2020’s budget amendments: a little light analysis

First a little background: as most people are/should be now aware council finances have been squeezed since about 2010, that’s before austerity kicked in so it’s not just the fault of the Coalition, and whereas the Local Government Grant used to fund about two thirds of council expenditure it’s now trending to zero. And this at a time when increases to council tax have been limited to 2%/year. That’s meant that every year councils have had to make savings which has meant the cutting of services and leaving the ones that remain short of funding.

In the case of Cambridgeshire County Council the Tory fear of UKIP between 2013 and 2017 meant that the Council did not raise council tax at all during those years depriving itself of about £22 million/year.

CCC has done a ‘good’ job of cutting its costs but each year as it enters the budget setting period it finds itself with a deficit which has to be covered and that means more savings. The Council has an active program using its Transformation Fund for what industry used to call ‘business process engineering’. Despite this deficits remain.

During 2019/20 there have been significant overspends in Children’s Services and expected revenues from the Council’s investment have been less than planned.

For the budget the Council has brought forward transformation changes in Adult Social Care and Children’s Services and has proposed to increase charges significantly in the former. But even after these changes there is still a deficit of a little over £4 million without raising council tax.

Coming into the final stages of budget setting the Tories decided to change the system (click here for my narrative on that). This meant that the service committees all submitted budgets and then officers added them up.  This ‘officer budget’ along with its deficit was then to be balanced by amendments from the three parties.

Note that increasing council tax by the maximum 1.99% allowed would raise £5.8 million.

The Tory amendment (click here)

The headlines:

  • council tax increased by less than the maximum allowed (1.59% vs 1.99%);
  • funds established for ‘climate action’ (£15 million) and ‘community capital projects’ (£5 million);
  • investment in highways. £200 thousand more/year for Local Highways Initiative (LHI) schemes, and an extra £366 thousand in 2020/21 and a further £1 million in 2024/25 for highways maintenance

The Tories maintain that this is a fiscally responsible budget in that it’s balanced (although it makes no attempt to cover the deficits forecast beyond 2020/21) and claim that not going for the maximum council tax increase is virtuous. It’s neither responsible nor virtuous and the Tories policy of refusing to put council tax up in the UKIP years and not maximising revenues under the Council’s direct control has deprived the Council (and the residents of Cambridgeshire) of valuable funding to maintain and enhance services. Anyone in  business, and the Tories always claim to be the party of business, will tell you that you earn what you can when you can. The Tories have ignored this maxim.

The funds are just that ‘funds’. There’s no money in them and there’s no plans to spend them. They are examples of gesture politics.

The ‘investment’ in highways is a hotch potch. The LHI proposal is straightforward enough but the £366 thousand for 2020/21 is for highways maintenance which is normally funded by a government grant. As the Tories admit this is expected to be a little over £6 million and the Council is confident that this money will be forthcoming. Nevertheless The Tories are putting £366 thousand in the budget being the rather arbitrary difference between a planned spend of £6366 thousand and an expected grant of £6 million. Why?

The Tories announced a £18 million ‘investment’ in highways maintenance last year. This became a £3 million spend in 2019/20 increasing to £4 million in the 2020/21 budget and then to £5 and £6 million in subsequent years. The announced £1 million allows this to further rise to £7 million in 2024/25. Trouble is beyond 2020/21 a deficit is s till being forecast so there’s lots of time for these moneys to simply disappear and the loan that the Council has been using as a part of its highways maintenance funding has almost run out.  This £1 million is a case of jam tomorrow.

The Lib Dem amendment (click here and here)

Note that there are two versions of the Lib Dem amendment (and of the Labour one, see below). The first is the amendment as submitted and the second is as it would be if the Tory amendment were to be accepted. It was.

The headlines:

  • council tax increased by 1.99% and committee and councillor costs reduced by circa £120 thousand
  • investment in climate emergency related projects (£220 thousand) and funding allocated from the Transformation Fund for additional investment (£10 million) going forward;
  • a £250 thousand ‘safety net’ to cushion the impact of the increased Adult Social Care charges;
  • investment in Children’s and Early Years centres (£500 thousand) and Youth Services (£120 thousand);
  • £500 thousand extra for local highways officers to use directly to address immediate road maintenance issues;
  • investment in bus transport  (£290 thousand) specifically in cross-company bus ticketing and out of hours services; and
  • funding for junior travel ambassadors (£40 thousand) and a civil parking enforcement pilot (£20 thousand).

This is arguably a fiscally more sustainable budget than the Tories’. It’s proposed climate emergency fund utilises money which already exists and the higher council tax increase flows through to begin to address the deficits in future years.

The list of extra spends is perhaps too long and lacks focus but at least it follows through on the Council’s commitment relating to its climate emergency declaration, the investment in children’s centres etc attempts to stop the continuing decline in these essential services and the money for highways addresses an underfunded element of its maintenance budget.

The money for bus transport is perhaps too small to make a difference and should be taken on by the Greater Cambridge Partnership and/or the Combined Authority but these bodies seem to take for ever to do anything material.

The smaller amounts for junior travel ambassadors and a civil parking enforcement pilot should maybe be handled from existing revenue and funding streams respectively.

The Labour amendment (click here and here)

Note that there are two versions of the Labour amendment (and of the Lib Dem one, see above). The first is the amendment as submitted and the second is as it would be if the Tory amendment were to be accepted. It was.

The headlines:

  • council tax increased by 1.99%;
  • investment in Adult Social Care (£5.2 million) and Children’s services (£11.5 million) by reversing savings proposed in the budget;
  • funds established for Local Highways staff (£116 thousand) and highways maintenance (£2 million);
  • £80 thousand to support implementation of the ‘Health in all Policies’ agenda; and
  • £2 million drawn from the MRP fund and £8.3 million from the Transformation Fund

It’s difficult to comment on the thinking behind this because the Labour Group provided a minimal narrative to its amendment. However it’s fiscally unsustainable with a capital U, it does nothing to respond to the Council’s climate emergency declaration and although its ‘investments’ are possibly well-meaning they are indiscriminate and would undo much good work that has already been done to genuinely improve services.

The one positive feature is perhaps the ‘Health in all Policies’ item. This relates to a World Health Organisation approach on health-related rights and obligations. It improves the accountability of policymakers for health impacts at all levels of policy-making. It includes an emphasis on the consequences of public policies on health systems, determinants of health, and well-being. It also contributes to sustainable development. Click here for more information.  Strangely it was mentioned by neither the mover nor the seconder of Labour’s amendment and, like the Lib Dem item on Junior Travel Ambassadors, might well be funded from existing revenue streams.

There you have it and, because of the system, no possibility of combining the best parts of the three proposals but anyway I’m not sure I’d want any part of the Tory one and beyond the Health element the Labour amendment is just too disfunctional.

If you had to rate them and were to use something like the OfStEd scale of 1 (Outstanding), 2 (Good), 3 (Satisfactory) and 4 (Inadequate) I think I’d go for Tory 3, Lib Dem 2 and Labour 4. Comments please.



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