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Mark_wallace
In his first post for this site Mark Wallace of the Taxpayers Alliance looks back at a tumultous fortnight for local government – and exposes a £322,565 PR bill by Lambeth Council to relaunch their Council housing.

It would
be a vast understatement to say the last couple of weeks have been a
turbulent time in the local government finance debate. What with the
news breaking of potentially massive losses for council taxpayers in
the Icelandic bank fiasco, it seems an age ago that George Osborne
laid out his proposals for a freeze in council tax in his speech in
Birmingham.

The two
issues – the Osborne tax freeze and the Icelandic bank disaster
– are not unrelated. In fact, both have shone a spotlight on
that crucial question: how can councils save money?

Osborne’s
proposals combine large savings in Whitehall and restraint in
spending at Town Hall level, and offer the prospect of at least some
welcome relief from the continual rise in council tax. Obviously, a
tax cut would be even better but a freeze is still far preferable to
the recent interminable series of rises that have been the main
feature of most councils’ tax policies for years. Finally a
politician has openly recognised that local authority savings can be
made.

Sadly,
sixteen
London Boroughs
and a scattering of other authorities
across the country immediately came out against the proposal, saying
spending restraint was impossible. It was an unedifying display of
the lack of initiative and kneejerk big government attitude that
still infests so many council chambers, to the detriment of
taxpayers.

In
reality, there is clearly flab in council budgets that can be trimmed
to provide a tax freeze or even cuts. For example, Lambeth is opposed
to the Osborne proposals. The TPA’s
research
, though, reveals that they spend £1.3
million a year on publicity alone, while the
number of staff
earning £50,000 or more has
risen from 16 to 275 in the last ten years, boosting the middle
management wage bill from £1.1 million to £18.1 million
in a decade. In the council meeting on Wednesday it
was revealed
that the bill for PR consultants for the
launch of the organisation in charge of the council’s housing
stock was a whopping £322,565.

Osborne’s
proposals are an opportunity to get a cultural change in councils
that could get into the habit of making savings. They will encourage
the public, the media, councillors and council staff, and a lot more
waste will come to light.

Of course,
some councils may not want to look for savings – due to
ideology, partisan opposition or sheer defeatism. Whereas a week ago
that was perhaps an option for some, the Icelandic fiasco now means
that like it or not, some councils are going to have to look for
savings pretty damn quick.

Make no
mistake – the loss of hundreds of millions of pounds of taxpayers’
money in the collapse of Iceland’s bank is not a good thing.
Far from it, it is a disgrace that your money and mine has been
unwisely risked without our permission and lost as a result. They
have played fast and loose with our money and have ignored clear
warnings that Icelandic banks were not on a sound footing. The
Finance Directors responsible should be sacked – and we will be
watching closely whether any of them get bonuses this year.

This
shocking loss may, however, shine a welcome light into some dark
corners of Town Hall accounts. For those councils who have lost money
destined for service provision, there is now a very real and pressing
motive to find savings and cut unnecessary spending.

Taxpayers
and the wider economy cannot sustain an increase in council tax, and
the LGA’s call for “Government money” to plug the
gap draws a false distinction between local taxpayers and the people
who provide central funds. A payment from central Government would
fall on the shoulders of local taxpayers, too, and is therefore just
as unacceptable.

For that
reason, savings must be made – and I am certain that if they
are open-minded about ditching fringe activities, every council will
be able to make them. The money paid to financial consultants who
have messed up so badly with the Icelandic banks would seem a primary
candidate to start with.

Whether
councils identify savings voluntarily under their own steam, are
given an incentive to do so under Osborne’s proposals or are
compelled to by losses incurred in the Icelandic bank collapse, it is
important that those savings are publicised to other councils so they
can follow suit. Of course, in the new age of austerity it cannot be
emphasised enough how such information should be shared –
lavish conferences are emphatically out, and blogs like this
one are the obvious replacement.

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