At last night’s meeting of Full Council, Kingston councillors approved the Liberal Democrat administration’s budget which delivers the lowest Council Tax rise in Kingston’s history at just 1.9% – but protects front lines services and spending to invest in new schools and classrooms for the Royal Borough.
Councillors refused to back the Conservative amendment because of its “unsustainable levels of risk” and the unspecified cut backs affecting non-statutory services, which the Tories tried to build in to agenda for a 0.8% Council Tax increase. Cllr Frances Moseley described their amendment as “smoke and mirrors”, while Cllr Simon James said it was “fantasy budgeting”.
The Liberal Democrat budget was passed with 25 votes in favour, 20 against.
Text of the Leader of the Council’s speech
Thank you Mr Mayor.
I would like to put on record my thanks to everyone who has helped put this budget together. I pay particular tribute to Peter Derrick and Jeremy Randall, the other finance officers and every other officer involved for their thorough hard work and innovative thinking in an extremely difficult financial climate.
I must also praise the Executive Member Cllr Rolson Davies, who stepped in to scrutinise officer’s proposals at fantastic length when I was ill before Christmas. Without him, this budget would have been harder to create and present.
And if I fail to mention the work of my political office, my life wouldn't be worth living – not least because of the work they do in research and progress chasing.
The budget the administration is proposing tonight has received unprecedented interest and attention from our Conservative opposition, who for the past seven years has failed to propose a single opposition budget, a single recommendation at budget scrutiny, or a single opposition amendment -- apart from of course, the suggestion last year that we remove £50,000 from the road repairs budget in between the two coldest winters of the decade.
This budget may also receive exceptional interest and attention in the local press, in the regional media and due to free communications age we live in today, even national comment and scrutiny.
The reason is not because of the budget’s content: such as the ‘perfect storm’ of recessionary pressures which have squeezed and frustrated local authorities across the outer-London area almost to breaking point; or the scandalously low Government grant we receive to deliver the local services on which residents rely; or even what the Council has been able to achieve in this context -- protecting front line services and attracting a landmark investment of £300million for local schools.
No. There will be exceptional interest in the budget the administration proposes tonight because of politics. We are setting the level of local Council Tax two months and six days before London-wide local elections and most probably directly alongside, the most important General Election since 1997.
There is a danger that such an historic political event has moved the goalposts of budget setting: that local authorities will set Council Tax with the primary objective of short-term popularity, their efforts focused on headline grabbing cheap tax to win votes.
I am adamant however, that this cannot be the behaviour of a responsible administration. As the country continues to struggle with the effects of the longest economic downturn in modern history - local households will be more reliant on public services. Our priority must be to set Council Tax levels and the medium term budget risks at levels which are affordable, but do not threaten important local services, particular those used by elderly, disabled, vulnerable individuals and low income families.
On this principle, we propose a Council Tax increase of 1.9%: by far the lowest in Kingston's history, while making additional spending solely for the purpose of investing in the new schools and classrooms the borough needs.
To begin, I think it would be helpful to give voting members a little detail on the financial context in which tonight’s budget has been set:
The dire economic climate has meant that our income from parking charges, planning fees and interest receipts for cash management is falling – the loss expected for 2010/11 is an eye watering £1.3million. At the very same time, residents are increasingly in need of support from local services: more children are being taken into care; there is rising demand for public sector schools, adult social care, council housing and housing benefit.
Meanwhile, the continued instability of the wider economy, means that the inflation rates are fluctuating - increasing the real cost of providing our statutory services.
As I and the Executive Member for Transport have warned before, the Conservative Mayor of London is able to afford his headline grabbing GLA precept freeze because he is palming off the real costs of running London onto public transport users, the budgets of the capital's emergency services -- and the London boroughs.
The impact of the Mayor’s budget on Kingston has increased the cost of providing the Freedom Pass scheme by £700,000; and Mayor Johnson's 'Crossrail levy' hits local school budgets with a £44,000 bill. Deputy Mayor Sir Simon Milton was forced to admit on the London Politics Show that the Mayor had passed onto the boroughs than people were saving from a Council Tax freeze, and that people would be worse off as public transport costs rise.
The Labour Party is also doing its own fair share of re-distribution wealth – that is, taking from local authority budgets to give to the national Government.
They are halving their contribution to the Freedom Pass, raising Kingston's obligations by £400,000; reducing housing benefit subsidy for private leased housing, increasing our costs by £800,000; the post-Laming reforms of safeguarding children will cost us £270,000; and the Southwark judgement on homelessness means that RBK will be paying the accommodation and support costs for more young adults.
Pre-election policy fever at Westminster has dealt the Council a so-far unconfirmed bill towards the new services promised in Labour's upcoming 'personal care at home bill'.
And yet, Kingston's revenue support grant from Government has not improved to meet the increased demands on this year's budget. For 2010/11 we were given the 1.5% "floor" increase - the equivalent of just £1.55 extra per head of population, when the average national increase was a 4% boost.
This central grant we receive to contribute towards the costs of providing Council services remains one of the lowest in London: £231 per head of population – incredibly poor even compared to the outer-London average, at almost double the rate of £403 per resident.
Meanwhile, the Tory flagship borough of Hammersmith and Fulham, which will no doubt be warmly praised by opposition members for managing to cut their Council Tax level – receives three times the level of central Government help: £678 per head.
Residents living here and in other outer-London authorities such as Bromley and Croydon are punished by the formula of the grant settlement. Households in Kingston have to meet almost 70% of the costs of local services through Council Tax, compared to 42% of London as whole.
And so, the level of local Tax is used by our opponents to unfairly characterise this borough as being high spend and waste - when the truth is that we spend £18 less per resident than the London average - yet deliver the best education services in the country, the lowest crime rate in the capital and one of the most comprehensive and successful local recycling schemes.
The poor financial settlement we received from government this year, although disappointing, did not come as a surprise. Thanks to this administration's commitment to prudent financial management and long-term planning, we are in the fortunate position of already undergoing substantial annual budgetary savings.
The 'One Council' modernisation programme was designed to improve local services while keeping the burden of Council Tax as low as possible for residents – an objective which has become increasingly important in 2010's unpleasant economic climate. Through the streamlining of service delivery, One Council will make gross savings of £6.2million this year.
This level of back-office saving would have enabled us to manage the additional costs of serving our residents in the recession; meet the new demands on our budget imposed by the Government and the London Mayor's office; and still deliver a freeze in the Council Tax for this year.
We are also covering the costs of the damage done to the roads by the winter ‘cold snap’ by taking £400,000 from the insurance fund which would normally be used to pay compensation to people who have accidents from this sorts of damage. It seems entirely reasonable to use that money in a preventative rather than post-hoc way.
£140,000 of the total will be committed to the serious carriage way damage to three roads in the borough and the remaining remainder will be allocated to neighbourhoods, ring fenced for roads damaged by the winter weather.
But, as every member of this Council will be well aware, the borough is facing an unprecedented and unpredictable rise in demand for local school places.
The Government, Greater London Assembly and various local government organisations have recognised that the problem is London-wide: the capital is experiencing an escalating birth rate while the economic downturn is affecting the mobility of families, and fewer households are choosing to pay for private education. The trend also appears to have been exacerbated in Kingston because of the excellent reputation of local schools and children’s services.
When we were made aware of the shortcomings of the GLA’s population forecasts, it became clear that the Council would need to make significant financial investments in the permanent expansion of primary level education in order to guarantee 450 new school places in time for the start of the academic year, 2011.
We also would need to plan ahead for when the increased pupil population in our primary schools transferred to local secondaries in 2015.
Owing to Kingston's outstanding management of the re-build of Chessington Community College for September 2008, the lobbying of Government from local Liberal Democrat politicians and the quality of our submission for funds - we were awarded as the first 'good or better performing' Council in the country to be accepted into the national Building Schools for the Future investment programme.
Our successful bid means that the borough will receive over £300million from Government sources, money which we have prioritised to spend on a new secondary school in the north of the borough in time for the 2015 deadline - and will later be used to transform learning environments and facilities across the borough into 21st century centres of learning.
Yet, in order to access the BSF money, the Council is required to spend £8.668 million for the local scheme’s start up costs – of which £1.8million is needed in upfront revenue expenditure in 2010: the equivalent to a 2.1% council tax increase.
Therefore the RBK contribution to the 2010 Council tax level of 2.5% reflects the "one off" cost to BSF, on top of the equivalent of a 0.4% rise to absorb the revenue impact of the primary capital programme in time for start of the academic year in 2011.
With the GLA precept frozen, 'street level' tax falls to 1.9%: the lowest Council Tax increase in Kingston's history, well below this year's basic state pension rise of 2.51%, as well as the current level of inflation.
However, the opposition will no doubt ask why the administration has not “cut, cut, cut again” (in the words of Cllr Codd) in order to afford the building of new schools – on top of a convenient pre-election Council Tax freeze.
Their colleagues on Conservative-run London authorities committed themselves to the regional ‘drive to zero’ as far back as October last year, without knowing what the economic landscape would be like today.
As I predicted, a number of these have had to back track on a freeze – because, for those authorities which do not enjoy favourable grant settlements from Government, such irresponsible budgeting will cause immediate financial harm as they struggle to stay within the over-tight financial envelopes they set themselves.
The clear benefits in short-term political gain will cause long-term damage to the services on which low-income and vulnerable households rely. As would the Conservative preference for closing the Rose Theatre, destroying the progress we have made in Kingston Town Centre to tackle head on its after-dark drinking culture, driving out crime and disorder, and safeguarding the local economy – on which resident’s job depend.
London boroughs’ ‘race to the bottom’ in order to win votes is dangerous and absurd, especially when the rest of the country raises their tax levels: our neighbours in Conservative Surrey has set a 2.5% increase, Kent at 2.1% and Conservative Oxfordshire is 2.75%.
In closing, I commend tonight’s budget. It delivers the lowest tax rise in Kingston’s history – but protects the front line services which residents need, especially as they struggle out of the recession. It also enables us to permanently expand school places, deliver new buildings and invest in the classrooms of the future.
Mr Mayor, I move the proposals set out on the agenda.