Labour condemns unsustainable Tory budget

Cllr Dave Wilson, Leader of Canterbury Labour Group, today condemned the Conservative proposed budget for 2022/2023 – a budget which deepens the debt crisis facing our local authority.

Here is his speech in full:

Firstly, I want to thank the officers for their work in pulling together a budget which is balanced and preserves as many services as possible, in the face of two years of the most difficult conditions I think any of us have seen. We’re all grateful for the exceptional support given by all the Council’s staff over the past two years.

Nonetheless, the services this Council provides continue to be constantly eroded by funding cuts and plagued by inflation busting increases in charges across a range of services. That is a result not only of the pandemic but of 15 years of deliberate shrinking of services by the Conservative group, which is obsessed with the idea of “small government”. That has been made worse by 12 years of cuts in central Government’sfunding of Councils, rendering it impossible to deliver an adequate range of high-quality services and the cross-community support which is the bedrock of local government.

This Council’s response has been based on trying to mitigate this chronic underfunding through two mechanisms: driving up charges for services wherever it can, and borrowing heavily to invest in property which it hoped would deliver a net yield.

Raising charges in this way is essentially inequitable and, as implemented by this authority, both crude and unimaginative.Costs fall on service users regardless of their ability to pay or their needs and circumstances. Residents in Canterbury are milked for parking permit fees at almost twice the rate of residents in Whitstable and Herne Bay, while people living outside those areas pay nothing. People with disabilities have had their free parking removed in the most callous way. Meanwhile, tourists pay no more than residents for their parking.

This approach is compounded by the Council’s failure to even begin to consider how best to deliver our simultaneous aims to address climate change and boost economic recovery. Revenue generation trumps everything else, despite our declaration of a climate emergency and the obvious need to support our High Street businesses. For a Council which aims to operate as a business, this abject failure to consider and prioritise competing goals and to develop even appropriatepricing techniques is astonishing. Worse, this year has seen the cutting of the local economy development team, an even starker demonstration of the Conservatives’ failure to support business and employment in the district.

An equitable distribution of services to all parts of the community is key to the legitimacy of this Council. We have to be able not only to provide support to the most vulnerable in our community through social housing and a range of advice and neighbourhood services but also to enable access to high-quality arts, our countryside and sports facilities. This Council’s ability to do that has been systematically erodedover the last 12 years through a combination of local and national policies based on a failed model of austerity, on a damaging Brexit policy, and a wilful undermining of the capacity and capabilities of this Council. None of that has been an accident. 

The approach of this Council has become increasingly incoherent, characterised by a reactive response to events, a wholly opportunistic reaction to investments, and a failure to balance long term and short–term challenges in a strategic way. We now have a net debt level of £169 million, the 26thhighest in the whole country for a district council. Most of that debt was incurred in buying a shopping centre whose value has predictably plummeted – not due to the pandemic but due to long-term structural changes in retail consumer behaviour.

The Conservatives, however, are incapable of learning from their mistakes. So the Council has been saddled with yet more debt: for the Station Road West car park, among others.

These are investments which never will produce, and never could have produced, a net surplus for this Council.

So, it won’t surprise you that Labour opposes this budget. While we accept that it was inevitable and justifiable to use reserves to balance the budget over the past two years of the pandemic, we have no confidence that the longer-term plan to rebuild reserves is viable.

Over the past two years, £5 million has been taken from the Council’s reserve funds to prop up services. Now, although the Conservatives propose to set aside £500,000 in each future year to rebuild those reserves, it will be at least 10 years before they recover to the 2019/20 level. Given that inflation is now forecast to run at 7%, that our revenue base is constrained to 2% by Government, and that funding this year has been supported by a series of short term one-year supplements worth around £1 million, no one can have any confidence that there will not be a further revenue deficit in 2023/24. Indeed, the Deputy Chief Executive’s report repeatedly expresses concern about the current reserves position, in very measured terms of course. But we cannot ignore statements such as “this year’s budget contains a high level of risk” and “the General Fund is the only resource not ear-marked to a particular future need”. The unambiguous advice of the responsible officers is that “every effort must be made to achieve the agreed savings in order to ensure financial sustainability”.

That is as stark a warning as you can expect to hear from officers who have shown considerable skill in navigating the difficult financial waters to date. When we add to that their comments on the medium–term financial position – that there will be “an adverse impact on … income levels” from the collapse in City Centre retail activity; that our financial position is “less resilient than before”; and that Government funding for local authorities is “low”, it is clear why we are entering a high–risk period.

If the Government withdraws the New Homes Bonus as it has told us it will, if Business Rates fall due to continuingvacancies in the High Street, and if the mysterious “Services”Funds are not renewed, then we will need to draw down from reserves yet again.

This is simply not sustainable. And the Conservatives have no solution to offer.

At some point the Leader of the Council is going to ask what we would do about it.

We have not brought forward any budget amendments this year. There are two reasons for that. Firstly, both opposition Parties have proposed perfectly sensible amendments in the past, which have been ignored by the ruling Conservative group. That, of course, is indicative of a view on the part of the ruling Group and Leader that cooperation, even in a crisis, is somehow beneath them. We regret that, since ultimately it damages our residents and businesses. But we can’t force you to listen, and we’re not going to waste our energy trying when you persistently demonstrate such a closed-minded attitude to our suggestions.

Secondly, Labour’s approach to this position is much more radical than mere amendments to an existing budget, tinkering at the edges of this disaster. The whole basis of the Council’sfinances needs a review, and over the next 12 months we will be working to produce a totally different approach in terms of priorities for expenditure and solutions to some of the underlying causes of these problems, which we’ll put to the electors in 2023.

Key to that will be a determination to end the erosion of the quality of life and prospects for the most vulnerable people in our district, and a much clearer strategic focus on long term response to climate change – something that threatens lives, homes and our economy. We will aim to rebalance services to ensure specific targets are met by specific Council activities. We will not leave the future of this district to the vagaries of market forces and the non-existent goodwill of the private sector.

Labour is serious about reforming the Council’s budget. We’re not expecting “rabbit out of a hat” funding increases, but we do believe that a whole system rethink of what is possible and what is required is needed.

This Conservative administration, hamstrung by its narrow ideological “free market” beliefs and the negative impacts of its own Government and its own previous decisions, is incapable of turning this disastrous position around, as this unimaginative, risky and inadequate budget clearly shows.

Labour will be voting against it.