Next year’s budget at Wokingham Borough Council is not going to be an easy one for Councillors to make. As we sit on the edge of a major deterioration in the public finances, it might help if I set out the background to their decisions.
Over the last five years times have been good for public spending. There have been large increases in most areas, but unfortunately the national government has not always chosen its priorities well, nor has it achieved the results you would expect given all the money spent.
Over the last five years Wokingham Council and the MPs representing the area in Parliament have made the case for more generous grant financing of Wokingham’s activities from national taxation. We have been successful in this. From a low base government grant has gone up by 23.6% in five years, or by 12.5% more than inflation. Over the same period prices have risen by 11.1% and Council Tax by 19%. Since the introduction of the schools grant to pay for education in 2007-8, that has gone up by 8.5% compared to 6.6% inflation.
In 2009-109, the present year, government grants and recycled business rates will pay for 62% of Council current spending. I am leaving out housing which is paid for separately, mainly from rents. Government grants are also paying for 87.5% of the capital spending this year on school renewal, roads and the like.
This year the Council is spending £201 million on running its general services and education. It is spending £30 million on school buildings, bridge repairs and highways work, on capital account. All these figures are taken from Wokingham’s Medium term Financial Plan on the Council’s website. Total spending may be around £100 million more when housing and other spending paid for by fees and charges is taken into account, but the gross figures are not published in an easily accessible form.
The Council has been prudent, putting money aside for rainy days. It now has £22m of general,specific and ring fenced reserves. It also has £72 million of longer term borrowings, which paid for previous building works.
The government is planning reductions in spending in many areas from next year onwards. It knows it cannot go on spending on the scale it is at present, as so much of the money is borrowed. My worry is that they will want to hit local government as one of the easier targets. They could also revisit the grant settlement and make it less favourable to Wokingham, after the advances of recent years.
We will continue to support fair funding in Parliament. It is necessary, however, for all in the public sector, including MPs, to be planning how to do more or the same with less. This is not a good time for people with pet ideas and new schemes to seek public funding,. It is a time to look after the crucial core services, like schools and care for the elderly, and then see what is left over for anything else. It is a time when all organisations have to cut their overheads and expenses.