The famous old allegory of robbing Peter to pay Paul is one that will be in the minds of many council finance officers this month as they announce their annual budgets amidst the grip of government austerity.
Many of these hard pressed accountants have been faced with little choice other than to increase costs or borrow to fill the gap left by cuts in government funding.
But clearly some councils are more adept at the art than others.
Stevenage Borough Council is facing the same tortuous financial tightrope challenge as most other local authority’s in the UK.
The seriousness of these challenges became all to real last month with the announcement that Northamptonshire County Council had slid to the verge of bankruptcy.
Yet SBC remains determined – and in fact is legally bound – to balance its budget.
So how may you ask can this be done?
It’s a tricky task which the council’s assistant finance director Clare Fletcher says can only be achieved by meticulous planning.
Like most councils, the Labour-controlled authority has faced a 74-per-cent cut in its government grant between 2011/12 and 2018/19. By 2019/20 this will have reached 80 per cent – a total loss of some £5 million of its circa £9m annual budget.
This couples with the estimated £4.8m impact of inflation on the council’s general fund budget in the same period which basically doubles the impact of the cuts.
Like most councils, to compensate, it has had little choice but to put up its share of the council tax bill again this year by the maximum allowed amount of 2.99 per cent this year.
This means for a band D property, the share of the council tax paid to SBC will be £204.46 per year.
Residents are never happy with these increases, but as council leader Sharon Taylor points out, it’s still exceptionally good value for money for the 120 or so services the council provides.
Business rate are another possible compensation for the cuts.
The current government has made promises that reductions in its funding will be compensated by the amount councils can get back in business rates.
If SBC could get its hands on the 40 per cent it is originally allocated, it would be in line for a nice £17m payout this year.
But instead it gets just shy of £3m this year, because of the complex series of tariffs and deductions the government applies. Understandably Mrs Taylor says the council feels pretty short changed by this.
It even tried to sign up for a pilot scheme that would have allowed it to spend more business rates on specific projects but was turned down by the government due to the sheer number of applications.
So the council is left with he tricky task of cutting costs which it has to try to do without cutting the quality of services.
In the coming year this will include £85,000 in efficiency savings and £205,729 saved in procurement.
In fact the council estimates it has found some £13.2 million in savings since 2007/8 and will find another £1.25m by 2022.
Inevitably there will be some casualties. The council will need to make five staff redundant in order to balance its books.
It will also have to increase charges for some of its services to the tune of £134,160 this year.
This includes on-street parking with increases ranging from six per cent to 29 per cent, a four per cent increase in garage rents and a five per cent increase in bulky waste collections.
There will be a hike in charges for making planning applications from between 20 per cent to 40 per cent.
But these increases are always as unpopular as a hike in council tax, and the other side of the coin is the council clearly feels it cannot push up charges as much as it would like.
Its increases this year in fact fall £162,434 short of its target.
There are however other options.
Another way councils can bring in cash is to get private developers and investors to back building projects and development schemes.
The council has just scored a major success in this area, signing up developers Mace to fund its £350m town centre regeneration scheme.
One thing to avoid when seeking to escape the fate of Northamptonshire County Council is to try to avoid spending up your reserves.
SBC has so far done pretty well in this respect where Northants so obviously failed.
In the last financial year it was forced to use some £754,000 from reserves of £2.5m.
It anticipates using another £720,000 in the coming year, leaving a balance of £1,785,000 by March next year. – not much room for manoeuvre in anyone’s book, but still there for a rainy day, of which there are likely to be many in the years ahead.
And despite the pressures, SBC is also still being assiduous in the way it spends in relation to people’s priorities.
Mrs Taylor tells me that a recent survey of residents threw up the town centre regeneration, housing, and community safety as key issues.
As already mentioned the council has just secured £350 million for the town centre provided by private developers. It is also splashing out on a series of other housing developments like those at the Twin Foxes, March Hare and Archer Road sites. This is all part of a billion pound housing investment over the next 30 years.
Finally in areas like community safety it is focusing on projects like its Stevenage Against Domestic Abuse forum which has won national recognition.
It also plans to use the £1.9m it expects to get from the government’s New Homes Bonus Scheme for 2018 on community projects like an expanded cycling festival this summer, a revamped Stevenage Day/Rock in the Park event and a series of events to raise the profile of the town centre.
In the interests of getting people involved in local democracy, there will be £40,000 pilot fund for some of the Stevenage neighbourhoods to decide how to spend in their own way.
This year’s budget was approved unanimously at a council meeting on February 29.
Conservative and Liberal Democrat councillors raised limited opposition.
Mrs Taylor concluded the budget meeting by saying: “Here at Stevenage Borough Council, we will continue to work together for the people in our town, even as we face continuing adversity and resources are disappearing in front of our eyes. This budget gives us the capacity to carry on delivering excellent services over another year.”
It’s very easy to criticise councils for their spending – or lack thereof, but it is absolutely clear that Stevenage is setting an example of how to balance the books in the tough times of austerity.
Just how long it can keep up this juggling act will depend on whether there are changes in government policy, how much it can commercialise its services and bring in private backers and how tolerant people are to paying more for what they get.
It’s certainly not an enviable task.
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