Financial crisis worsens at County Hall as Tories ask Surrey residents to pay more for less

January 24, 2018 12:30 PM
Originally published by Surrey County Council Lib Dems

Surrey County Hall - broken glassLiberal Democrats on Surrey County Council have criticised the Conservative-administration for budget proposals containing £54m of further cuts to services and a 6% council tax rise. The budget recommendations will be approved by the Council's Conservative Cabinet on Tuesday 30th January, and then by the County Council on Tuesday 6th February.

Cllr Hazel Watson, Leader of the Liberal Democrats on Surrey County Council, said today:

"This budget contains drastic cuts to services such as libraries, road maintenance, services for children and families as well as cuts to support for people with learning disabilities. They come on top of the unpopular cuts which have already been made to services including highways, community recycling centres and support to vulnerable people. It is a failure by central government to provide adequate funding to the County Council and a failure of the Conservative-administration to get to grips with the financial problems at County Hall.

"Although I am pleased that the Conservative-administration, unlike last year, has not tried to raise council tax by 15%, they are proposing a 6% rise as this is the maximum increase possible without triggering a referendum. This is still unaffordable for many Surrey residents, particularly for those on fixed incomes. The Conservative-administration has been forced into proposing this rise due to the financial crisis at County Hall and the shortfall in government funding for essential services such as adult social care.

"Adult social care requires extra funding from central government, funding which the Leader of the Council has failed to secure and that the four cabinet ministers who are MPs in Surrey have failed to deliver. Whilst it is good news that the County Council will be able to retain 100% of its business rates growth in 2018/19, this pilot scheme should be extended beyond just one year. If it does end at the end of 2018/19, the County Council will be facing an even more difficult financial situation as the adult social care precept, which allows the County Council to raise council tax by 3%, will also end leading to a worsening financial position for the County Council in 2019/20.

"However, the Conservative administration needs to take its share of the blame for the financial crisis at County Hall. In December 2016, the Conservative-administration commissioned and paid almost £25,000 for a report written by the Chartered Institute of Public Finance & Accountancy which contained many criticisms of the County Council's financial position. It stated that "the Council's financial plans are not robust and it is at risk of becoming financially unsustainable" and that the council's financial position was "extremely worrying". Given the financial mess at County Hall, I think the report was entirely correct in its analysis and that its warnings have not been heeded.

"I welcome the County Council's plans to use capital receipts to fund innovations and transformation projects for essential public services. By using technology and other innovations, services can be improved and costs reduced which would place the County Council on a sounder financial footing. However, these new rules on capital receipts were introduced in 2016 and the Conservative-administration should have taken advantage of them then and therefore avoided some of the painful cuts to services for Surrey residents.

"With regard to the many empty council owned buildings across the county, the County Council has failed to utilise them properly, instead letting them decay and incurring hundreds of thousands of pounds of costs keeping them empty, in some cases for over a decade. In just one financial year, 2016/17, £307,464 was spent on maintaining 20 vacant buildings. This is a straightforward waste of money and a missed opportunity to bring in capital receipts or rental income which would have improved the County Council's financial position.

"Because of the financial crisis at County Hall, the Conservative-administration is now gambling about £200m of pounds of council tax payers' money on purchasing commercial property, such as warehouses and office blocks, hundreds of miles away from Surrey. This is risky and will not promote economic growth within the county as so many of the properties are so far away.

"The Conservative-administration has repeatedly assured residents that income from commercial property will be reinvested in services but it has recently earmarked £3.8m of this income to be spent on purchasing more property. Every day, the County Council is acting more like a property investment company rather than a local authority. Even the Government, in a recent piece of guidance, had to remind councils like Surrey County Council that "local authorities need to remember that their prime duty is to deliver statutory services for local residents" - this is something that the Conservative-administration has clearly forgotten.

"This budget is a bad deal for Surrey residents, who are being asked to pay more for less. The County Council's own survey of residents revealed that only 37% of people believed that the County Council provided value for money. Surrey residents should not have to pick up the bill or lose essential services because of the failures of this Conservative-administration".

Notes

A link to the Council's budget papers can be found here (Item 10):

https://mycouncil.surreycc.gov.uk/ieListDocuments.aspx?MId=5812&x=1

The CIPFA report can be found here:

https://surreylibdems.org.uk/en/document/cipfa-report-dec-2016#document

DCLG guidance on the role of local authorities can be found here:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/658458/Consultation_on_the_proposed_changes_to_the_prudential_framework.pdf

A link to the County Council's resident survey can be found here:

https://performance.surreycc.gov.uk/stat/goals/4es8-8jxa/qura-ay7g/4g6h-4si2/view

The FOI document containing information on the cost of empty buildings can be found here:

https://surreylibdems.org.uk/en/document/empty-buildings-foi#document