Further to the letter from Cllr Geoff Lumley earlier in the week in which he claimed the council was building a ‘war chest’ by making cuts now and building reserves, upon invitation, leader of the council, David Pugh has responded. In his own words. Ed
Cllr Lumley’s claim of a “war chest” is completely without foundation.
Over the past few years, the IW Council has been increasingly transparent about its preparation for the budget process and the delivery of savings throughout the financial year. This has included quarterly updates on the financial position, along with a mid-year review in September. This process has allowed all councillors to understand where the pressure points are and furthermore what the possible consequences are of not addressing them.
During 2010/11, the Council highlighted a number of areas which could be at risk of a significant overspend, particularly due to unforeseen demographic pressures. By highlighting these early on in the financial year, the Council was able to take proactive steps – including a number of strict financial controls – to ensure that the Council did not see an overspend in overall terms by the end of 2010/11. This early intervention not only addressed the overspend, it also meant that the outturn position led to an overall underspend.
The Conservative administration considers this to be an indication of sound, transparent and robust financial management, in order to ensure that the council finances remain in a healthy and sustainable state. This is in contrast to recklessness of uncontrolled spending which the Labour Party became famous for during their years in government. It is therefore little wonder that Cllr Lumley fails to acknowledge the significant achievement of the Conservative administration at County Hall in more than addressing the significant potential overspend they faced. Spending control is simply not a phrase in the Labour Party dictionary, as the structural deficit of this country shows.
Cllr Lumley has shown an increasing unwillingness to face up to the reality of the debt crisis which his own government created. His budget proposals for 2011/12 sought to put off the difficult decisions for another year – despite the fact that the spending reductions were carried forward each year. His plans to use reserves to kick the budget challenges into the long grass were the height of irresponsibility. His penchant for deferral was reflected in his proposal at last month’s Full Council to put off the development of possible budget options for a further few months. In contrast, we are beginning the work now, and in earnest, to ensure that we have fully worked up and viable proposals for consideration in the budget setting process in February 2012.
It is also misleading for Cllr Lumley to infer that an overspend or an underspend would have significantly affected the spending reductions we needed to make in 2011/12. Irrespective of whether we had an outturn position of an underspend or an overspend, we would still have been facing a budget gap of over £17m between the likely level of income and the projected level of expenditure if no changes were made.
We will continue to take all the necessary steps, at the necessary junctures, to ensure that the Isle of Wight Council faces up to its ongoing budget challenges – as we promised to do in our 2009 election manifesto.
This is at the same time as delivering a key element of our manifesto – a two year freeze in council tax, thanks to additional funding from the Coalition Government.