Council Finances

Council Finances after a Challenging Year

The EBC Residents Group/Lib Dem Administration put forward for approval a detailed Budget for 2021/22 at the Council meeting on 24th February 2021. This sets out the challenging circumstances the council is facing and the share of this year’s council tax increase which will come to Elmbridge.

“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 the lost income arising from the impact of restrictions on business activity this financial year. The estimated net cost to the Council in this financial year 2020/2021 is about £4 million.

During the pandemic the council has paid out over £30 million in direct support to businesses, awarded over 100 grants to help independent retailers adapt to social distancing, supported over 25 shops to sell on-line with the Digital High Streets grant and helped launch over 20 new businesses over the last year.

Fortunately, the Administration has been building 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 the RA/LD Administration took office.

The Budget 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 Districts and Boroughs, the share of the overall Council Tax bill will be increased 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. Less than one tenth of the increase in your Council Tax bill is kept by Elmbridge Borough Council. 

The Administration believes that 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, the central forecast is that revenue reserves will not fall below £12 million as at 31 March 2022.

 

EBC Finance – Covid 19 Implications

Elmbridge Borough Council’s finances are facing a perfect storm caused by the Covid-19 pandemic. A report from the Deputy Chief Executive was reviewed by the Council Cabinet  at its meeting on Wednesday, 10th June. The situation was described as a “huge challenge for the current year as well as the medium and long-term finances.”

The pandemic has resulted in the Council having to spend more than it planned and, at the same time, receiving less money than it expected. The recommendations in the report to Cabinet included a review of “all discretionary and non-essential spend” in the current financial year and of the current capital programme.

The Council does have money held in reserve for unexpected events but the recommendation to the Cabinet calls for the Council to “limit the draw on reserves to mitigate the deficit and have plans in place to replenish the reserves being used, over the medium term.”

The Council has needed to fund more activities as it responded to the pandemic for example more “meals on wheels” and housing for rough sleepers; increased costs are faced in order to carry out normal operations, e.g. PPE is required, additional cleaning necessary and equipment purchased to assist staff in working remotely. 

The council has three main types of funding. In 2018/2019 the contribution from each was:-

Income – from Charges & Rents                  £17.2m
Tax – Council Tax & Business Rates            £16.2m  
Other – Grants, Reserves, Bank Interest      £3.7m
Total                                                              £37.1m

In a normal year the largest part of the Council’s funding is income from charges, e.g. motorists pay to park in a council car park and businesses pay rent on Council-owned properties.  

The report forecasts that the Council will lose £6.7m of funding from income in the 2019/2020 financial year. That reduction in income is 18% of the funding and expenditure that the council had planned.  

The income reduction is caused by lockdown closures. For example there was no income from parking charges and the leisure centre was closed. Businesses in council owned properties also faced lockdown disruption and are unable to meet their full rent obligations. 

The government has provided the council with extra money to help meet the costs of pandemic related activity. But it is not clear that the government is going to assist the council in the important matter of its loss of income. The Deputy Chief Executive’s report notes that “The Secretary of State having initially given assurances that all financial strain of councils will be met by the Government, it is increasingly clear now that it is expected that Districts and Boroughs will have to manage/absorb their loss of income.”

The report also notes “that it is widely acknowledged that the impact of this pandemic is not going to be for just  3 months or until the lockdown is lifted but likely to go on for at least 6 months or even longer and it is unlikely to return to anywhere “normal”.  This will undoubtedly create a structural hole in our finances forever”.

The financial future for the council will depend on how quickly or how slowly the local economy recovers from the pandemic shock. The council faces financial uncertainty on many fronts. These include to what extent income from charges and rents recovers and how well the funding from council tax and business rates returns to normal compared with previous years.  

 

Vicki Macleod for Weybridge in the Surrey Elections 4th May 2017

On Thursday 4th May, you have a  chance to elect a new councillor to represent Weybridge on Surrey County Council.

Your local Liberal Democrat candidate is long term Weybridge resident Vicki Macleod.

You may know Vicki from her work in our local community, perhaps from her five years chairing the Friends of The Weybridge Centre charity. or as a school governor.

Vicki‘s priority is to give Weybridge a stronger voice for better delivery of the services local people need, including:

  • Better maintained and safer local roads and pavements
  • Local school places for Weybridge children
  • Responsible budget management by Surrey County Council

Many people see Surrey County Council as remote and inefficient with its history of mismanagement. Vicki will work with other councillors to put pressure on the administration for more effective financial management and for budgets that reflect local needs.  Her longer term aim is to see some of the services currently run by Surrey brought into local Elmbridge control.

Read more at elmbridgelibdems.org.uk

 

Who gets our taxes?

We pay £45.50 everyday in taxes, on average, here in Elmbridge – that’s for every man, woman and child living in the borough.

We pay Elmbridge 34p a day, Surrey £2.48 a day, Britain £42.15 a day and Europe 55p a day.
Tax Pie Chart-01

Because, on average, we in Elmbridge are richer than the average person in Surrey we contribute more than other residents of Surrey – we are net contributors.

Again, because we are richer, on average, than most people living in Britain will pay more per person to Westminster than the rest of Britain – we are net contributors.  It is as if the average family in Elmbridge writes a cheque to an average family in Fermanagh for around £1,500 a year.

Finally, because, on average, we in Elmbridge are richer than than most people in Europe we pay more per person to Brussels than the rest of Europe – we are contributors.  It is as if the average family in Elmbridge writes a cheque to an average family in Estonia of £23 a year.

Via government transfers, families in Elmbridge have been paying families in Fermanagh £1,500 a year for decades and no-one raises an eyebrow.  Has anyone said “we want our money back” to the people of Northern Ireland?  We give, say, £23 a year to families in Estonia and Brexiters go ballistic.  The Estonians sang their way to independence from the Soviet Union and they are on the front line with Russia.  The Estonians are a hard work people and the speed with which Estonia is growing, with our help, out of their Soviet Union legacy is remarkable.  They’ll soon be supporting us.

The 55p a day that each of us in Elmbridge pays, on average, to Europe is a remarkably small insurance premium for our security and well-being.

Chancellor forces sell-offs

monopoly_housesNational governments often claim that they support local democracy.  However the evidence is otherwise.

The Conservative national administration is forcing boroughs to sell off their more expensive housing stock.  This will reduce the ability and thus rein wealthy areas to pay housing association to sell of their own social housing stock.

These measures will have little impact on providing more housing.  If we want more housing where it is needed than we need to look closely at:

  • Ensuring that all places have a duty to house their own in their area. A village would have to purchase or build houses to enable anyone born in the village to live there.
  • Replacing business rates and council tax with land tax. This would end the current tax on building improvements and focus the tax on the value of the land instead.  This would bring more brownfield sites on stream quickly.
  • Removing stamp duty on house purchases. Stamp duty is a significant factor in discouraging people to move.  Removing stamp duty would encourage people to move rather than extending and thus help those further down the housing ladder.  This move would reduce the national exchequer’s revenue but the loss of this source of income could easily be compensated by reducing the capital gains exemption for domestic properties.  This would have a double desired effect of damping down house prices and encouraging people to spread their investments more widely into industry, bonds and commerce.

If locals had to provide homes for their own, the number of houses on offer would begin to suit the local demographic without having to change the planning laws and/or the national administration poking its nose into areas where it is not wanted or needed.

More housing control from Westminster

Housing benefitsNational governments often claim that they support local democracy; however, the evidence is often otherwise.

Take housing benefit – part of the £12bn in welfare savings is to be made by the national government instructing boroughs to reduce their rents.  This will save the national government £1.4bn in housing benefit by reducing rents paid to social landlords.  The Institute of Fiscal Studies estimates that this will mean a loss of £2.5bn to boroughs which could be made available for new housing.  Overall government loses out but the centre gains and localities lose.

This measure will have the net effect of reducing the provision of housing.  If we want more housing where it is needed than we need to look closely at:

  • Ensuring that all places have a duty to house their own in their area. A village would have to build houses to enable anyone born in the village to live there – a town likewise.
  • Replacing business rates and council tax with land tax. This would end the tax on improvements and focus the tax on the value of the land instead.
  • Removing stamp duty on house purchases and fund this change by reducing the capital gains exemption for domestic properties. This would allow people to move house more frequently and encourage people to spread their investments to the betterment of the economy.

If locals had to provide homes for their own the number of houses would increase without having to change the planning laws and/or the national government poking its nose into areas where it is not wanted or needed.

Tories slash Surrey education funding by £250 million

HeathsideConservatives will cut the education budget by £253 million in Surrey by 2020 if they were in national government on their own, official research shows.

The Tories would be forced to slash local spending on schools,colleges, and nurseries to keep pace with George Osborne’s plan to drastically reduce spending.

The research, based on official House of Commons library figures, shows schools will bear the brunt of Conservative cuts but childcare, college and early years budgets would also be hit hard.

Unlike both Labour and the Conservatives, the Liberal Democrats are committed to protecting cradle to college education spending.

Surrey Allowance Increases

money-43Cllr Hazel Watson, Leader of the Surrey Liberal Democrats wrote to the Secretary of State asking him to investigate the excessive increases (from £27,000 pa to £43,000 pa) in councillor allowances and the excessive number of special responsibility allowances pushed through by Surrey’s Conservative administration. She also asked him to check whether the national government’s own regulations had been followed by the Surrey administration.

Cllr Watson said : “I am delighted with the response I have received from Brandon Lewis, Parliamentary Under Secretary of State to my letter. He has condemned the decisions on councillors allowances as “deeply concerning” and agrees with me that Surrey did not comply with government regulations. He has stated that the national government expects those in public life to show restraint and to set levels of allowances for councillors and remuneration for officers which reflect the pressure on budgets and the need to pay off the deficit left by the last national administration. I totally agree with his comments.

“Given the national government’s clear condemnation of the decisions and also the outrage expressed by the Surrey people who have to foot the bill, I am again calling on Surrey’s Conservative administration to overturn their decisions on councillors allowances and replace them with something much more reasonable.

“Surrey’s Conservative administration is living in cloud cuckoo land if they think that they can get away with these outrageous councillor allowances. It is time for them to back down and admit they made a massive mistake to the detriment of the Surrey people.”

To read the letters to and from the national ministers click here.

New Mayor for Elmbridge

Homestart website

Following his election as Mayor of Elmbridge at the annual meeting of the borough’s council on Wednesday, 4 June, Councillor Barry Fairbank has chosen to support Home-Start Elmbridge during his Mayoral Year.

 

 

Cllr Fairbank, erstwhile leader of the Liberal Democrats at the borough,  represents Long Ditton but now lives in Weybridge.

Councillor Fairbank has been involved with Home-Start Elmbridge for several years and wanted to offer more support with his fundraising during his Mayoral year.

One of the aims of the fundraising for his mayoral year is to be able to train more volunteers to give their help and support to the many families, with a child under five, experiencing difficulties.

In an ideal world Home-Start Elmbridge wouldn’t be needed. But for many parents the pressures of family life are simply too much to cope with alone. There are so many reasons for this including; poverty, illness, family breakdowns and parental isolation.  And this is where Home-Start steps in… by recruiting and training local parent volunteers to offer emotional and practical support to families in their own homes. Home-Start volunteers provide vital early intervention support, often stopping a family from reaching crisis point. Life is getting tougher for many families, and the demand for Home-Start support is at an all-time high.

I think that Cllr Fairbanks choice of charity is excellent and you can donate here on-line. Remember ever little helps.  If you are an income taxpayer then you can even make the national government chip in too.

 

National Coalition offers 4.5% Extra School funding for Surrey

ClassroomSurrey Liberal Democrats have warmly welcomed proposals which will see Surrey receive nearly £25 million more in school funding than under the current system. This comes as part of an extra £350million boost to schools in the least fairly funded areas in the country.

The proposals announced in parliament by Liberal Democrat Education Minister David Laws will mean that funding will be allocated to local areas on the basis of the actual characteristics of their pupils and schools, rather than simply on the basis of historic levels of spending.

The proposed changes mean that, on average, schools in Surrey will receive £4,282 per pupil next year, an increase of around 4.5%.

Commenting on the announcement, Cllr Stella Lallement, the Liberal Democrat Education Spokesperson on Surrey County council said: “This is fantastic news for Surrey children and is a much needed reform. The school funding system inherited by the coalition was unfair. Labour knew it was unfair, but chose not to act.

“For too long, school funding has been based on historical data that no longer reflects pupils’ needs. Similar schools just miles apart can be funded at very different levels, just because they happen to be in different local authority areas.

“This announcement, along with the pupil premium, will mean that our children can get the education they deserve. It is more evidence that the Liberal Democrats in government are actively implementing policies to build a fairer society.”