Following on from conversations on our local government grant with a number of colleagues elsewhere in the UK.
In the case of Medway, the cut to our Local Government Grant will be approaching £12 million this year. With the prospect of it reducing by another £20 million over the three years that follow. A truly shameful sum given the groans of Conservatives about floor damping.
This cut is not just floor damping. It is removing the floor from under the feet of hard pressed Medway people.
What Tories overlook, and evidently so in Medway because it is never discused, is the significant variations of alternate income between Councils. Tories make basic assumption that income streams from Council tax and other sources are the same in every area.
They assume a level playing field where one does not exist.
For some councils, like Westminster for example, the grant from government is a fairly small proportion of the their overall income. This is true even in the North, for York council the grant is only about 40% of their total income. For Barnsley it is almost 80%.
To mitigate the drop in grant councils like these will have options. Increasing parking charges in Westminster, for example, by a modest sum will replace the loss they are expecting. In Medway the punitive increases in fines from CCTV cars and traffic fines, under the name of enforcement will be key.
What about the other options for increasing our income? Well planning fees are dropping, because nobody can afford to build, this is a national problem for all councils. One of the biggest income generators are care packages, but we are having to outsource more and more which takes them away and again, increases here would target the most vulnerable in society directly. Across the whole range of potential income streams, weaker economy areas just don't have the options to available to others.
There is council tax of course which is being frozen. But look at its impacts; In Surrey, the council are facing a cut of around £13 million in grant next year. A 2.5% increase in council tax on the properties in leafy Surrey would bring in around.. er.. £13 million to the council. Handy. In Medway, which has significant numbers of poorer housing and far more differentiation an increase in tax does not generate revenues like this.
In the end poorer areas including Medway will have very little prospect of dealing with this massive loss of finance by finding other money to invest in services. We only have one real option. We can only spend tens of millions less. Which will mean less services, less jobs, less council.
Pickles says, only 'lazy' councils will cut services. He couldn't be further from the truth. Only wealthy councils will be able to lose this much money and not cut jobs and services.
Hard pressed councils in hard pressed areas, who have to get the most from every penny and work hard to get it, will be the ones who have to cut the most.
If this happens, Councils in the South East may have to repatriate money to London as we are overwhelmingly reliant on the capital for jobs.
The weak are an easy target for the Conservatives. Medway will suffer not only because of the cut in grant but because when compared with leafy Tory shire areas we do not have the same measures to increase income to mitigate cuts.
In the case of Medway, the cut to our Local Government Grant will be approaching £12 million this year. With the prospect of it reducing by another £20 million over the three years that follow. A truly shameful sum given the groans of Conservatives about floor damping.
This cut is not just floor damping. It is removing the floor from under the feet of hard pressed Medway people.
What Tories overlook, and evidently so in Medway because it is never discused, is the significant variations of alternate income between Councils. Tories make basic assumption that income streams from Council tax and other sources are the same in every area.
They assume a level playing field where one does not exist.
For some councils, like Westminster for example, the grant from government is a fairly small proportion of the their overall income. This is true even in the North, for York council the grant is only about 40% of their total income. For Barnsley it is almost 80%.
To mitigate the drop in grant councils like these will have options. Increasing parking charges in Westminster, for example, by a modest sum will replace the loss they are expecting. In Medway the punitive increases in fines from CCTV cars and traffic fines, under the name of enforcement will be key.
What about the other options for increasing our income? Well planning fees are dropping, because nobody can afford to build, this is a national problem for all councils. One of the biggest income generators are care packages, but we are having to outsource more and more which takes them away and again, increases here would target the most vulnerable in society directly. Across the whole range of potential income streams, weaker economy areas just don't have the options to available to others.
There is council tax of course which is being frozen. But look at its impacts; In Surrey, the council are facing a cut of around £13 million in grant next year. A 2.5% increase in council tax on the properties in leafy Surrey would bring in around.. er.. £13 million to the council. Handy. In Medway, which has significant numbers of poorer housing and far more differentiation an increase in tax does not generate revenues like this.
In the end poorer areas including Medway will have very little prospect of dealing with this massive loss of finance by finding other money to invest in services. We only have one real option. We can only spend tens of millions less. Which will mean less services, less jobs, less council.
Pickles says, only 'lazy' councils will cut services. He couldn't be further from the truth. Only wealthy councils will be able to lose this much money and not cut jobs and services.
Hard pressed councils in hard pressed areas, who have to get the most from every penny and work hard to get it, will be the ones who have to cut the most.
Another concern is the suggestion that business rates ought to be repatriated to the areas they came from. The system where the wealthy areas who can charge what they like, help to support the areas where business needs to be encouraged with low rates, should be dropped? Once again the money flows to wealthy areas and away from the areas of greatest need.
If this happens, Councils in the South East may have to repatriate money to London as we are overwhelmingly reliant on the capital for jobs.
The weak are an easy target for the Conservatives. Medway will suffer not only because of the cut in grant but because when compared with leafy Tory shire areas we do not have the same measures to increase income to mitigate cuts.
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