Last updated 13 March 2019
Council Tax statement from Alex Ganotis, Leader of Stockport Council
Uncertainty still prevails over the Government’s course on Brexit and there appears little sign of a reversal in funding pressures which disproportionately affect Local Government.
The former affects the risk environment in which we make our investment decisions; the latter affects the urgency with which we must generate revenue and reform services. These issues are likely to amplify over the financial year.
For 2019/20 we have had to face a budget saving requirement of £16m identified in February 2018, reflecting the increasing costs of providing services and the waning Government support we receive. This is in addition to £100 million of budgetary gaps addressed since 2010. A further £33million of savings are forecast to be faced by the Council by 2022/23.
This comes at a time where demands upon Councils are rising, particularly in our largest expenditure area, Adult Social Care and also Children’s Social Care. Through the Local Government Association, we have repeatedly petitioned Government for a sustainable funding solution on Adult and Children’s Social Care. We are yet to see this, but will keep making the argument.
Instead, Government has provided a succession of one-off funding so councils can partly relieve immediate cost pressures. This year, we are permitted to raise Council Tax by an additional percent for the Adult Social Care Precept, meaning with the Adult Social Care Precept, councils can raise their Council Tax without a referendum by 3.99%.
I am pleased to say Stockport will not be asking this of residents. This is not because pressures have eased, but because of the prudent approach we have taken to balancing the books. However, we cannot balance our budget without raising Council Tax, as this would result in wholesale cuts to services upon which residents rely. Our approach is to seek an appropriate balance between the two. In doing so, we are increasing Council Tax by 2.75% (1.75% general precept, 1% Adult Social Care precept).
I am often asked; if Councils are so strapped for cash and more tax is needed, how come we see so much money being spent on regeneration? The answer is we are doing so precisely because we have less money and facing rising demands. There are two broad ways we, or any Council, can approach this. One is with large expenditure cuts; the other is investing to generate savings and income.
The first inevitably means wholesale cuts to frontline services. We would not want to and nor can we (for ethical and legal reasons) simply curtail services relied upon by some of society’s most vulnerable. Putting these considerations aside, we also must be mindful that some cuts, while making short term savings, produce long-term costs.
Cutting children’s services now could affect lives for years to come, creating many potential additional costs for the Council and avoidable social problems. This is one example where making a false economy now can cost the Council, and therefore the taxpayer, mounting and recurrent sums later.
Our approach has been a growth and reform strategy; investing either in projects which generate income for the Council – such as regenerating economies (raising more business tax, producing more jobs), or in making changes to the way we provide services while attempting to minimise the impact on residents.
And, Council regeneration activities constitute capital spending, meaning expenditure which does not come at the cost of the provision of day-to-day council services, but which generates returns to cover the initial outlay.
The 2.75% rise in Council Tax and changes to the Council Tax taxbase generate £6.1m towards meeting the savings requirement in 2019/20. We believe that the 2019/20 budget is a progressive budget; we have listened to the views of residents as part of our consultations whilst seeking a balance between protecting services where possible and the amount of tax we seek from residents.
We are clear that continued increases in Council Tax of this level is not a sustainable way to address increasing budgetary pressures, not least because it asks residents to shoulder an ever increasing share of council funding through a system which does not reflect ability to pay. So while we will keep making the difficult decisions needed to invest in our future, we will also keep making the argument for fair and sustainable funding from Central Government.
We must also be clear that what we are asking of residents comes as part of a clear and coherent plan for Stockport, which will place the Council and the Borough on a sustainable financial footing for the future. For further details of this, see our Council Plan
Councillor Alex Ganotis, Leader of Stockport Council