COUNCIL tax in Warrington is to rise by 3.98pc after cuts and savings of £14.1m with a need to find another £43.1m cuts in the next four years to the near £140m budget.
With the Labour controlled council approving the annual budget and council tax rise, deputy leader Cllr Cathy Mitchell defended Warrington Borough Council’s various investments, which she says add £20m per year to the revenue budget.
“So that is £20m’s worth of public services we don’t have to cut each year, meaning that we can continue to provide vital services.”
Opposition Lib-Dem Cllrs opposed the budget, although supporting the 1.98% rise and the 2% increase in the Adult Social Care precept, but voted against it as a whole due to concerns about the lack of transparency and lack of consultation.
Meanwhile the Labour-run authority has vowed to ‘work closely’ with staff and the trade unions to reduce the need for compulsory redundancies.
Cllr Mitchell, Finance Portfolio Holder, told the council: “I want to start by talking about our values, the values at the heart of this administration. In light of recent events, I also mention the tone of political debate.
“Other parties are our political opponents, not our enemies. We have different values. For us in the Labour Party we realise the importance of quality public services, at the same time as having true ambition for this town.
“For the last decade, the council budget has been savaged by cuts from this Tory government. This is a nationwide problem, not confined to Warrington. The obvious choice to make would be to shrink the services we provide to fit our shrinking budget. We would have been criticised but could have simply pointed at the cuts in our funding and place the blame on the Tory government, which would actually be totally fair. We would have set ourselves on a course of ever decreasing circles. Always follow the money – politicians will show you their priorities by where they spend money. Local government, policing and NHS are not priorities for any Tory government, whatever warm words you hear.
“The reality was this. We could not turn our backs on the people of Warrington who need our services. Hacking away at services until there is nothing left does not serve the people who need help washing and dressing and preparing meals or the children in need of our protection. Those in Government who criticise Councils getting involved with commercial investments should fund councils properly in the first place, so it would not be necessary.
“Nor could we forget the ambitions of our town – we have consistently punched above our weight. As one of the strongest economies in NW, we have succeeded in attracting huge inward investment in terms of projects, business and infrastructure. We have great partnerships in business, sport, leisure and culture.”
Cllr Mitchell outlined a number of achievemnts made by the council during difficult times including a Children’s Services were rated “Good” by Ofsted last Summer, “‘built on a bedrock of good practice standards and improved outcomes for children, a Children’s Homes has recently been rated “outstanding” by Ofsted. Our Schools are rated the best in the North West and pupil achievement is well above the national average, calling a climate emergency meaning later this year they are likely to be the first council using 100% green electricity from its own solar farm and retaining 12 libraries, which according to a recent independent Local Government review offer a “great service” and delivery and successful opening of Time Square, transforming the town centre and boosting its economy. Providing a catalyst for the demand for residential development in the town centre.
Cllr Mitchell added: “As an administration, we could not be prouder of our wonderful staff at the council, who have worked to the highest standards, despite deeper and deeper cuts to resources and reductions in their numbers.
“People see some of the obvious services that councils provide, such as emptying bins, cutting grass, clearing litter and mending roads. But councils provide over 800 services, some of which you don’t tend to see.
“This budget proposes cuts of £14.1m in the next financial year. We plan to use income from our investments to generate £7m of that shortfall. We need to find £43.1m cuts over the next 4 years.
“Because of government cuts we don’t have enough money to provide services. Council tax usually goes up annually, but if you wanted to use council tax to bridge the gap in funding it would have to increase by 40%.”
Cllr.Mitchell said Warrington had the 5th lowest in the North West with the second lowest settlement funding in the North West.
“As a council we are very poorly funded and have been for a number of years. That is why our achievements are all the more remarkable.
“We presently receive one third of the business rates generated in Warrington. There have been proposals from Government around for a long time, which could mean that we could keep more of our business rates – we are still waiting. No urgency by Government to sort out this crisis in local government funding. They just don’t see it as a priority.
“This has been a difficult budget to put together. Officers have worked flat out on this and I thank them for that. They have tried incredibly hard to find savings, but clearly that gets ever more difficult each year.
“Trying to put the budget together has been even more of a challenge because we have had to wait until 6th February to have confirmed by Government what the settlement will be. This is still subject to approval by Parliament. We are only being given short term information on our funding by government, making it extremely difficult to plan ahead.
“In the forthcoming financial year there is a target for further investment income of £7m, which will prevent £7m worth of cuts to services. Putting that another way, our investments will enable us to maintain £7m of services which would otherwise be lost to the people of Warrington.
“It’s important to say that not all property/businesses are bought to make money. Some are bought as part of a regeneration project and some for a specific purpose. For example, we bought a share of the Bank to enable small/medium businesses to borrow money. We see them as an important part of our local economy. They previously had to use a credit card or remortgage their own home. The bank is doing very well in performing to its agreed Business Plan, and is expected to generate income in due course.
She added: “The council can borrow money very cheaply – but you can’t use borrowed money to add to the revenue budget – it’s illegal. You are allowed to use borrowed money to buy property, or businesses. This type of money is called capital.
“We invest in buildings and businesses, a bit like a buy to let. If someone borrows money to buy a house and then lets it out, they will receive a rental income. To make it worth their while they would have to get enough rent to cover all of their borrowing costs and all of the costs of looking after the asset.
“The money left over is revenue and can be spent on services for the people of Warrington.
Cllr Mitchell added: “Due diligence is critical. Most offers of investment received are not proceeded with. The Council routinely use external advisers and experts and do thorough risk assessments. The whole investment portfolio is constantly reviewed to ensure that our investments are continuing to perform for us. They presently add £20m per year to the revenue budget, so that is £20m’s worth of public services we don’t have to cut each year, meaning that we can continue to provide vital services.
“There will also be a saving in terms of the council’s electricity requirement by buying the two solar farms in York and Hull. The energy company we have invested in will also provide a source of income and will provide an outlet for the green electricity from the second solar farm. Through that company we are able to look at tackling fuel poverty, through actions such a lower tariffs in areas where fuel poverty is an issue and taking out prepayment meters and replacing them with smart ones.
“The council will also start building houses again and that will provide an income.
“So that is a lot of information and few would dispute that local government finance is complex.
“But what we are trying to do is simple.
“We are a Labour Council maintaining the last line of defence in between an onslaught of Tory cuts and the people of Warrington.
“We are using innovation, thinking outside the box, doing everything in our power keep providing essential services for people who need and value them.
“More than that we still have a real vision, a genuine ambition for our town. We want Warrington to be a place where each of us is valued and everyone has opportunities; where we work together to make the best of everything we’ve got; where we can progress; where we are safe and where we are not afraid to use our imagination and to be creative about how to make things better. That is what drives us and that is what we are all about.
In response Lib Dem spokesman Cllr Ian Marks said: “Unlike some other Labour Councils, such as Stevenage, this administration does not seek to involve opposition group councillors to help achieve a consensual budget in difficult times. We find this regrettable.
“Consultation has been late this year and what has taken place, has not been proper consultation with the opportunity to change anything – just briefings
“The national economic scene remains confused and the economy flat lined from October to December. In last year’s speech I said that according to the then Prime Minister austerity was over. Definitely not true in 2019
“I believe we were right to restore some balance to our economy when in coalition government. You always criticise us for this, conveniently forgetting that the coalition only delivered the cutbacks promised by Alastair Darling and the 2010 Labour Manifesto. But where we do agree with Labour, is that austerity went on far too long and was much too deep. The new Prime Minister has a different view and is willing to spend on anything.”
Commenting on issues facing Warrington he added: “Eleven months ago, there was a Corporate Peer Review by the LGA
“A few salient points included – In recent years the Council has consistently overspent against the budget, often having to make up shortfalls through a combination of further additional income, financial changes and the use of reserves”
“In recent years the Council has taken a number of decisions which have provided one-off savings with spending pressures then returning in future years.
“Redesign the budget process so that it is suitably informed by a full consultation with relevant stakeholders on spending proposals and these responses must be clearly evident when reporting to members.
“Given the rapid growth and complexity of the Council’s commercial activity, a dedicated external review of governance, monitoring, reporting, capacity, capability, process and risk is necessary to give members and officers suitable ongoing assurance.
“A significant part of the Council’s response to this reduction in public spending and increased demand for public services has been to try to put off some of the decisions that other councils have been forced to take through the use of an ambitious investment strategy.
“The Council can no longer afford slippages in delivery of planned savings and efficiencies’
“The Council has not yet made some of the budget savings that other local authorities have had to.
“When are you going to tell us that these recommendations have been taken on board?”
Regarding Commercialisation Cllr. Marks also pointed out a recent report by the National Audit Office sounded an alarm bell about billions of pounds being spent by Local Authorities on commercial property.
“There has been a fourteen-fold increase in the last three years over the previous three.”
Commenting on the council’s accounts and the investment in Redwood Bank he added: “I don’t claim to understand the issues surrounding the failure of our Auditors to sign off the accounts for the last two years
“But I do know that in a few weeks another year will have finished.
“I have asked Grant Thornton at the last two ACG Committees but am none the wiser about the timing of the signing-off. I am told there are no sanctions against the Council but the delay has to be bad for Warrington Council’s reputation and Grant Thornton’s too. I am aware that one of the objectors has sent in FoI requests to the Council but has not received replies that satisfy him. I am also aware of the request for a formal valuation of the Redwood investment. Please can you let us know the Council’s view of these two requests?
He added: “We get the reason for the Council making investments. We are much more comfortable about investments within the town, or solar farms, than we are with retail investments like Tesco in Bolton and Widnes and Asda in Manchester.
“I realise the financial returns on retail sites are much quicker than the returns on say a solar farm. However, I am not sure what the future of retail stores is and whether the sites will hold their value.
“We are not convinced that the level of risk that is being taken on, is justified by the very small net returns.
“We have raised questions about Together Energy. We know there have been problems at Portsmouth Council with its energy company and with Robin Hood Energy at Nottingham with delayed accounts.
“Whenever we ask about our company we are always assured it’s different and they are opening an office here. We remain to be convinced this investment is so secure.
“We also need reassurance that the Council will make very public efforts to improve Together Energy’s trust ratings.
“These will adversely affect its ability to attract new customers, which is an essential part of the strategy.”
“While supporting the 1.98% rise and the 2% increase in the Adult Social Care precept we will be voting against the budget as a whole because we are concerned about the lack of transparency and lack of consultation.”
Lib Dems proposed the following amendment: “For the 2021/22 Budget, this Council undertakes to consult earlier in the budget setting process, involve all members not just the Cabinet in challenges to the Directorates, be clearer about the desired outcomes from the Outcome Based Budgeting process and produce key performance indicators on whether the outcomes are being achieved.”
But the Labour controlled council voted to approve the budget.