This is a rich year for budgets on the Isle of Wight.
Not only have we heard of the proposed cuts from the ruling Conservative party, a proposed alternative budget from the alliance between Labour and the Independence, but now a proposed amendment from the Liberal Democrats.
The summary of the proposals take the shape of what they describe as “the five strands to the recovery plan” and are as follows (in their words) …
- Moving the sustainability agenda on from gimmicks and fine words to real action
- Identified, quantified and deliverable efficiency savings
- Focusing on delivery, not propaganda
- Financial prudence
- Protecting our services from permanent damage
The details
| £ | |||
| Conservative Draft budget | 132,464,000 | Notes | |
| Liberal Democrat amendment: | |||
| ECOLOGY | |||
| Abolish resident’s parking permit | -1,000,000 | 4a | |
| Error in peak period concessionary fares savings | 267,000 | 4b | |
| Cost of retaining peak period subsidy | 13,000 | 4c | |
| Performance related pay for cabinet members | -13,000 | 4d | |
| Non-school energy conservation (10%:5%) | -190,000 | 4e | |
| EFFICIENCY | |||
| Remove ENO layer of management | -450,000 | 4f | |
| Return senior management structure to 2005 levels | -750,000 | 4g | |
| Internal communication/performance by service managers | -295,000 | 4h | |
| DEEDS NOT WORDS | |||
| Abolish propaganda budget | -350,000 | 4i | |
| FINANCIAL PRUDENCE | |||
| Restrict prudential borrowing to self financing schemes | -350,000 | 4j | |
| Additional savings in full year | 2,235,000 | 4k | |
| PROTECTING SERVICES | |||
| Learning disability day centres | 250,000 | ) | |
| Carers advocacy | 13,000 | ) | |
| Saturday respite service | 11,000 | ) | |
| Haylands Farm | 21,000 | ) 4l | |
| Riverside Centre | 86,000 | ) | |
| Osel | 112,000 | ) | |
| Homelessness and temporary accommodation | 30,000 | ) | |
| Supporting people/client numbers | 1,850,000 | 4m | |
| Trade Union support | 50,000 | 4n | |
| NET EXPENDITURE | 131,769,000 | ||
| Formula Grant | 61,396,600 | ||
| Council Tax demand | 70,372,400 | ||
| Collection Fund deficit | 87,000 | ||
| Tax base | 55,167 | ||
| BAND D TAX | 1,277 | ||
| INCREASE | 0 | 4o |
Summary of proposals
The Lib Dems propose a council tax increase of only 1.5%, reduce revenue expenditure be reduced by £695,000 to £131,769,000 (detailed in their section 4) and reduce capital expenditure by £14,293,000, as set out in their section 4j below.
Lib Dem Financial analysis and rationale
| 2010/11 | Full year | |
| 4a) Abolish resident car parking permit | 1,000,000 | 1,500,000 |
| The resident car parking permit has been extremely popular with the minority of Islanders who have one. It was considered by the last non-Tory council but rejected for a number of reasons: | ||
| · It would entail an annual subsidy of £20-£40 from each taxpayer, motorist or not | ||
| · It would clog up the Island’s car parks, to the detriment of high street commerce and to the benefit of out of town shopping | ||
| · It goes completely against Government policy on traffic management and any attempt to reduce unnecessary car use. | ||
| The Administration’s costings for it’s proposed price hikes are unrealistic, and the likelihood of consumer resistance being as little as 5% following a price increase, for example, of 300% for the over 60’s is unrealistic. In reality, the permit is being withdrawn by stealth. | ||
| The costings here allow for retention of the commuter’s permit at the Administration’s proposed price, with the option of monthly payment by direct debit at no additional cost. | ||
| 2010/11 | Full year | |
| 4b) Error in peak period concessionary fares savings | 267,000 | 267,000 |
| The draft budget costings ignore the possibility and likely outcome of an appeal by the bus company, which would negate most of the planned savings. This item corrects that error. | ||
| 2010/11 | Full year | |
| 4c) Retain existing 24/7 concessionary fare scheme | 13,000 | 13,000 |
| This is a minimal cost for avoiding several thousand additional car journeys at peak congestion periods, and at the same time helping the less well off over-60s to get to work. | ||
| 2010/11 | Full year | |
| 4d) Performance related pay for cabinet members | -13,000 | -13,000 |
| One of the 2005 Conservative manifesto commitments was performance linked allowances for Cabinet members. This seems an appropriate time to introduce it, as the reduction would very usefully fund the retention of 24/7 concessionary fares (see 4c above) | ||
| 2010/11 | Full year | |
| 4e) Energy Conservation (non-schools) | -190,000 | -285,000 |
| When asked some time ago to quantify investment in energy conservation, and resultant savings, the nominally responsible Cabinet member was unable to give a response either at the time, or subsequently. With the UK’s international obligations to cut CO2, and an increase in energy prices, this seems an ideal point at which to introduce a modest 10% reduction in energy wastage, with a further 5% per annum thereafter. | ||
| 2010/11 | Full year | |
| 4f) Remove layer of management – Environment & Neighbourhood Officers | -450,000 | -600,000 |
| The role of ENOs introduces an extra layer of bureaucracy between the Council and its taxpayers. Properly trained and dedicated elected members and effective channels of communication between citizen and service are a cheaper and more effective solution. | ||
| 2010/11 | Full year | |
| 4g) Return Senior Management structure to 2005 levels | -750,000 | -1,120,000 |
| After allowing for national pay awards over the last 5 years and excluding staff involved in PFI and schools, where exceptional circumstances apply, the cost of the current senior management structure is at the very least £1,120,000 more per annum than it was in 2005. It is difficult to see how this is justified on a performance basis, and the District Auditor’s view that strategic direction is lacking is a telling one. Phasing in of the savings allows plenty of time for implementation, based on a similar project in 2002. | ||
| Although by definition none of these senior management posts are “front line”, the saving in central departments, where costs have risen in four years by 75%, will be greater than in service departments where the rise is (only) 48%. | ||
| 2010/11 | Full year | |
| 4h) Internal communication/performance transferred to service managers | -295,000 | -295,000 |
| In most organisations internal communication is, for very good reason, a prime responsibility of the management structure. The presence of a central function with responsibility for this does not seem to be working very well, or at all. Similarly, most aspects of performance management are a fundamental part of the manager’s role, which is not enhanced by a duplicating bureaucratic bolt-on. | ||
| 2010/11 | Full year | |
| 4i) Abolish propaganda budget | -350,000 | -350,000 |
| Instead of telling a sceptical world how wonderful the Administration is, this item redirects those resources to front line service delivery, which the local community should find even more impressive. | ||
| 2010/11 | Full year | |
| 4j) Prudential borrowing – self financing schemes only | 350,000 | 1,470,000 |
| This is a term misleadingly applied to any borrowing undertaken in the absence of Government support in the form of grant aid. In reality, because repayments fall wholly on the local taxpayer, it is only “prudential” if the authority concerned can afford it (which is clearly not the case here) or it generates a positive rate of return. This item removes £14,293,000 of capital spending which would otherwise represent a direct burden on the local taxpayer equivalent to an additional 2% on Council Tax. | ||
| 2010/11 | Full year | |
| 4k) Financial Recovery | – | 2,235,000 |
| Many of the proposals here have a larger effect in 2011-12 and beyond, which if not frittered away should give significant help in minimising both Council tax rises and service cuts for the foreseeable future. | ||
| 2010/11 | Full year | |
| 4l) Protecting services – adult services | 523,000 | 523,000 |
| These are fairly self explanatory reversals of proposed cuts, some of which will destroy important local facilities which have been built up over many years and currently lever in massive voluntary effort. We do not believe the explanations and assurances provided. | ||
| · Learning disability centres (£250k) | ||
| · Carers advocacy (£13k) | ||
| · Saturday respite service (£11k) | ||
| · Haylands Farm (£21k) | ||
| · Riverside Centre (86k) | ||
| · Osel (£112k) | ||
| · Homelessness and temporary accommodation (£30k) | ||
| 2010/11 | Full year | |
| 4m) Supporting People/Client Numbers | 1,850,000 | 1,850,000 |
| The current financial mess unfortunately does not allow a complete reversal of these appalling reductions in support for the vulnerable and elderly. This contingency is provided at a level of 50% of the proposed reduction, to be ring fenced and only released with agreement of full Council, in mitigation of the worst effects. | ||
| 2010/11 | Full year | |
| 4n) Trade Union support | 50,000 | 50,000 |
| Without a clear understanding of the positive role that Trade Unions can and do play in periods of major organisational upheaval, there is little chance of success. | ||
| 2010/11 | Full year | |
| Council Tax | 0 | |
| Many of the Island’s residents are on fixed or index linked benefits and pensions which, unlike the state pension, will not rise this year. Given the generous Formula Grant, low levels of inflation, and the proposals in this amendment, the Council should be aiming to be in the lower range of tax rises nationally. |
