Canal27ways

Category: Finance

  • Gloomy Outlook for Council Finances

    Gloomy Outlook for Council Finances

    Fierce Winds Conspire, The Dark clouds Do Gather……

    There are times when, a good report with confirmation that you are doing everything that you should do, is the last thing you want to hear. The storm is coming still. 

    We’ve actually had two reports on the council’s sustainability, one following the other. Neither of the two reports provides a route to delivering council services at a level the public aspires to.

    The second of these, our Corporate Peer Challenge, from the Local Government Association is stark reading, but it does little beyond telling us that we’re right to be concerned.

    The earlier report from the Chartered Institute of Public Finance and Accountancy (CIPFA) is the one that’s providing the action plan that came to Accounts and Audit Committee this week.

    There’s a danger that the issues are seen as temporary problems of liquidity that the government could solve. There’s a sense that we’re a special case and it’s nothing the public should worry about; we just need Government to listen. I worry that we’re internalising problems that we won’t solve without the public owning both the problems and the solutions.

    The public has an expectation that our parks and streets should be maintained to a much better standard than the council even dreams about. They do understand that not enough is being spent on them. They therefore have an expectation that if council tax rises, they will see an improvement. The very fact that we’re unable to meet that expectation is proof that the system is broken.

    I think the latest pronouncements from Government on future local government spending suggests that any hope of special treatment for Trafford has now receded. We’re going to have to deal with this.

    How do we balance the cost of funding statutory provision in child and adult care with delivering our everyday environmental services? Can we corral those everyday services so that they are directly commissioned by communities and not subjected to competing pressures in social care? How does community wealth building thrive in the current environment?

    Ideally, we can work with the combined authority and Mayor Andy Burnham. However, the risk is that the Government’s targeting of funding puts us on a different trajectory to most of our Greater Manchester colleague councils. That risk only emphasises the fact that communities are the only allies still irrevocably facing the coming storm with us.

    We must not fall into myopic thinking that balancing the books will be the only test that the public places on us. More than anything they judge us on the state of their neighbourhood. If we can’t insulate spending on neighbourhoods within the council’s spend, I think we ought to be considering alternative models. It may be time for parish councils and/or area boards to come of age.

    Photo by Eg Civic Ferio from Pexels: https://www.pexels.com/photo/sea-under-a-storm-cloud-18608634/

  • Council’s Annual Budget Meeting

    Trafford’s annual budget meeting is traditionally the biggest set-piece event of the council year. It typically stages a buoyant ruling party, setting out delivery of its priorities, against the harping of a grieving opposition party. This year, however, felt decidedly different in mood.

    This was a difficult budget. Trafford has had to be granted a borrowing facility in order for its finance officer to sign the budget off as ‘robust’. We’ve also been allowed to increase council tax a little more than our neighbouring councils. Whilst that’s a tricky position, it does feel to me as though Trafford is being allowed to begin navigating a course back to sustainability after having been cut adrift by the previous government, whereby an already frugal council was denied the ability to steer clear of rocks.

    So, I think I’m probably somewhat more optimistic than the majority of councillors speaking in the budget debate on Monday evening.

    A good thing that has emerged from Trafford’s current financial plight is that there is more openness about how Trafford spends council tax payers’ money. We are still short of total clarity, but there’s been a definite positive shift. That transparency will be a prerequisite for pulling out of this. We have to take the public with us.

    I’d really like us to complain less about how Trafford is somehow singled out by central government for unfair settlements. If we say it’s unfair then we’ve got to design a formula that gives Trafford more compared to a more deprived borough like Knowsley, a borough regularly cited in council documents. The simple fact is that Governments of both the left and right expect comparatively affluent boroughs to use local residents for income. Whilst the design of council tax has internal flaws, even with reform, Trafford will still be left needing to levy its citizens. So, whatever the form of that local taxation, keeping it low will carry the same risks the next time a government sets limits on how much it can be increased. I don’t believe Local Government Finance reform is going to be our salvation. This issue will return again next year.

    Given the preponderance of adult social service demands in depleting the council’s finances, it was surprising only Liberal Democrat councillor Simon Lepori raised the delay in its reform as an issue. He made a good point. It was a shame his party chose, as it usually does, to pick a completely irrelevant diversionary proposal as its budget amendment. The opposition parties struggled. There was no alternative budget proposal and that Lib Dem amendment was effectively about independence for Timperley.

    Although the budget passed, the work to keep costs down will have to be a daily obsession for the council. Tom Ross gave the speech of the night and it’s clear he gets this. We need to maintain the transparency and that includes the stress that we’re still next to bottom of the council tax charts.

  • Council Tax and Cones

    Council Tax and Cones

    The fact of Trafford Council being one of only six councils in the country being allowed to increase the council tax we pay by more than the standard 4.99% ceiling set by government has been a shock to people. It’s understandable that residents have asked how Trafford has come to be a special case. I’ve had lots of emails and social media posts. Many of these messages point to cycleway cones on the A56 being the cause of the shortfall in the finances.

    I wanted to share below, the reply I am providing to these messages which I hope gives some explanation.

    Cycle Lanes

    I’ll deal briefly with the cycle lanes first.

    We have a problem. Manchester’s roads can’t cope with the increase in cars we’ve seen. We’re nowhere near seeing the peak of car ownership here. It’s increasing every year.

    Graph of private car ownership from 2012 to 2022 in Manchester showing a steady increase of 31%.

    Several European nations have tried a different model notably Holland, but also includes mayor led cities such as Paris, London and particularly Seville. Citizens are encouraged where they can to use the car less. They’ve managed to halt the spiral of road widening and new highways within the city. At the same time, it’s had a positive impact on the prosperity. They’re healthier and wealthier.

    So, I am quite happy to justify the ‘why’ this is being done. Why we’re encouraging walking, cycling and public transport.

    But the A56 cones?

    I’m not going to lie and say the cones on the A56 are so easily justified (at least south of Stretford)edit. They were introduced as a Covid emergency measure. If it hadn’t been for Covid, we’d have gone for a proper appraisal and a proper business case. The last Government made us stick with our Covid measures.

    I’d have preferred to come back to the A56 when we’d done a lot more town centre work and worked on crossings to get a quicker return in terms of walking and health. So, I struggle to justify the timing, but we’d inevitably have to implement cycling infrastructure on our main route into Manchester at some point.

    Ultimately, I don’t think anybody disagrees with the premise that there would be an increase in cycling if all roads were safe to ride.

    In terms of the budget, the lanes have been government funded, so they haven’t impacted on our current financial plight. They do ultimately come from the taxes that you and I pay so I don’t dismiss the criticism.

    2025 Council Tax

    I’m now going to move on to Trafford’s general budget. Trafford has always had a low council tax.

    Other than Wigan, (who for historical reasons have substantial reserves) we have the lowest in Greater Manchester and I’m pretty sure it’s with Wigan as the lowest of all the Metropolitan districts nationally. At the same time we depend on Council Tax more than most councils.

    It’s argued that we’re affluent, but that only matters if we use that affluence to increase our income and we’ve deliberately kept it low.

    Historically, since Council Tax was introduced in the early 90s, it hasn’t mattered which party was in control of Trafford, we’ve kept it low. I am fairly sure that this is the first time in those 30 years a Labour Council in Trafford has proposed a percentage increase that is higher than the norm for the year.

    So, for 30 years we’ve been falling further behind. I’d have preferred us to have put a little more into reserves, but that couldn’t be done while chasing this target of lowest council tax. Put it this way, if we had Stockport’s rate of council tax in terms of our spending, we’d not only be in clover, we’d be giving out rebates back to you!

    As it is, you can remain assured that you’re still paying the lowest rate in Greater Manchester (bar Wigan) after this increase.

    It’s not a great position this year and I apologise. I genuinely believe we have been so lean in council finances that we were always going to come to a year like this where we need to make a correction.