Local Councillors and Their Budgets

A group of 90 “prominent” Liberal Democrat councillors, including the leaders of Newcastle, Milton Keynes and Hull councils, have written to the Times to protest against the big cuts they are supposedly being forced to make this year.

First of all, we should realise that the cuts are not as great as those councillors are suggesting.

Of course, council officials try to protect and grow their empires. More charitably, they try to protect their staff – and I’m sure that most council managers see it as a leigitmate duty to look after their people.

Therefore, those officials produce reports for councillors suggesting huge cuts to services are needed. In the case of my own local council, they claim they need to save £68 million this year when the real figure is £13 million. They do that to give themselves room for manoevre in terms of protecting their own staff and growing their departments.

Up and down the country, council officials typically arrive at their inflated figures by double counting, spin, and a curious public sector practice called budgetting “in real terms”. They are usually highly professional people, and make those figures look extremely credible. The details are all buried in weighty budget documents, that are often only dimly understood by the amateurs who make up the ranks of their councillors.

The councillors end up being presented with no option but to cut services – or so they think.

Council spending is funded by a range of sources:

  • Charges they impose for certain services (e.g. local authority searches for house-buyers)
  • The council tax
  • A share of the national business rate
  • Grants from central government

The council tax is being frozen this year, after councils imposed sustained real increases over many years. And the government grants are being cut back as part of the government’s austerity programme.

Milton Keynes, for example, whose leader signed that letter to the Times, will find its spending power cut by £7 million, or 3.31 percent. Overall, on average, council spending is being cut by 4.6 percent. Councils that face big reductions are getting transitional help that means no council needs to make cuts bigger than 8.9 percent this year.

But what about inflation? Won’t that hurt councils?

The answer is yes, but not as much as you might think. The government has announced that pay is being frozen for all employees earning over £21,000, which is most of them. And councils spend a good deal of their money on pay. Inflation will certainly be a factor that councils need to budget for (because they also buy in services whose price may rise), but inflation won’t hit them at the full published CPI rate.

The real cuts that councils will need to make, after allowing for inflation, therefore, are probably going to be of the order of 6-7 percent.

Now clearly nobody likes making cuts – especially when some of the services they provide are of such importance. But is it really not possible for councils to make cuts of that order without seriously damaging services? Of course it is. Is it possible for them to make cuts of that order without reducing their staffing levels? Probably not – but that’s not an option the council officials favour. They would rather cut services.

Given the choice between axing a bus subsidy or closing a library, and losing some of their own staff, which council manager would choose the latter?

That, of course, is where councillors come in. Their role is to represent local people, and hold the officials to account. However, they are amateurs, and all too often more inclined to side with the officials than the publlic.

I remember my own time as a humble town councillor, in a council with 13 out of the 15 seats, including my own, held by the Tories. Our town was expanding, and the new housing was boosting our income with extra council tax receipts. I argued that therefore we ought to be looking to freeze our council tax per household. However, not a single one of my fellow Tory councillors supported that view. They increased the tax in line with inflation.

And their reason for that? They said that they could easily get away with a rise in line with inflation, and the council should take the opportunity to raise as much as it could. They seemed unable to understand why anybody would fail to raise extra revenue when the opportunity was there. I fear that this attitude is all too common amongst council staff and, more deplorably, amongst councillors.

Councillors need to question everything they are told by council officials. They need to scrutinise every budgetary “fact” presented to them by council staff. They should go through those weighty budget documents, including the supporting information, and question every figure. Is that really true? What assumptions have been made in arriving at this figure? Does that figure agree with the other one on the other page?

It’s a God forsaken task, but it is at the heart of their role as councillors.

To do that questioning, and carry out that scrutiny, is not to question the honour or honesty of their officials. It is simply the councillors’ job. They are there to protect the interests of the voters who elected them. Councillors need to understand that in representing their voters, they need to take account of their voters pockets as well as their need for services.

This letter to the Times shows that those councillors are more interested in political mudslinging than in doing their job. They need to remember that their voters are taxpayers, and their voters will be saddled, along with the rest of us, with the debts the government is still running up on our behalf.

Councillors need to pay a lot more attention to their role in holding council officials to account. It is their primary responsiblility. The years when councils could spend anything they liked, and simply give the bill to the rest of us, need to end.

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4 thoughts on “Local Councillors and Their Budgets

  1. Yes councillors waste money, and if central government were to reduce its own spending and centrally collected taxes (i.e. reverse the VAT and NIC increases for a very start) as well, and reduce the grant to local councils and tell them they can raise council tax as much as the local electorate will allow, then I’d agree.

    In fact, we’d be far better off if we scrapped all centrally collected taxes and just increased council tax & Business Rates ten fold and had done with it.

    • Personally I would prefer to go the other way, i.e. abolish council tax and fund local councils entirely from central government. Councils have shown themselves over the years to be both less competent than central government, and less accountable.

  2. You should be naming names Adam, re the council you served on that increased its charges without needing to. Name and shame!

    • Since the meeting concerned, at which this was discussed, was a private one, that wouldn’t be fair. Also, I do not want to single out the council concerned (which incidentally could be entirely abolished and its responsibilities transferred to the local distirct council without any ill effects). The attitude is widespread, indeed endemic, amongst most councils.

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