Council taxes are too high, and in many places are rising too quickly. I welcome today’s news that a Conservative government would give local electors the right to demand a referendum where they thought the Council Tax was too high and should be brought down. We need such a countervailing power. We need some way of standing up for the taxpayer. I also welcome the news that they want to scrap some bits of regional government at the same time: the more the better.
Why can’t more Councillors and Councils do this? Most of them if asked agree that many voters want a lower tax. I have been consulted this year by some Councillors on the detailed budget making of a local authority (not Wokingham). It has been a useful reminder of just how difficult a task it is for Councillors.
The first problem they need to tackle when budget making is the information they get sent. All the Councils I have know over many years receive budget papers in the same useless form. Officers start on the basis that everything being spent in the outgoing year is a given. They then compile a list of “unavoidable” commitments to add to last year’s total. On goes the revenue consequences of last year’s new projects, the need to make crucial repairs to capital assets which they otherwise have not provided for, pay rises agreed, automatic bonuses, the consequences of government circulars seeking more actions by Councils (whether they are statutory or advisory), and any other item they can kitchen sink. They usually claim Council inflation is much higher than CPI inflation, and put a large figure in for that as well.
This produces typically the “need” for a 6-10% increase in Council Tax for a so-called “standstill” budget. If Councillors accept this work of fiction, they are on the hook for a bruising and ultimately unsuccessful budget process. If Councillors counter by saying they want to do something new in one or two areas, that is extra making the Council Tax increase even higher. If they request a reduction in the proposed tax increase – and they usually do – officers then come forward with “cuts”. These are usually carefully chosen to cause maximum political pain. They typically propose surrogate tax increases – higher car parking charges, planning fees, congestion charges and the like, and insensitive reductions in service, often aimed at the most vulnerable.
In the bargaining that follows the worst of the “cuts” are avoided, the fat in the budget is left untouched and neither side are happy with the result. Opposition Councillors have a field day if the process is public or news leaks out, as they can condemn the incumbents for daring to look at the uninviting list of cuts and charges the officers have dreamt up to try to keep the budget high.
So what should Councillors do? They should do what they do with their own family and business budgets. In tight years all items of spending are under review. The aim is to cut out the least desirable items, not the most sensitive, and to deliver the same or more for less by spending more wisely. To do this the first round of budget papers should n ot present existing spending as a given, but should question why the Council is doing its more marginal things., and question how it can do everything needed more effectively. Councillors should ask amongst other things
1. How much is the budget for Consultants? Why can’t this work b e done in house by existing officers? Why are we often paying twice for the same thing?
2. How much is the Council spending on energy? Would spending on insulation, heating controls and better management of buildings use slash this budget in year? Can the energy contracts be renegotiated on more favourable terms?
3. How much is the Council spending on transport? Can the contracts be better managed? Can more transport be grouped to minimise journeys and maximise use?
4. What is the budget for “fact finding travel” and conferences? Is all this necessary?
5. What is the budget for PR? Why can’t Councillors do more of their own communication, without relying on officers who have to be careful not to be political in their messages with Council money?
6. How many surplus assets does the Council have? Can some of these be sold to cut debt?
7. How good is the Council’s cash management? Can they earn a better return on balances without putting it in an Icelandic bank?
8. How many layers of management does the Council have? Why can’t this be slimmed down through natural wastage?
9. Wouldn’t a staff freeze generally be a good idea to make manning more efficient? Couldn’t the Council cut the number of committees which need servicing, and concentrate on the big issues that matter.
10. Why is the Chief Executive’s office so large and expensive. Doesn’t economy begin at the top?
Councillors are part time, and face clever officers often determined to expand their empires. Leaders need to tell officers many of the present budget papers are not fit for purpose. They need to introduce commonsense budgets, as many of them run elsewhere.