Wednesday, 29 January 2014

Council Tax and budgets

Last night's full council meeting was long and challenging with some difficult decisions to be made around budgets and council tax made more difficult by the uncertainty around funding for local government thanks to the changes the British government has made to council tax grants.

The changes to the council tax grants mean that in 5 years' time all money spent by parish and town councils will come from the council tax precept rather than a mixture of precept and money from the British government as it is now. It means that the £10k or so a year that Stirchley & Brookside Parish Council gets as a grant paid out of general taxation towards the cost of statutory services it provides will have to be added on to council tax instead or services will have to be cut elsewhere to cover the shortfall. It's basically a way for the British government to raise taxes and deflect the criticism away from themselves and onto local councils.

At last night's meeting we finally had a clear view of what the parish council's income was going to be for the next year and that meant a reassessment of the budgets that had already been agreed by the three committees at the end of last year. These budgets cover staffing costs, office costs, environmental maintenance, community initiatives, etc. and come to about £240k a year. It sounds like a lot of money and it is but the parish also gets a lot for that money. That doesn't mean that we can continue spending that much money though, especially when so many people are struggling which is why I couldn't agree with a rise in the parish council's council tax precept.

The parish council has a budget shortfall this coming year and for the foreseeable future and it is going to get worse. There are increased costs for existing public sector pensions for council staff thanks to underperformance of the superannuation scheme and the legislation that requires employers to provide a contributory pension to all employees also applies to the parish council which is another cost that will hit us next year. Add to that the swingeing cuts to the council tax grant and constant demands on the parish council to provide services that are being cut by the borough council and the British government and it paints a dismal picture.

At last night's meeting several options were presented for the budget, all of which involved spending money out of the council's reserves - money that is set aside to pay the bills for a few months if something goes disastrously wrong. These reserves have been dipped into the last couple of years to subsidise spending against my advice making the difference between income and expenditure increasingly large year on year. The council voted to increase the parish council's council tax precept by about 3% which is about £2.60 for the year for a Band A property, or 5p a week. To cover the shortfall in funding the council also voted to spend a few thousand from reserves.

Myself and Cllr Watkin abstained from the vote. I don't know Cllr Watkin's reasons but from past experience I suspect they were the same as mine - although the amount of the increase is tiny, it's still an increase and we should be looking at how we can reduce costs instead of increasing taxes to carry on spending at the same rate.

I pointed out that £7k could be saved without cutting services by abolishing councillors' allowances which predictably attracted zero support. There are next to no costs involved in being a parish councillor other than your time and a few phone calls. I think we need to cut costs with South Telford Rights of Way Partnership - it's a great service which maintains and promotes mainly "rural" footpaths and rights of way and the council gets a lot of value from it but it costs us £5k per year to do something that the borough council is supposed to do. The Gorge Parish Council have already withdrawn from STROWP leaving just three parish councils footing the bills. I think the parish newsletter also needs to be re-evaluated. There have been problems with delivery meaning some people often don't get the newsletter and in this internet age the majority of people have access to the internet and can get whatever information they need online. Doing away with the printed newsletter would save £2k a year.

So with no option of cutting costs instead of raising tax I abstained on the vote on setting the precept. I didn't vote against it because from an accounting point of view it was a sound decision but I won't agree to a tax increase without first looking at ways we can cut costs. I will continue to look for ways to save money with minimal impact on services but with some of my fellow councillors talking about increasing services while we are looking at a financial black hole, I don't hold out much hope of meaningful change this side of next year's election!