Last week our Budget for Ipswich Borough Council was passed by a large majority, writes Labour Council Leader, David Ellesmere.
It’s the fifth budget since Labour took control of the council in 2011 and probably the most difficult one yet.
Our last budget assumed that – despite what George Osborne was saying about how well the economy was doing – we were still going to face cuts of £600,000 per year over the course of this parliament.
What we thought was a worst case scenario actually proved to be wildly over-optimistic. In 2017 we are going to be faced with cuts of around £2 million a year.
The main funding the Government gives to support councils is called Revenue Support Grant. In Ipswich, this year it was £3 million. By 2018 it will be nothing.
But the Government isn’t stopping there.
In 2019 the Revenue Support Grant “turns negative”. Instead of the Government supporting us, we will be supporting the Government. To the tune of over £1million a year.
This is unprecedented. For the first time Ipswich residents will be paying council tax, not to support local services, but to support national government finances.
£1million a year will be taken out of the local economy.
This presents us with a huge challenge if we are to continue to deliver our priorities of protecting services, bringing new jobs and growth to Ipswich and building new homes.
The Government has told all councils to increase council tax by 2% to cover their cut in funding. But for Ipswich Borough Council a 2% increase – around 9p a week extra for most households – raises £240,000. This barely covers 10% of the Government cuts.
Clearly we have to look at what else we need to do.
By encouraging new homes and businesses we will be able to bring in more income from council tax and business rates.
We have reviewed the council’s contingency budgets and stripped out unnecessary items.
And we have extended our existing savings programme in areas where we have already made good progress, specifically on property income and procurement savings.
This should enable us to protect services and ensure that funding for projects like the new Crown Multi-storey car park and Broomhill Pool is secure.
One thing that has made setting a balanced budget even more difficult is “cost shunting” from Suffolk County Council – where they cut their costs by increasing other people’s.
This year they are trying force all councils to introduce charging for brown bin collection.
Most of the other Conservative-run councils in Suffolk have given in and will start charging £35 - £50 a year.
Waveney District Council have starting charging from today.
Their residents have been warned that if they put garden waste in their black bins then they won’t be emptied.
This is a hugely inefficient way to operate.
Expensive new billing systems have to be put in place. Unless the existing brown bins are taken away from people who refuse to pay then the refuse collectors will have to laboriously check every brown bin out on the streets to see if it has been paid for.
As a result one Conservative-run council is having to pay around £150,000 to collect unwanted brown bins.
That’s why in Ipswich we have made the decision to keep brown bin collections free of charge.
Because it is a much more efficient way of working, paying for collections through your council tax only costs around £2.50 a year rather than £50 as a separate charge.