The speech below was given by Mick Scrimshaw, Labour's Shadow Finance Portfolio Holder, at the emergency budget setting meeting in response to the Conservative ruling group's setting of Northamptonshire County Council's budget today (Wednesday 28th February):
Normally at this time of year, I stand up and give the Labour opposition’s alternative budget.
The reason for doing that has been two-fold. Firstly it is an opportunity for us as a political opposition to get across our message to the public about what we would do differently if we had the chance and about what our values and priorities are, and they are often different from the administrations.
The other reason is to offer the councillors in charge ideas and suggestions that will help with the smooth running of the Council and to help with the financial problems this council has had for a number of years.
In the past, I’ve been told that "I don’t know what I’m talking about" and, perhaps after they realised I did, that I was "scaremongering". I don’t think anybody is saying that anymore!
I’ve even been told by the now finance portfolio holder that one of our particular ideas was "socialist claptrap". Interestingly, that particular idea, along we’ve others we’ve put forward, are now belatedly being adopted. But I’m afraid it’s too late!
As well as during the annual budget setting meeting, my colleagues and I spend the rest of the year in Full Council meetings….and at Cabinet meetings and other places highlighting where we think you are going wrong and pointing out the failures in your financial planning.
However, we are now well past those days.
The serving of a Section 114 Notice the other week, and the publication of a review into the Council’s finances by the LGA (Local Government Association), along with the Secretary of State sending in his own inspector, have just proved what we’ve been saying for a long time!
This council is effectively bankrupt and cannot possibly carry on as it has been.
And on top of that, last week we had the KPMG issue an Advisory Notice that the budget we’ve all been scrutinising the last couple of months was potentially unlawful, the first time any council anywhere has had this issued on them, and we have been left with these current proposals being hurriedly cobbled together at the last minute, without any further scrutiny, and without any further public consultation. Indeed yesterday morning I was handed one set of proposals before this was hasty withdrawn and replaced with another set not half an hour later. Absolute chaos!
Today, therefore, I am not proposing to offer an alternative budget because quite frankly it’s impossible. Things are far too serious and this council is already well past the point of no return.
The budget before us today is in itself a recognition of that fact, and I doubt there is any member of the council sitting here today, or member of public watching these proceedings, that believe for one second this budget is a sustainable answer to the problems.
And it is for that reason that we cannot support this budget.
If you genuinely believe that this budget puts the Council back on the straight and narrow you are only fooling yourselves.
The original Section 25 report from your senior finance officer spoke of the council facing “an unprecedented set of challenges” going forward. It highlighted further pressures of almost £20m since the draft budget was published and specifically warned you that using the extra £2.7m generated by the extra 1% of Council Tax you now intend to levy should not be used for what you were originally planning to use it for, and called for a “realistic and sustainable budget for 2018/19”, but most tellingly did not say that that budget was it!
Since then a budget with even harsher cuts to services has been put together, but it still does not alter the fact the budget is not robust or sustainable, with him now admitting the new savings may not be sufficient and further changes may be required in-year.
This latest budget is nothing more than a sticking plaster. Passing it is simply a mechanism to legally allow you to set the Council Tax rate and get through this week and this week alone! It does nothing to address the fundamental flaws in this council’s finances which we all know are caused by many things.
Primarily, of course, has been the long-running issue of underfunding from central government, and coupled with the Conservative’s austerity agenda and the crippling cuts this has put on local government, this council along with many others have been pushed to the brink.
However, the local decisions that have pushed this particular council over the edge are all homegrown.
The first is clearly a refusal to have a sensible policy on Council Tax because of short-term electoral advantage and populism. The Leader herself has on more than one occasion admitted this was a mistake.
Had the Council adopted a policy of measured, small and affordable Council Tax rises, these increases would have gone into the base budget year on year, and on while that on its own would not have entirely solved the problem, it would have helped and taken away the need to veer from one extreme to another on Council Tax rises with yet another massive above inflation tax hike planned today.
But that’s not the only reason... Far from it.
For the last five or six years, this Conservative council has followed an ideological policy that has literally cost the residents of this county tens of millions of pounds. I refer of course to the now discredited outsourcing model of Next Generation!
Due to a lack of understanding about how public services actually work, and a blind belief that private enterprise is always good and the public sector always bad, and therefore that public policy should follow the private sector’s working practices, this council has spent time and money desperately trying to make those commercial ideas fit a local government model.
Well, guess what? It didn’t work!
It was never going to, and now we are seeing reports arguing for management and operational teams being brought back in-house because it will be more efficient! Well, what a surprise….it was obvious to some of us from the start and now it seems at last also to you, but not before millions and millions has been spent.
£80m extra spent in Children’s Services after your cuts decimated the service in the first place to only get it from ‘inadequate’ to ‘requiring improvement’.
...And again and again, there has been no plans (until now) to invest in capital schemes to bring in cash in the way that other councils up and down the country have been doing for years. Why? Because it didn’t fit with your idea of a small council! If you’d have been doing that the last few years you would by now be bringing in surplus revenue of millions of pounds. Money that could be spent on providing services!
Instead, what is the plan now? To sell off the County Council’s assets... The proverbial family silver!
This budget relies on this short-term fix. To sell public buildings and public land for a short-term gain. And once they’re gone, they’re gone. Lost forever to this council and to the people of Northamptonshire!
This was the basis of the concerns raised by KPMG with them suggesting that the amount of reliance the Council has on this policy may not be lawful, as they questioned whether these huge amounts could possibly fall within the government’s guidelines. That was when the Council expected to raise £40m in this way. Since then we have had the Finance Portfolio holder suggesting between £14m and £18m was a more realistic figure. Yesterday we were originally given the figure of £30m and then later £31m. How can we have any confidence in this figure? It is changing week by week and even day by day! The original example given by KPMG was of a council only doing this to the tune of £7m in one year, not £31m!
And in this financial year, the plan was to have sold over £30m worth of assets and you’re so far only achieved just over £1m. How on Earth can we have trust in this policy?
The budget before us today is full of holes!
For example, it clearly states that in relation to cuts in highways maintenance, it could leave the Council “sitting outside of national guidance and at a high risk of legal challenges”.
Since the publication of the original draft back in December there have already been extra pressures of £20m identified.
Again and again during the budget scrutiny process Councillors on all sides questioned the Council’s ability to forecast the amount of cash it actually needed to provide services. Why should this year be any different? Last year we had the zero budget exercise that was supposed to highlight the actual need for our services through the structural deficit it found. Guess what? It didn’t work, and once again all through the year the council has been grasping at straws trying to meet demand.
Anyone that thinks this isn’t also a risk for this budget is living in cloud cuckoo land.
The 2018/19 budget is full of these risks.
There are still risks around the possible misspending of capital receipts on revenue which is still a risk for the current financial year in that by the end of this year planned to allocate £70m in the last two years alone in this way. This in itself may lead us having to go to government on bended knees for a loan.
There are risks around backdated ‘sleep-in allowances’... More millions to find.
There are risks about partnership working and given this council’s bad track record of working with the Borough and District councils and the NHS. Anything in this area has to be questionable, again a point made by the cross-party scrutiny workshops.
I’ve been told before now by the previous Finance Portfolio holder, that budgets are not set in stone and can change throughout the year. You’re not kidding. Every time I’ve picked up a budget report during the last few weeks there have been changes. The budget before us today has itself altered again and again since we scrutinised it during the 20-odd scrutiny meetings over December and January.
We even spent time in discussing the removal of the budget for outside consultants only to be told now that that wasn’t actually what that particular pot of money was for! What on Earth was that about?
I repeat my claim that the budget we are being asked to set today is full of holes and rather like the military doctrine that a battle plan does not survive first contact with the enemy, this budget will not survive in the state it’s in until this time tomorrow!
Don’t ask us to support this budget. It’s a work of fiction, and while passing it may well deal with the legal requirement to set a budget today, it will not solve the problems at this Council. It will not deal with the financial mismanagement we’ve seen over many years and it will do nothing to answer the desperate need to provide better services to the people of this County!
It will result simply in more and more desperate cuts to services and not offer the forward-looking financial stability we need.
I’m tempted to say you’ve made the mess and it’s up to you to get out of it. But I won’t because they only people that will hurt are the people of Northamptonshire. So pass your budget if you want, but realise that as of tomorrow you’ve got to go back to the drawing board and start again.
Only this time you must listen to others! Listen to the LGA, listen to your professional advice. Listen to your own back benches, and listen to us! We will be there to offer advice and suggestions, but this time, please listen!
Do not delude yourself that this budget makes everything all right. It doesn’t!
The last point I would like to make is that I’ve only been a County Councillor for five years. During that time every single senior Director, including the Chief Executive and the Finance Director have been replaced, some of them more than once, and we are still in a financial mess, but we still have the same councillors in charge. Perhaps it’s time for them to move on because while they are still there this authority is not going to move any further forward!