Let's talk About: Money

  Posted: 25.04.21 at 10:22 by Alastair McCraw

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When it comes to getting anything done in Local Government it always comes back to funding. Not just the money you have now, but the money you expect to have in future years. For the moment, let’s look at the Suffolk County Council budget passed in February 2021.

I’m afraid this will involve some figures, but please bear with me. This stuff doesn’t get broken down often enough in my view. All said and done, it is your money behind it. People often treat this subject as the exclusive preserve of Conservatives, but every councillor has a responsibility to have at least a passing understanding of it. In some ways, we do this, so you don’t have to.

We must look after the money, understand the money side, and think about future needs because the money is what pays for services. And if we don’t provide proper services, what else is a council for?

Broadly, SCC has a £600 million expenditure budget for 2021-22. That’s not the huge amount many may think. We’re a rural county without the concentrated population and needs of a metropolitan area or county. National government talks in billions and we don’t even reach a single billion. But it’s what we have, now. Where does it come from?

The biggest part, about £351M, is what is known as the Total Precept. You call it Council Tax. It’s about three quarters of your total Council Tax, the rest going to Police Commissioner (13%), District (Babergh 10%), and Parish (2%). The Suffolk share is split into a General Precept (£315M) and the Social Care Precept (£37M). That last bit has recently been allowed to rise by 2% each year to take account of a growing demand that needs addressing nationally… and very soon. So, you’re funding 58-59% of this budget directly.

The other £247M gets a little complicated. £113M comes from Suffolk’s share of Business Rates in the county. Then there are a series of central government grants that, of course, are ALSO your money from direct and indirect taxation. They’re given for such things as Public Health (£30M), Improved Better Care (£28M), Social Care (£23M), Revenue Support (£17M), Rural Services (£2.28M), and New Homes Bonus (£1.1M). This year a Covid-19 Support Grant of nearly £15M has been given as well. That all totals up to around £117M.

The central government support given to local authorities used to be higher. The Department for Local Government, currently known as Ministry of Housing, Communities and Local Government (MHCLG) from 2010 until the Covid-19 pandemic had been steadily cutting grants to Councils. That means you’ve been paying a higher proportion of the total directly for some years now. It is estimated that an average council saw a loss of income of over 40% during this period.

This may help to explain some things many of you have been saying to me over the last several years about roads, potholes, flooding, social care, school buses, and a host of other things that have had direct impacts on individuals watching their own budgets rising. Actions have these consequences. I leave it to you to judge whose actions, but I’m pretty sure you can join the dots here. It’s the same party in both governments and cabinets.

We’re nearly finished with the income side. You will have spotted that there’s still a gap in this budget. This extraordinary year has seen SCC’s reserves about to be dipped into. They were previously held to be untouchable, not to be used to… say fund schools transport, or much else. This year however £18M of Council Tax, Transformation and Covid-19 reserves will have to be used. To make things a little worse, of course, a collection shortage of £1.7M is expected and must be accounted for. Those reserves can only be used once though and Budget gaps of £32.6M, £50.2M and a whopping £75.8M are forecast for the following three years. Much more Government support is going to be needed as the Budget report makes plain. As things stand, SCC risks being insolvent after 2023-24, during the very period for which you are electing councillors on May 6th.

There’s more to write about on this subject, particularly regarding the spending of these sums, about the climate change emergency and paying those costs, about the allocation of resources and where to find value for money.

You’ve suffered enough already. I will return to this before the election. I’ll just add that I have rounded some figures, thought about using pie charts and so on, but I didn’t want to, kind of, send you back to school. If you’re worried, don’t be. You have the power to choose. I’ll point out that there is a balance to be found, to preserve (and even enhance) services while taking care of the finances. The first step is in understanding the task at all levels and analysing it rather than making knee jerk responses that only waste money and resources. It’s what we should be doing across the county and country.

Alastair McCraw is standing as an Independent in the Suffolk County Council elections on May 6. As an Independent he promotes himself and his funding is self-financed. He does have a

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