Financial tightrope: the balancing act

OLDHAM COUNCIL: The Local Authority must find £24 million in savings from its budget for 2012/3 budget
OLDHAM COUNCIL: The Local Authority must find £24 million in savings from its budget for 2012/3

A COUNCIL budget should reflect the values and priorities of your residents.

That’s a good starting point, but it doesn’t make the task any easier.

In recent days we’ve been putting the final touches on proposals to find £24m in savings from the 2012/3 settlement, and I’m the first to admit that it is a struggle.

Finding savings on that scale is demanding and I don’t kid myself it’s going to get any easier.

In an ideal world we wouldn’t be making some of the tough proposals that we are – but there simply is no hiding from them.

I’m also mindful of my responsibilities as Council Leader to produce a balanced budget. If we don’t, the Government will intervene and take decisions for us – and in a manner unlikely to take account of local sensitivities – so we must press on.

Around £70 million has already been taken out of Oldham Council’s budget in the last two years and the process gets harder each time.

This year has been the most difficult to date and the next couple of years will just be even harder. There are no easy options left.

We must simply try to do the best that we can to stay true to our priorities and values in what we choose.

Rather than just salami slicing the budget – i.e. telling each area to shave the same amount from each of their services – we’re trying be holistic.

That means reviewing absolutely everything the Council does and changing the way that it does business, but it’s a lengthy process.

There is, for example, a lot of joint-working across AGMA authorities to find savings from economies of scale. If done properly these will deliver significant savings in the long run.

But dealing with nine other authorities is complex. It requires detailed planning and negotiations, and won’t happen overnight.

We’re also looking at all our contracts and procurement but – again – unravelling existing arrangements cannot happen quickly and we’re also mindful that rushing the process could mean your final savings are potentially much smaller and important opportunities are lost.

The financial climate has changed beyond all recognition and we’re going to have to be extremely creative in how balancing budgets and yet still ‘pump-priming’ to translate our ambitions to be a Co-operative Council so that it genuinely enables residents to help themselves do more in their areas, makes resources available to communities – and businesses – and properly supports those people who want to do more.

Even in the national days of comparative ‘milk and honey’ of the previous decade Oldham’s economy failed to achieve significant growth.

Now that the days of grant funding and big European cheques are well and truly gone the only body able to take up the cudgel of regeneration is Oldham Council.

We can’t do it alone, of course. We need to act alongside local businesses and partners to find mutually-beneficial schemes and purpose, but fundamentally that’s why we’re reserving some budget funding to help big projects get started.

I make no apologies for that because if your focus is narrowly obsessed with just balancing a budget then you offer little – if any – hope for the future.

Last week we took our budget plans to a cross-party scrutiny panel and they came back with no single recommendation for change.

The most contentious of the proposals was to revise Council staff terms and conditions of employment. This has been developed through our ongoing budget consultation with employees and Trade Unions.

We’re proud of the positive dialogue we’re having with them and the reason for looking at Ts and Cs – and, for example, whether we should end sick pay for the first three days – is straightforward.

Staff themselves told us that if this is the alternative to making further job cuts then it must be considered. 

At that cross-party meeting I was quizzed about the hypothetical process ahead if employees rejected the changes to their Ts and Cs. The answer I gave – that you would need to dismiss and re-engage staff – was completely theoretical. At no point did I say that this is what we intend to do.

Politicians try to pre-empt what people will think and want, but it’s not an easy science.

In these budget proposals there are measures which I openly admit to being nervous about.

But for this to be a genuine consultation we must include measures like this – which may be unpalatable to some – at the earliest possible stage. If we didn’t do that, the process would neither be honest nor fair.

We’ll continue to face similar challenges in the coming years and I’m not prepared to hide budget options and then sneak them through a back door at the eleventh hour. That’s not my style.

Staff at the Council have already been through difficult enough times and I want to continue engaging by being able to look them squarely in the eyes.

Thanks for listening,

Jim

2 thoughts on “Financial tightrope: the balancing act

  1. Independent Councillor Ken Hulme

    A very tough task – I know as a senior Cllr I had to do a similar job in the 1980’s in the London Borough of Camden. Intelligent approach I think and I wish you well. In the present economic climate with this government’s barmy approach to public services and running the economy I just don’t think any serious regeneration is possible by OMBC on its own.

    Hunker down, get the basic services right with better value for money from Unity Partnership and focus on education and young people – but even then I fear serious problems and civil unrest are not far down the line. You just can’t have over million young people out of work and facing a life of penury without much hope.

    But I’ll still keep fighting Saddleworth’s corner – especially against bad developments which might bring OMBC a few bob but ruin our villages.

  2. To quote from the BBC News website:

    “Most council’s in England are coping well so far with the tight squeeze on their budgets but some face a “rocky road” ahead, a report suggests.

    The Audit Commission said nine out of 10 councils would still balance their books despite an estimated £4.7bn fall in their combined income this year.

    But the spending watchdog said pressure would become more acute as 60% of cuts to central funding had yet to kick in.

    Ministers said “well-managed” councils could make do without key service cuts.

    But Labour has warned that local authorities have been forced to front-load spending cuts and this has resulted in the closure of vital services and big job losses.”

    It is this fear of “closure of vital services and big job losses” that is fuelling the war of words raging at the moment – paranoia ratcheted up to an unimaginable degree.

    I fear that over the next couple of years – without wishing to sound alarmist – that as the full scale/enormity of the cuts, finally kicks in, the public protests/disorder of recent months, will pale into insignificance – an unbridled anger spilling out onto the streets.

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