Correcting the opposition’s falsehoods
The Residents Group / Lib Dem Administration put forward for approval a detailed Budget for 2021/22 at the Council meeting on 24th February 2021.
The COVID – 19 pandemic has hit all local Councils’ Budgets, and, contrary to earlier promises, central Government has only covered part of the extra costs and lost income arising from the impact of restrictions on business activity this financial year. We estimate the net cost to the Council in this financial year 2020/2021 at about £4 million.
Fortunately, we have been building our reserves for day to day expenditures over recent years. As at 31 March 2020, the Council’s revenue reserves ( including the General Fund, but excluding Statutory Reserves and CIL funds) stood at almost £23 million, compared to almost £19 million as at 31 March 2016 just before we took over the Administration. We were not running down the reserves.
The Budget we constructed for the coming year is a balanced Budget which incorporates over £2.3 million of savings, including a freeze on Councillor Allowances. In addition, like almost all the other Surrey Local Authorities, we have increased our share of the overall Council Tax bill by £5 a year for a Band D property, which equates to an increase of 2.2%. £37.62 of the total increase in your ( Band D) Council Tax bill, roughly two thirds of it, goes to Surrey County Council, a percentage increase of 2.5%. £15 of the increase (5.5% in percentage terms) goes to Surrey Police. Slightly less than one tenth of the increase in your Council Tax bill is kept by Elmbridge Borough Council.
The Budget for 2021/22 is constructed on a prudent basis which recognises the uncertainties inherent in the current economic situation. While further use of revenue reserves is expected in the coming year, our central forecast is that our revenue reserves will not fall below £12 million as at 31 March 2022.
Our Balance Sheet remains strong and we have no need to borrow funds short term to “balance the books”. Our long term, fixed rate external borrowings, which largely fund the £90 million Investment Property portfolio, are forecast to stand at £54.7 million as at 31 March 2021. At that time, our short term Treasury investments are expected to stand at £65 million. We therefore have no need to even consider approaching central Government for a relaxation of the rules relating use of capital funds for revenue purposes. We do understand that two of Surrey’s other 10 Districts and Boroughs are in discussions with central Government for such “capitalisation directions”, which would probably entail some measure of central Government review of their financial arrangements. London Borough of Bexley, Luton, Peterborough and Eastbourne have already gone down this route.
The Council’s Budget for 2021/22 was published on 3rd February as a part of the Cabinet papers for its meeting on February 10th. This allowed all Councillors and members of the public three weeks before the Council meeting on 24th February to scrutinise the proposals and make comments or table alternative suggestions for the way forward in 2021 / 2022. There was also a meeting of the Council’s Performance and Finance Panel on 8thFebruary at which the Head of Finance was present to answer questions about the Council’s financial position and in particular the Budget proposals for 2021/22. At no point did any of the Conservative Councillors table any alternative proposals to what the Administration had proposed.
At the Council meeting on 24th February, when the recorded vote was taken in respect of the “Revenue and Capital Budget and Council Tax 2021/22” item, none of the Conservatives tabled any amendments, nor did any of them actually vote against the proposals – they all abstained. Why did they not speak up when they had the chance? It is the Conservatives who have failed to engage during the last two years, burying their heads in the sand because they cannot see a better way forward than the proposals already agreed between the senior Officers of the Council and the Administration.