Budget speech by Jo Lovelock – 23rd February, 2016:
In all my budget speeches over the past few years I have often needed to remind the Council that we were facing unprecedented cuts in our grant by the coalition government, but none of those previous years compares with this year. I have rarely felt so angry and dismayed than I feel about what this Conservative government is inflicting on Reading.
In all my years as a councillor we have never faced this level of cuts, without any warning from the government and with no consultation whatsoever.
To expect us to cope with an additional £5million cut in our grant with only 7 weeks until the budget proposals needed to be finalised was bad enough, but to add insult to injury we then had “panic Monday” (Just the following Monday after the budget papers went out) when suddenly the government found an extra £300million for the next two years as “transitional” funding for those Councils most affected by the change in grant formula. It was apparent that Tory Leaders, especially in the south had rattled the government enough to find this money – it’s not clear exactly where it will come from. No doubt it is quietly being cut from some other budget that the Chancellor hopes will not be noticed.
Well, you might think, that might help a bit, but to discover that the bulk of this panic funding was blatantly to go to the most affluent Conservative areas with little or no help for urban areas with most needs and pressures confirms everything you need to know about this government. I hope no member of this council will try to defend what has happened.
In case some of you haven’t heard the figures or just to remind you all about the differential treatment for this transitional one-off funding for two years:
- RBC – receives £400k
- Slough – receives nothing
- Bracknell – receives £920k
- RBW&M - receives £1.3million
- W. Berks – receives £1.4million
- Wokingham – receives £2.1million
So we lose an extra £5million and get back £400k and Wokingham gets 5 times that. Over the years of the Coalition and now Tory Government every man, woman and child in Reading has lost £150 per head of population in government grant and in Wokingham the equivalent figure is just £66 per head. There is no justification for that and I hope no Reading Councillor will try to justify it.
And what do we get from our M.P.s? Silence from the west and a smug boast from the M.P. for Reading East about his role in securing Wokingham so much money and yet another attempt to smear Reading council as his pathetic excuse for not standing up for Reading.
It is also worth adding that as part of this new settlement the government, after years of trying to insist that the council tax was frozen, has now assumed councils will put up the council tax by the allowed 1.99% plus an extra 2% towards the spiralling costs of adult social care which this government has consistently failed to fund adequately at a national level. Even our Conservative neighbours, who tried to tow the party line by freezing, now find themselves having to put up the Council tax by similar amounts, but are still slashing services.
The Government’s main excuse for this sudden change of formula is that Councils in the South have higher levels of business rates because of our greater affluence. However they are not intending to bring in a new regime for the retention of business rates for another 4 years and there is no clarity yet about how any new system might work - given that currently we are only allowed to keep 27pence in every £ of our business rates we can only hope that position will improve. However what sort of government imposes a new formula before deciding how to deal with the business rates? It’s a bit like an employer offering a big pay rise in 4 years’ time as long as you will take a pay cut year after year in the meantime until you receive virtually no salary at all – you will see our grant is set to fall from £40.3 million in2013/14 to less than £2million over the next 4 years. Imagine being told your salary was going to be cut by 95% but no promise it will go up after that!
So what do we do about this situation not of our making?
In the report before us is a list of very regrettable cuts we have already reluctantly agreed to at Policy Committee. These cuts are impacting in all areas and are also affecting partners, in particular the voluntary sector.
There is also a list of service areas where we will need to bring forward further cuts over the coming months and years for consultation. It would have been irresponsible to try and rush through any proposals in just 7 weeks. We also need to consult as we have done on the proposals already agreed – that would have been impossible in the time.
The report therefore outlines some one-off measures in order to make a balanced budget, which we are required to do, unlike the government or the NHS. It will be necessary to replenish the one-off measures over the coming year.
We will also be putting the Council Tax up by the amount assumed by the Government in the settlement. We recognise that will not be welcome news for residents, but hope they understand what the government is doing to Local Government and the alternative is £2.8million more cuts to find.
Despite all the bad news this Labour Council remains determined to do the best it can for Reading and its residents, as outlined in the Corporate Plan. In reducing budgets for children and adult services we are ensuring we are protecting those people most in need of support and protection, even though there may be less universal services. We are maintaining the street care services everyone relies on. We are not closing libraries as our neighbours are doing. We are continuing to make successful bids for funding to help protect our heritage and culture and improve our transport infrastructure. We take a leading role in partnerships with the statutory, business, voluntary and community sectors to ensure we pool our dwindling resources in the best way.
The Government’s change of policy regarding the Housing Revenue Account has severely affected our housebuilding plans but we are looking creatively at how we can develop a wholly owned housing company to provide homes and we are still planning to build some council housing on sites such as Conwy Close.
I would recommend you all read the Corporate Plan to fully understand that although we face very severe challenges this Labour Administration remains focused on priorities which have an impact on Reading and directs resources towards those who most need them.
Finally, I would like to thank all the officers who work tirelessly to try and keep services going despite the financial and other pressures. They have put a huge amount of work into this budget and much more is to come as we face the further cuts over the coming months and years.