Today Westminster’s Cabinet will confirm our intention to freeze our council tax for a record fifth year in a row, whilst at the same time responding to the concerns of our residents by putting an additional £2 million back in to street cleansing for the coming year.
We’re doing this at a time when the forecasters are predicting five years of no growth in public spending on top of a necessary, but tough 27% reduction in council funding over four years. But it is possible to improve services while not increasing taxation.
Westminster success in managing the balance between tax and spending comes down to four things; a focus on daily efficiency; clear priorities; innovation in delivery and political courage.
First, and this is a lesson I learnt from Eddie Lister of Wandsworth, the drive for efficiency has to be a relentless pursuit. People will also push new ideas for spending, some valid, some not. Salaries can and will inflate, advisors will highlight the benefits of new spending. Unless you pursue savings by looking afresh at budgets, keeping the corporate core to a minimum and welcoming the transparency that putting pay and spending online offers, you’ll soon end up with a bloated local state. We have impressed upon staff the need to “spend it like it’s yours” and set out clear rules on what’s acceptable and frozen recruitment. All these measures focused minds and squeezed additional value out of spending.
Second, you need to take a hard look at your priorities. Two years ago we, as a council we could have taken the easy option and seek to raise council taxes for our residents, adding to the cost of living pressures they were already grappling with. Or, we could set about taking the hard decisions to find savings within the organisation and develop new and innovative ways to deliver our services more cost effectively.
We chose not to shy away from our responsibility to our residents. A leading group of officers and councillors set about prioritising our spending across all portfolios and looked in every nook and cranny of the organisation to see whether certain services were still required or delivered more efficiently, we started commissioning for outcomes rather than just budgeting for services, which has proved successful.
Third, we demanded a new approach from the big spenders in adults and children’s services, two thirds of our budget. Initially we were told that any cuts to these social services would lead to the deaths of vulnerable people. We resisted this lobbying. We took the decision to share services with our neighbours, reducing three sets of management teams to one. We challenged the orthodoxy on adult service provision, arguing that spending less, but giving the recipient control of the money, would enable people to live better lives because they make the decisions. Personalised budgets are popular and reducing costs while the Tri Borough project will save £33m a year by 2015.
Both these decisions delivered significant savings, but more importantly enabled us to retain the quality of services.
Finally, remember it’s politically astute to be brave. Our near neighbours in Hammersmith led by Stephen Greenhalgh have shown how cost cutting and tax cutting can deliver public approval, better services and electoral success.
That’s not to say that we haven’t cut things, because we have, but these reductions have been in lower priority areas. Nearly 80 per cent of the cuts have come from the back office. In 2011/12 alone we will have delivered £60 million in savings and next year we are confident our approach will see us find a further £23 million.
At the end of this process we have a balanced budget, increasing reserves, clarity on spending plans and can afford not to increase our council tax. And, in case you were wondering we’re forecasting a reduction in income from parking.
Too often local government thinks about spending in terms of ‘cuts’ and the need to ‘maintain services’ by taxing more. Anyone can maintain a certain level of provision by increasing taxation, the real skill is to improve services while stabilising the amount we take from people who work hard and need to use every penny carefully when the price of living is increasing. Local government shouldn’t add to their burden.
I am proud of the fact that we have continued to prioritise essential services and benefits for those most in need, whilst ensuring resources and finances are deployed efficiently.
And as a politician, I know that this determination to do better with less is welcomed and respected by the people we serve. The evidence that we treat their money like our own underpins our authority to government our communities.