This is a budget of tough decisions (From York Press)

This is a budget of tough decisions

9:34am Wednesday 8th February 2012 in Features

The city council’s proposed budget for the next two years is a mix of giving with one hand and taking with the other. It will affect everyone in the city, reports STEPHEN LEWIS.

IT HAS been described as one of the toughest council budgets in a generation. Council tax in York is to go up by 2.9 per cent and spending on of services is to be cut as the authority struggles to balance its books in response to Government funding cuts.

Assuming the ruling Labour group’s proposed budget is approved by full council on February 23, almost £20 million worth of cuts will be made over the next two years.

That sounds like a huge amount from a revenue budget of £123.9 million.

It isn’t that simple, however. The cuts total £19.7 million – but they will be balanced by increased spending in other areas of £18.4 million.

There will certainly be a reduction in spending overall – in 2013/14, for example, the authority expects as a result of this budget to spend £122.2 million, £1.7 million less than it did this year.

And taking into account York’s steadily growing population, the ever-increasing demand for services, and the rise in inflation, huge pressures will be placed on the council’s ability to deliver services. But it’s not the slash-and-burn scenario that headline figure of £20 million in cuts might suggest.

There are a number of other unusual features about the budget. For the first time, the authority is looking to agree a two-year budget, rather than just a one-year budget.

“That will give stability to our plans, and to our workforce,” said Labour council leader James Alexander.

More controversially, the Labour group has chosen to reject an offer of £1.8 million of Government funding, which would have enabled it to freeze council tax for the financial year starting in April (see panel).

There is also almost £28.5 million set aside over the next five years to create an Economic Infrastructure Fund, for spending on projects such as buses, Park & Ride, roads, Reinvigorate York, and wi-fi.

This money does not come from the council’s revenue budget, however, and so does not affect other spending decisions.

Some £10 million will come from Government money the authority receives for building new council homes, or bringing others back into use. The remaining nearly £20 million will be borrowed.

Coun Alexander’s avowed aim is to create a budget that helps the city’s economy to grow, while protecting services to the most vulnerable. But while it is true that – unlike many other local authorities – there will be no libraries, children’s centres or leisure centres closed as a result of this budget, there will, nevertheless, be some real cuts in services that will affect everybody.

“This is a budget of tough decisions,” Coun Alexander said. “But we will be a more lean and efficient organisation over the next couple of years, and will come out of this a better organisation.”

Here is our own guide to the budget to help decide for yourselves whether you think that is so.

Spending increases

There are a number of areas where spending will increase over the next two years under the budget, to the tune of £18.4 million altogether. These include:

• An extra £1.5 million on adult social care and an extra £500,000 on children’s social care – the £2 million cost of these to be met by the 2.9 per cent increase in council tax (which will raise an extra £2.1 million). The money will be used to meet the increased demand for adult social care and to work with the families of disadvantaged children so that they do not need to be taken into council care.

• A £2.5 million Delivery and Innovation Fund – money that will be invested in finding better, more cost-effective ways for the council to provide services, with the aim of saving money in the long run.

• Staff increments and salaries – an extra £1.7 million over two years.

• Increases in staff pension fund costs – an extra £1.73 million over two years.

Budget savings

A total of £19.7 million of savings are identified over the next two years. Some of these come from cutting jobs and services; some from reorganisation or working more efficiently; some from better accounting; and some from increasing what the council charges for services (including an increase in parking charges).

The savings, listed by council department, are as follows:

• Adults, children and education services: total two-year savings of £8.714 million

Despite the council insisting it wants to protect the most vulnerable, the biggest savings fall in this department – partly because it is by far the biggest-spending council department.

Savings include:

Personal care budgets – £505,000
Some customers may have to pay more for care out of their ‘personal care budgets’ although not more than “is deemed affordable,” the authority says. Personal care is means tested, and Coun Alexander says there will be a move towards more targeted provision of care to help those who need it most.

Elderly people’s homes – £886,000
The savings will come from closure of two elderly people’s homes as part of an ongoing shake-up of such homes.

Children’s homes/ children in care – £800,000
The authority aims to look at ways of intervening with families earlier, and to give them more support, so as to reduce the number of children being taken into council care.

Support for parents to have contact with children in care – £204,000
The savings would come by setting up a dedicated centre for parents to have contact with children in care, rather than holding such meetings at different places.

Supported living for people with disabilities – £310,000
The savings to come from efficiencies, including greater use of telecare.

Adult and children’s services budget review – £397,000
A reduction in budgets that were underspent in previous years.

Day and respite care – £350,000
‘Modernisation’ of small day care and respite care facilities. This should not involve a reduction in service for carers, stresses council chief executive Kersten England.

Supported employment – £200,000
Review of the council’s two supported-employment schemes – Yorkcraft and Greenworks – which between them provide employment for 50 people with physical and learning disabilities.

• Communities and Neighbourhoods: total two-year savings of £5.9 million

Cuts include:

Neighbourhood Management Unit – £732,000
Seven jobs will go from the unit (saving £276,000); ward committee budgets will be cut by £220,000; discretionary rates relief paid to community halls, sports organisations, museums etc will be scrapped temporarily, saving £54,000; and there will be a review of voluntary sector grants and the scrapping of the voluntary sector fund, saving £182,000.

The jobs going are mainly administrative, says Coun Alexander – and the aim of the review of the unit is to devolve decision-making to teams who work in the front line.

Roads maintenance and gritting – £697,000
A reduction in gritting routes will save £370,000; reduced gully cleaning on local streets £100,000; reduced road repairs £200,000. Sixteen full-time jobs will be lost over two years.

Rubbish – £384,000
Closing the Beckfield Lane waste recycling centre will save £130,000. An increased charge for deliveries to recycling centres by contractors will raise an extra £50,000, and reduced costs at recycling centres will save £125,000.

Smarter York – £186,000
Reduced grass cutting and other street maintenance, with potential redundancies in 2013/14.

Parks and open spaces – £97,000
Up to three park attendant to go, plus a park ranger.

Arts and culture – £331,000
A 20 per cent cut in York Museums Trust grant will save £300,000); a ten per cent cut in Theatre Royal grant £31,000.

• City Strategy: total two-year savings: £2.591 million

These include:

Parking charges – £344,000
Parking charges to be increased by 20p per hour (residents) and 10 per hour (non-residents).

Concessionary fares – £250,000
Park&Ride – £200,000
Park & Ride fee for those with concessions to increase to 60p in 2012/13, then 70p in 2013/14.

Future Prospects – £175,000
A review to look at alternate ways of providing the job training service.

• Customer and Business Support: total two-year savings of £1.863 million

HR savings – £159,000
Five staff to go.

• Improved income collection/ debt restructuring – £760,000

• Chief Executive’s Office: total two-year savings of £253,000
Five posts to go.

• Corporate savings: total two-year savings of £160,000
Two assistant director posts to go.

Why not freeze council tax?

Whitehall has offered every council in England a one-off grant to enable them to freeze council tax this year. Communities and Local Government Secretary Eric Pickles said town halls had a ‘moral duty’ to accept the money.

York has decided not to accept the cash, which would amount to about £1.8 million.

There are a number of reasons for this.

First, putting up council tax by 2.9 per cent will raise £2.1 million – leaving the council with an extra £300,000 to spend than if it accepted the Government’s offer.

Second, the council is determined to set a two-year budget.

Third, and perhaps most important, Labour says it would need to impose a very large council tax increase – of at least 4.5 per cent – in 2013/14 if it froze the tax this year.

This is because it would have to both replace the £1.8 million which it would lose from its budget when the one-year grant ended, and further put up council tax to cover increased costs (such as increased demand on services and inflation).

If the Government were suddenly to impose a cap on council tax, York would never be able to make up the money it had lost.

What other parties say...

Ian Gillies, Conservative leader: “The proposed budget penalises the York taxpayers unnecessarily, discourages residents and visitors from the city centre by using car park receipts as a cash cow, takes away rate relief from community halls and other organisations mainly run by volunteers, and borrowing will be increasing council debt dramatically. Coun Alexander inflicts policies which in many cases do no more than satisfy the vanity of him and his Cabinet.”

Carol Runciman, Lib Dem leader: Because the budget proposals were produced so late, opposition groups had had very little opportunity to properly scrutinise the proposals, Coun Runciman said. “But one of the things we took pride in as a Lib-Dem administration was keeping road surfaces up to scratch. There is a cut in the road maintenance budget.” She was also dismayed by the cuts to voluntary groups, which often provided vital services more economically than the council could.

Andy D’Agorne, Green leader: “‘The blame for the scale of these cuts lies with the Con-Dem Government. But Labour has got some priorities wrong: funding for the homeless, debt advice, ward committees and support for the unemployed is being cut, yet James Alexander can find £2.5 million for a ‘Delivery & Innovation Fund’, from which he can personally approve spending of amounts up to £100,000 without any public scrutiny.”