Combatting cuts: Invest to grow

SPOTLIGHT: Explaining Oldham Council's 'Invest to Grow' strategy to the Financial Times this week at Gallery Oldham.
SPOTLIGHT: Explaining Oldham Council’s ‘Invest to Grow’ strategy to journalists from the Financial Times this week at Gallery Oldham.

IN LOCAL government circles the end of February always heralds the arrival of the ‘small’ tome that is the paperwork for your annual budget-setting meeting.

This means you’re finally nearing the end of a process stretching back several months and characterised by many hours of head scratching and heart searching.

Cabinet agreed our final proposals for 2015/6 on Monday and these now go forward to the annual budget-setting Full Council meeting on Wednesday, February 25 (6pm onwards) which – as ever – you can watch online via the Oldham Council website.

The dominant factor in this task for the past six years now has been balancing books in the face of significant funding reductions and rising demand – and that means there is no sense of relief as we look ahead.

I’m sorry to say this will be the same challenge next year – and in future years – which really makes you pause for thought where this may all end up.

We’ve already seen £141million removed from Oldham Council’s budget in the past five years which is equivalent to £1,566 less per household. With an extra £60m in savings to be made by 2017 that will bring the total reduction to £201m – that’s £2,232 less to spend per household.

As a local authority we’ve suffered more than most here in Oldham and I’m clear the cuts cannot carry on.

BudgetInfog1

This is not about a principled view about deficit reduction – or continuing the blame game – the issues are now about basic public service management.

Soon there simply won’t be enough money to deliver the services that are there to respond to community demand. And when I say that I’m not just talking about the things that people ‘want’, I’m talking about things that society genuinely ‘needs’.

Public sector spending has already borne the brunt of government reductions and – with the NHS and schools being protected in terms of future funding – huge pressure is again likely to fall on local government.

And even as I write there’s yet more evidence as to how widespread concerns about this are becoming.

The Independent Commission on Local Government Finance – whose members are economists, business, finance and public service experts – says today that councils are on a ‘cliff-edge’ which means everyday services “may not be there much longer” and that “urgent devolution of powers, funding and taxes” is needed.

This comes just days after the House of Commons’ own Public Accounts Committee (PAC) published some stark findings about the financial sustainability of local authorities like ours.

They found that local services are becoming unviable and the reductions to funding are hitting the poorest areas the hardest.

The PAC report says the Department for Communities and Local Government is simply not prepared for the impact of shunting cost pressures onto other services, like the NHS, and is failing to take responsibility for the very real threats to the validity of some statutory services. And this is not a political viewpoint by the way: the PAC membership is cross-party.

The question for Oldham Council is what are we going to do about this?

How can we find the funding needed to meet our legal responsibilities and provide the services you will need in future years?

Firstly, despite the financial pressures, we know that asking local households to stump up more money isn’t realistic. Many residents are facing similar budget issues and we can’t ignore that, which is why we’re proposing to freeze the amount of Council Tax you pay for our services over the next year.

Secondly, we are trying to transform the council’s ‘fiscal base’. That basically means we need to change the sources of where our future income comes from.

We do at least have an enviable record of managing our finances here in Oldham and much work has already been ongoing to address this fiscal challenge.

Essentially we know it means us needing to work even harder and faster to make Oldham a better place to live, work and do business. It makes our regeneration programme – projects like the Old Town Hall cinema, the new Prince’s Gate at Oldham Mumps, the Independent Quarter, and new housing schemes across the borough – even more vital.

Schemes like this will not only help to attract new money and jobs but will also support the delivery of your local services in the future by increasing the amount of business rates and council tax we will collect.  BudgetInfog2

Our work also includes a whole host of other measures across all our activity like our social value framework – designed to ensure we maximise the benefit to the local economy of every penny we spend – plus work to rewire services, examine different delivery models, and early intervention and preventative work to reduce demand for services.

When you’re on the verge of a financial tipping point like this you know even more challenging times lie ahead. Difficult decisions cannot – and must not – be avoided and we are often left as ‘arbiters in chief’ of a ‘Catch 22’ situation.

Nonetheless we are determined to stick to our core pledge to the people of Oldham.

We will not simply accept decline for the borough and just focus on implementing reduced budgets that we know will inevitably adversely affect communities.

Only by investing in growth do we know we can give ourselves a fighting chance of bringing in new income and opportunities that will give us hope for the future.

Let’s be very clear though that this approach is no silver bullet.

It won’t address the very real problems that are still hurtling down the track at local authorities unless fair funding is provided in the future.

So whichever party – or parties – form the next government after the General Election on May 7, my message to them all will be the same: this needs sorting.

Thanks for listening,

Jim

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