This is the second article highlighting how Shropshire Council’s leaders have had an oddball start to the New Year.
In an interview on BBC Radio Shropshire on Friday morning, Shropshire Council leader Peter Nutting denied that Shropshire Council has been making cuts. Pressed hard by the interviewers, Eric Smith and Clare Ashford, he refused to agree that that the council had been making cuts. It had been trimming and moving to working differently but not cutting. Smith pressed on the “C word” but Nutting refused to utter it.
With the council leader in denial over Shropshire Council has been making cutbacks and the deputy leader demanding censorship of vegan ads, 2019 is promising to be an oddball new year in local politics.
The BBC Radio Shropshire interview that forms the basis for this article is currently online, beginning just after 2 hrs 06 minutes.
Peter Nutting followed a pre-recorded snippet with Councillor Lee Carter on the way that Telford and Wrekin have been investing in capital projects for some years to ensure that “front line services are not cut”. That might have got Peter off on the wrong foot.
He talked confidently of the Shropshire Council’s new housing company: “We don’t need to go out to get the money. We have the money.” There’s £25m in a financial strategy reserve, he said. And £93 million in earmarked reserves. £14 million in the general fund balance. And we have £100 million in liquidity. He said the council is not short of money, or short of land except in the south of the county.
As I comment below, this argument doesn’t stack up. Peter Nutting then slipped into difficulties over cuts.
Clare Ashford asked whether we would see more cuts in 2019. Nutting’s response was that it depends what you call cuts. “I don’t regard some of the service reorganisation as cuts.”
He talked about squeezing departments. Public health at the forefront of them. He told Clare: “You mustn’t assume that spending less money means a less efficient service.” He continued: “It’s about squeezing things all the time.”
Eric Smith cut in: “Peter, in the two years you have been leader of the council, what have you had to cut?”
Nutting: “I don’t think we have cut much.”
Smith: “The word cut will never come out of your mouth.”
Nutting: “No, it’s about change.”
Pressed by Smith, Nutting said that since 2012 when the council went unitary, it had lost over a thousand staff. [1] But a lot of those staff now work for other companies contracted to Shropshire Council he claimed. He cited the case of highways, where WSP has taken over the engineering side of the business. He didn’t mention that the highways budget has been stripped of £5 million this financial year and will lose £5 million next year.
Eric Smith: “Have you cut things because of a lack of money?”
Peter Nutting: “We have trimmed things because of a lack of money.”
Eric Smith: “You will not say the words cuts.”
Peter Nutting: “No, because it is about changing the way we work.”
Pressed further by Smith, Nutting said: “I don’t think we are cutting services. We are delivering them in a more efficient way.”
This rather oddball interview that trouble me in two respects.
The first and most obvious is the council leader’s “Yes, there are no cuts” pose. He claims that things are being done differently and more efficiently.
A £10 million cut in highways repairs is certainly a way of doing thing differently, it puts the costs of bad roads onto motorists’ repair bills. The £2 million cut to the public health budget put the costs onto the NHS. Taking away recycling bring banks, closing of the recycling centre at Coder Road, reducing the advice centre in Ludlow Library to 2 days a week, closure of children’s centres, shutting down of youth services, withdrawing funding from Citizen’s Advice… I could go on and on.
The council must trim and become more efficient, but it cannot deny that is cutting back hard and delivering a lot less than it used to.
My second concern is that we have not yet seen how much the Shropshire Council housing company will cost to get underway. It will be several years before it returns a profit or earns enough cash to invest in new housing from its own resources. Peter Nutting claims we can tap into £93m squirreled in council reserves. But most of this is allocated to propping up council day-to-day running costs or for specific purposes. Reserves are due to fall by 60% over the next two years. [2] That will cut reserves to the bare minimum.
Nutting claims that the £100m general fund balance could be used. With the costs of adult social care children’s care accelerating and the council running out of reserves, I don’t see that Nutting has enough room for manoeuvre. Nutting might be able to squeeze the odd million out of council finances but he will be setting up the housing company on a shoestring.
Notes
[1] Shropshire Council was formed as a unitary council in 2009.
[2] In March 2018, Shropshire Council held £92.6m in reserves. (This excludes £4.5m in the Housing Revenue Account which cannot be used for anything other than the council’s role as a landlord of council housing). By March 2021, the reserves will fall to £36.6m after the council has raided the reserves to fund day-to-day services. This remaining pot of cash is split between provisions and earmarked reserves. Provisions are set at a level that ensures the council can cover future liabilities and although £22.7m might sound a high figure it is just 4% of Shropshire Council’s £562m annual budget. Earmarked reserves are earmarked for capital projects and the waste contract (which goes up with inflation every year whether actual costs have gone up or not). The promised £93m suddenly looks like £0m.
I think I am right in saying that the Council pension fund has a significant deficit, Andy. Please could you comment on this for me? Am I wrong and, if not, what consequences might this have?
Many thanks
John
No you are not right about the deficit. It’s been pretty near break even over the course of the last year. An update is due in March.
So is there money, or not?
Surely, if the evidence is there, and the above information is correct, it is time for some kind of legal action.. especially as the leader of the council has said that reserves can be spent. Ludlovians have been told that isn’t the case.. hence the shopping centre purchases.
Who are we to believe?