeed.
So in summary, we will support the budget this year. The predicted losses in the medium-term financial strategy are concerning and appear to have no viable associated mitigation plan. This must be proactively addressed by the administration and we see it as our role in the opposition to hold the current administration to account on this matter over the coming months.