We all remember the drastic budget cuts announced by the Isle of Wight council back in February and are starting to see the impact of them on vulnerable people on the Island.
Since then, the new Conservative-Lib Dem coalition Government has announced their own set of dramatic cuts to public spending, which will have serious knock-on effects for local councils.
The Isle of Wight will not be immune to these cuts, indeed, they will exacerbate an already-dire situation.
Cabinet to consider further cuts
In a paper to be presented to the Cabinet next week, Leader of the council, David Pugh states “… it is absolutely clear that our resources will be severely reduced over the next few years and we need to be planning and implementing strategies now to accommodate such a reduction.”
However, even given those budget cuts announced earlier in the year by the IW council (as highlighted above) he goes on to say, “It is clear however that this will not be enough and therefore a radical change to what the council delivers and how it delivers it is required.”
How will this affect us all?
What is clear, is that the council are telling us that more major cuts will need to be made to ensure they minimise the risk of increasing their budget deficits.
Highlighted in the report are key elements from the Government’s emergency budget that will impact the Isle of Wight Council:
- A two year pay freeze, with a flat rate increase of £250 for employees earning less than £21,000 in 2011/12 and 2012/13. The local impact of this limited increase will be some £270k each year, excluding schools;
- The change to the National Insurance contribution threshold will reduce the additional cost to the Isle of Wight Council of the 1% increase on 1 April 2011 from £534k to £350k;
- Reviews of pay levels and pensions;
- Prudential borrowing to be monitored;
- Council tax freeze if budget set at government target (assumed 2.5% or 2.9% compensates for loss of income);
- Land fill tax continues at +£8 per tonne increase each year as previously set;
- Regional growth fund;
- No further cuts in capital projects but all to be reviewed;
- VAT increase from 17.5% to 20% effective from 4 January 2011. This will have a limited impact on local authorities.
Opposition response
In response to the Cabinet paper, Labour Councillor Geoff Lumley said, “As the only political councillor at County Hall currently openly opposing this coalition government I am appalled to imagine what is likely to happen locally over the next 5 years of cutting public services. I believe many Islanders will feel the same and I am hopeful that many will come together in the weeks and months ahead to campaign locally and nationally against these cuts.”
