By Cllr Keith Baker, Leader of Wokingham Borough Council
2016/17 and beyond is going to bring many challenges, and even tougher decisions than those we’ve faced before.
On December 17 we learnt the devastating news that the proposed finance settlement from central government would see a 50 per cent cut in the Council’s main grant compared to the 27 per cent average for unitary authorities; a sum of approximately £6.3million.
We’d been planning for a bad settlement, but it was far worse than predicted – therefore continuing our status as the lowest funded unitary authority in the country.
We’re certainly didn’t take it lying down. Since then, we’ve been fighting for a fairer settlement for our residents. With the support of local MPs we made several representations to Ministers. As Leader of the Council I met with the Minister and John Redwood MP met with the Secretary of State.
And this week, (February 8), central government announced these proposals would go ahead as planned. However Ministers have listened to our concerns and have agreed a transitional grant for Wokingham Borough Council of £2.1million for 2016/17 and again in 2017/18. I am grateful for MP’s support.
“This transitional grant is temporary, and it will be cut after two years. It will allow us extra time to plan how we will deal with the future. However it makes no change to the extent of the cuts from central government over the four year period of the settlement. Whilst the temporary transitional grant provides us with some breathing space, and time for a more considered approach to our savings, when it is removed in 2018/19, the gap in funding still has to be found – either by cuts to services or additional income or both.
Whilst this transitional grant is welcome, changes still need to happen. The cut in our overall funding during the four years is still severe. By the end of 2019/20 we face almost impossible challenges as the council loses £20million and moves into a negative grant of £7million. By then the government ongoing grant will have been cut by 74 per cent, and residents will be paying 91 per cent of the costs of running services. The impact of inflation, and demographic changes like increased demand for adult social care, will make our challenge even more severe.
We are on the right path to secure our future. We will continue to be innovative but tough choices will be made as savings and extra income have to be found.
Funding from central government has always been biased towards deprivation. As a consequence, an area like ours, with low levels of deprivation, received little in terms of government grant. As a result, the services we provide are almost exclusively funded by our council tax payers (80%).
So how did we receive the worse settlement in our history? This time around, central government changed the way it does its calculations and now includes council tax when arriving at the grant cut calculation.
The new settlement hits our residents three times over. Firstly they have to pay the largest contribution through council tax towards local services because of past poor settlements; then their significant contribution is used to calculate the grant reduction. Lastly government also presumes we will agree to the highest possible council tax rise for the next four years (2 per cent council tax, 2 per cent adult social care precept) when calculating future cuts in grants. If we don’t, the level of cuts will remain the same, and our financial challenge will be unmanageable as we have to make savings equivalent to the difference – all brought about by severe reductions on an already meagre grant allocation. We don’t wish to raise council tax levels but our hand is forced.
We’re being penalised for being efficient, self-sufficient and embracing a responsible approach to housing demand, because although currently we can plough this money back into services and regeneration, by 2018/19 it will be cut by at least a third and national consultation is already underway to consider its future.
Government is simply redistributing funding to areas of the country that already receive higher levels of grant than us. That’s not morally right. Why should we be penalised?
The council will continue to look at every aspect of the work it does. We will have to look at generating more income and moving some non-statutory services towards paying for themselves. We will also have to look at more joint working with our neighbours.
We will make the situation work, despite the difficulties, and continue to provide high-quality services at the lowest possible cost.
Our full budget proposals will be discussed at Council on February 18, which can be found on our website at: www.wokingham.gov.uk/council-and-meetings.