The Evening Press launched a campaign last week to oppose York's evening parking charges and the banning of off-street parking. In the first of four articles, City of York Council leader Steve Galloway talks about the financial crisis which led to the charges being imposed.

I LAST wrote in the Evening Press in March about the financial issues facing City of York Council. I explained then that, 12 months ago, the council budget was in a mess. Inadequate Government grants, cheese-paring of service standards, sale of assets and the running down of the council's reserves were mainly to blame for the crisis.

The new Liberal Democrat leadership had inherited a £2 million budget gap for 2003/04 and faced a £10 million hole in the following year's income. Central government was continuing to transfer services to local government without adequate funding, while customer numbers and demands were becoming more difficult to meet against the background of, for example, an ageing population.

The need for firm and decisive action to remedy years of neglect was acknowledged by the media and most residents. The Evening Press helped us last autumn to find out what people's priorities were for dealing with these financial problems.

There were a wide variety of responses to the consultation. Many wanted to preserve public service standards, some were critical of the council tax system as a way of raising revenue for local services, others favoured increasing charges to pay for services.

There were no easy decisions. Solutions were made more difficult to find by central government policies:

1. A ceiling on council tax increases was introduced (this hit York particularly hard as it had the 13th lowest council tax level in the country - now the tenth lowest and less than anywhere outside London and the south-east)

2. Although its services are independently rated as "good", the council spent less per head of population than other authorities. This left less scope for efficiency improvements

3. Government grant to the city - compared to other areas - was, and remains, derisory. York gets nearly £250 less per head of population in government grant than the average for other councils. If York received even the average, then there would be no need for tax or charging increases for local residents.

4. York's relatively buoyant businesses pay out more than £64 million to the central government business rates pool. We receive back only around £51 million to spend on local services in the city. business rates have been tied to the rate of inflation for many years now and account for a substantially smaller part of the income that government has made available to fund local services, than was the case five years ago.

In making budget proposals for 2004/05, the council had to balance a variety of needs and pressures, the most important of which were:

setting a responsible budget, which took account of known expenditure increases while not creating future problems for the city

maintaining funding for education despite significant spending pressures

responding to consultation with York residents, from a variety of surveys.

The key requests from these were for the council to:

work more with other organisations to reduce crime

spend more on social services, young people and recycling facilities

improve the appearance of the city, and

make efficiency savings within the council budgets.

Given this framework and the council's top priority of creating a "safe city" and a "city to be proud of", the council budget strategy was determined.

The council found £4 million in efficiency savings, pensioners got a "best ever" travel deal including, for the first time, the option to use their allowance to offset parking charges. Discounts for those using small, environmentally- friendly, vehicles were introduced for the first time anywhere in Britain. The York Pride campaign was sustained and Safe City initiatives included the introduction of 24-hour-a-day monitoring of CCTV cameras. Years of neglect of our buildings and highways began to be addressed with the latter enjoying the largest-ever resurfacing programme.

However, in the absence of a fair deal on grants from central government and with a new ceiling on council tax levels, funding to pay for services had to come partially from an increase in charges.

The voluntary sector were consulted on the proposals on January 23, as was the Federation of Small Businesses on February 2. Both accepted that difficult decisions had to be made. At that time, neither criticised the charging plans.

I will look at the central York economy in my next article and will then move on to deal with transport and parking issues. In a final article, I will look at what the options for change are, and I will use that opportunity to address any new suggestions that readers might have.

Updated: 10:03 Wednesday, July 07, 2004