There is no doubt that Government funding cuts have hit councils hard, writes Ipswich Borough Labour Leader, David Ellesmere.
Ipswich Borough Council’s core government funding has been cut by £8m a year since 2010. We are facing £12m more cuts over the next four years.
To put this in perspective, a 1% increase in Ipswich Borough’s council tax raises an extra £130,000. Council tax would have to rise by 60% to make up for the cuts in Government funding.
That would not be acceptable, so we’ve had to look at other options.
We have made significant efficiency savings, for example by reducing the number of senior managers, without affecting services but cutting costs can only take you so far.
An alternative is using property transactions to either cut costs or increase income.
We bought the Council’s Grafton House headquarters which we were previously renting. Because of low interest rates, the cost of borrowing to buy the building was around £300,000 a year less than the rent we had been paying.
Over the last year we have purchased five commercial properties around Ipswich. For all these purchases, the cost of borrowing is a lot less than the rents received. Next year we anticipate additional net income of £1.8m from these purchases.
This is why we are able to say with some confidence that we will not have to cut any of our services next year.
It is why we are able to keep brown bin collections free of charge to Ipswich residents when all other councils in Suffolk are charging up to £50.
It is why we are able to provide an out of hours noise nuisance service – the only one in Suffolk.
It is why we are able to step in and save threatened bus services when Suffolk County Council, the transport authority, refuses to do so.
It is why we are able to put significantly more money into preventing homelessness, including the purchase of an additional homeless families unit.
Investing in commercial property is not a panacea. We still have to make savings. But without it we would be looking at major cuts in council services, and I don’t believe that is what anyone in Ipswich wants.