Funding equalities

People often criticise councillors for never agreeing – but some things feel so unjust that we can all stand together and present a united front.

The inequalities in the funding councils like ours receive from government is just such an issue.

Representatives of the Conservatives and Lib Dems joined me and some of our local MPs to lobby directly to the government.

We put our case direct to Marcus Jones – the Parliamentary Under Secretary of State for Communities and Local Government.

In my view, our funding settlement is completely unfair in that it penalises us now for past decisions where we accepted government options available to us.

For example – we were told that if we froze our council tax, a 0% rise for our residents, we would receive the cash we would have gained from a 2% increase. That money has not been added into the base budget, it was to come through grant and now that grant has been cut. It is costing us £14 million every year.

That is on top of the disproportionate way councils like ours are affected. Kirklees is the 8th lowest funded council in the country – and the second lowest funded Metropolitan council per head of population. That is despite many areas of need.

The purpose of our meeting was to appeal directly for help to bridge our funding gap.

Kirklees is heavily dependent on its government grant, and like other authorities in a similar position, has seen a much greater cut to its overall level of funding. With our council tax and business rates funding base not as strong as most other authorities because the vast majority of properties fall in Band A and most of our businesses are SMEs, the net funding loss for the Council over the next three years will be £10.8m.

Changes to New Homes Bonus and Education Services Grant have added a real financial issue which risks undermining our financial plans.

The 2017-18 provisional figures and latest population statistics show Kirklees spending £639 per head of population. The average for mets is £747.

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The combined impact of a fundamentally unfair distribution, an existing low funding base, rising demands, and the additional negative impact of the changes I mentioned earlier means there is an unprecedented shortfall, which we have limited options to put right.

We have saved almost £130 million already. Our future savings plans risk being harmed by government policy. Local residents and businesses are the ones paying the price for that, and all can see the inequality in this. A united front to government was important – it is only that way that they see that our efforts are not posturing or playing politics – they are real, and urgent, and  vital to stop us losing more and more vital services.

 

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Quarterly budget update

The huge financial challenges facing the council are back in the spotlight after the publication of a new report.

The document, which was discussed at this week’s Cabinet meeting, shows a potential budget overspend for the current financial year, even though we’ve continued working exceptionally hard to save money wherever possible.

It’s a result of the ever-growing demand for social care – in both children and adult services – which means there’s greater pressure to look after vulnerable people in our communities. For example, people are living longer with more complex needs such as dementia, while we have a duty to keep children safe from harm. At the same time, of course, we are having to deal with further cuts in the funding we receive from central government.

The figures suggest that current spending would lead to a two per cent overspend this year, which equates to £6million and would put even more strain on council resources. Sometimes people ask me why we don’t use our reserves to plug some of the financial gaps, but we are already doing that in a carefully managed way.

There are problems with using up your reserves. For example, you can only spend them once – once they’re gone, they’re gone. If we had taken certain people’s advice a few years ago and started spending reserves without proper controls, they would have run out long ago. Instead we’ve been careful and responsible. Yet, at the current rate of spending, our reserves will still be at a critical level by midway through next year – that’s the serious reality of our economic situation.

Following this week’s Cabinet, plans are being developed to reduce the predicted overspend and we will continue monitoring spending. I have asked for detailed reports, on a quarterly basis, to monitor progress against the budget.

It’s vital to remember that, overall in Kirklees, we’ve already responded to government cutbacks by saving more than £106million, with another £29million planned over the next few years. There’s no doubt that northern areas are being disproportionately hit. Add the figures for all of West Yorkshire and the combined cuts forced on Bradford, Calderdale, Leeds, Wakefield and Kirklees are upward of £700million, with lots more to come…….the figures are astonishing.

New spending pressures appear all the time and local councils are being given more and more responsibilities, yet there’s no end in sight to the cuts we need to make. You have to ask: When central government are drawing so much money from the people of Kirklees through income streams like VAT, income tax and vehicle tax, what exactly are they giving back to the area?

That’s one reason why the Local Plan is so important. It will help us to create jobs, meet local housing need and contribute to Kirklees being a successful and vibrant place to live and work. Our financial challenge is also the biggest reason why, as a ‘New Council’, we are encouraging local people to do more for themselves and each other.