Times are tough. There are more funding cuts to come. But Shropshire Council’s assumptions the worst will happen are not justified. They will damage the council’s role as a civic leader and its ability to act for the public good.
Shropshire Council is beginning to consult on some tough financial decisions. Since 2009, the council’s budget has been reduced by £146m due to significant government cuts. It says it expects lose a further £43m by 2020/21, when the government is expected to end the council’s Revenue Support Grant. The council currently estimates that it will be a further £77m worse off in 2020/21, once inflationary increases and growing care needs are taken into account. So the council has begun to consult on how to manage a £77million cut to its finances.
I am not convinced by the council’s approach. It is going out to consultation based on the worst possible case for future finances. I think it is running ahead of itself in making such important decisions at this point. George Osborne will announce the outcome of the Comprehensive Spending Review (CSR) and present his Autumn Statement next Wednesday (25 November). No one is expecting Osborne to be generous but he may announce that council tax can be increased by an extra 2% to pay for care costs without the need for a referendum. He has already said that councils will be able to keep 100% of business rates from 2020/21.
Although council leader Keith Barrow has said, “On the face of it, [this] means an extra £40 million of income for us,” the cabinet is currently working on the basis that the change to business rates will be financially neutral. I think this assumption is premature. Most commentators expect that local councils will be allowed to retain business rates as a replacement for loss of the Revenue Support Grant (RSG). If we keep business rates but lose the RSG, then we may have up to £40 million above the council’s current estimates for 2020/21.
Our financial future is uncertain. But we will know much more after the chancellor’s statement on 25 November. That’s why I think it would be better to hold back a couple of weeks rather than launching a consultation based on worst case assumptions.
Some might argue it is sensible to assume the worst case scenario. I don’t agree with that approach. The best council staff will leave if they fear for their jobs – many already have. All council services need to innovate and reinvent themselves to cope with growing needs and reducing funding. No one is going to invest effort or passion in a service that the council could axe at any moment.
It is not just that Shropshire Council will be consigning a large number of services to the waste bin. It is moving into a position where it will no longer have the flexibility to react to changing needs and unpredicted circumstances.
I have always believed that local councils have a role in civic leadership in times of plenty and poverty, and in times of calm and chaos. But I think the political decision has already been made by the cabinet that Shropshire Council will not be a civic leader for our county in the future. The bleak vision propagated by Keith Barrow’s cabinet is that the council is simply an administrator of statutory services, preferably delivered by someone else.
That’s why the cabinet is consulting on deeper cuts than it may need to implement.
That’s why the cabinet is pushing ahead with this consultation just days before the Comprehensive Spending Review and Autumn Statement.
I get the impression that what George Osborne will say on Wednesday does not matter to this council leadership. Council leaders have lost faith in their ability to work for the public good in this county. They have lost interest in civic leadership. They have lost sight of the vital role that councils have in all of our futures.
Times are tough. But that doesn’t mean that we have to all but destroy a council that has so much to contribute to the future of our county.
Sustainable Business Model: Categories of protection
Shropshire Council’s cabinet is classifying services into four categories under its Sustainable Business Model:
Protected. Essential services, expected to be more costly in the future due to demographic, inflation and other pressures. Rises in council tax will be need to pay for the services. Expenditure expected to grow from £138m in 2015/16 to £163m in 2020/21.
Maintained. High priority services be maintained into the long term future, providing they can survive within a cash limited budget level or raise external income, perhaps as part of ip&e. Expenditure expected to reduce from £30m to £25m (£28m under one option).
Temporary. Lower priority services funded from grants, especially the Revenue Support Grant. These services and functions will be supported “on a reducing basis” until decommissioned, though ip&e may take them over on a commercial footing. Expenditure expected to collapse from £47m to £0.2m.
Decommissioned. Lowest priority services that cannot be supported beyond the very short term. ip&e could run these services providing it is possible to put them on a commercial footing before public funding is removed. Between £73m and £78m of services will be decommissioned by 2020/21.
Protected and maintained services are not safe. The council says if any such services spend above a set spending cap, it will decommission “elements of services and functions”. To keep within these caps, the council is considering heavy cuts across its six directorates:
- Adult Services – £15m cut by 2020/21 (15%).
- Children’s Learning and Skills – £7m cut (35%).
- Children’s Safeguarding – £10m cut (34%).
- Commissioning – £34m cut (44%).
- Public Health – £1.4m cut (73%).
- Resources and support – £10m cut (27%).
Sustainable Business Model: Protected services
Here are the core nine services in Shropshire Council’s view:
|Draft Protected Services||Budget 2015/16|
|Adult Social Care Commissioned Support||£48.1m|
|Adult Services Directly Provided Support||£4.5m|
|Adult Services Staffing||£5.9m|
|Child Protection Team||£16.1m|
|Waste Collection and Disposal||£24.7m|
. The council is assuming that the Revenue Support Grant will be zero in 2020/21. The RSG is a central government grant to local authorities which can be used to finance revenue expenditure on any service.