We are facing an unprecedented economic crisis. Unemployment is rising and the tax base has collapsed in Britain. Cuts in public expenditure are inevitable at some point. The Labour Government wants to borrow more, spend more and cut taxes. The government is still in denial as we see in the Sunday Star which reports that Lord Mandelson spent £80,000 redecorating his office.
PUBLIC SECTOR BOOM AND BUST
Government needs to wake up to the economic realities, tighten its belt and spend less. Otherwise the public sector in the UK is heading for bust. The days of spend, spend, spend are over. More than ever before this is the time for spending less and delivering more for your money.
In the USA the recession is far more advanced. In 2008 public sector jobs grew by 200,000 whilst jobs in the private sector contracted by 1,380,000. Now their public sector boom is over. Governor Schwarzenegger has just approved a budget to plug £42 billion deficit to prevent the richest state in the US from going bust. His compromise, signed a few days ago which lays off 10,000 public sector workers, gives half-baked tax rises and half-baked cuts leaving an un-tackled deficit.
In my view the recession will be worse in London because of our
dependence on banking and financial services as the engine of the
economy. In Hammersmith & Fulham the number of jobless has soared by
26% since July 2008 from 3,231 to 4,040 in January 2009. Signs of the
credit crunch affecting public sector finances are growing every day. A
recent report in the Times showed that the Government is proposing
to raid local government pension funds in order to help finance its Building Schools for the Future programme.
H&F – TIGHTEN OUR BELT
In H&F we are well placed to face ride out the storm and do not
have to take these types of panic-stricken measures. We have tightened
our belts and we will continue to do so. We have been taking tough
decisions over the last two years. We have been spending less, cutting
our costs and cutting staff numbers. For example we have reduced staff
count by 950 full time equivalent employees over the last two
years. Agency spend has tumbled from £22.7 million in 2005/6 to a
projected £19.7 million in 2008/09. Instead of borrowing more we have
cut debt by nearly £20 million, producing annual savings in borrowing
costs of around £1.7 million a year. Spending has been cut by £7
million (or 4%) in cash terms. Further spending reductions of £5
million a year can be expected by extending competitive tendering.
This year’s budget proposes a total of £12 million of savings (rather than the £61 million posted by Labour’s hfconwatch website) by cutting red tape, reducing staff numbers and office space, making better use
of IT and other cost cutting initiatives. This translates into a cut of
72 back office posts producing savings of £1.3 million in 2008/9 and we
are also cutting accommodation costs which will save a further £1.1
FREEZE ALLOWANCES & DIRECTORS’ PAY
Today is Ash Wednesday which is a day of fasting and abstinence. So I
am delighted that we have proposed to freeze both Councillors
allowances and Directors’ pay as part of the council’s ongoing
commitment to cutting costs.
COUNCIL TAX CUTS
Now Hammersmith & Fulham residents will reap the benefit. We are
proposing to cut council tax bills by 3% for the third year running.
This is an average £700 saving to the council taxpayer over 3 years
compared to if the council had continued the previous average 7.7% rate
of council tax increase. Many other authorities are following our low
tax lead and freezing council tax but the average increase for London
will still be 1.6% and some renegade authorities such as the London
Borough of Richmond are proposing to hike bills by 4.33%.
SPEND MORE WHERE IT MATTERS – QUALITY
But it is not just about cutting costs. This council is committed to
doing more for less money. This budget proposes to spend more in areas
that matter to you, including:
- Planning for £200 million of improvements for secondary schools in the borough
- Improving town centre policing by spending £1.15 million on extra bobbies in Hammersmith town centre to add to the ground-breaking 24/7 neighbourhood police pilot schemes in Fulham Broadway and Shepherds Bush Green.
- Spending £8.1 million on our parks and open spaces with major improvements planned or already happening at Shepherds Bush Green, Normand Park, South Park and Frank Banfield Park.
- Retaining and improving refuse collection. Since February 2009, refuse and recycling has been collected on the same day, followed by street cleaning, making the system as easy as possible for residents and helping the drive to make Hammersmith & Fulham a cleaner, greener borough.
The quality of our services is reflected in the fact that the Audit
Commission has awarded us the maximum of four-stars. However, what’s
more important than what the bureaucrats think is what our residents
think and I am pleased to inform you that resident satisfaction has
leapt an astonishing 11 per cent in two years.
PRACTICAL ASSISTANCE & ADVICE
We are also thinking about how the council can help people through
these difficult and uncertain economic times. We feel that the priority
must be practical assistance and advice. That is why we have brought
together many of our advice services under one roof at 145 King Street.
Instead of looking like a traditional council office, it looks more
like a bank – with play areas for kids, modern surroundings and an
altogether professional approach delivering advice on a whole range of
subjects – from housing to adult social care and children’s services.
We want to extend this to employment and welfare advice in the near
Finally let’s lay some urban myths to rest:
- We have not cut support to the voluntary sector: Grants have been reviewed and reallocated to match priorities, but not reduced in total.
- We have not increased charges excessively. Some new charges e.g.
for events in parks, utilities roadworks, pre-planning fees and penalty
notices e.g. dog fouling and littering. Our charges are typically the
lower end of the upper quartile for London.
- We passed on virtually all the VAT changes in December 2008: Only area we did not was for sports and leisure charges – cost for implementing change would have been far greater than £2,900 net temporary benefit to the council. Impact to service user is 13p for two adults to play tennis per hour and 90p for group hire of a sports pitch.
- And we have not wasted money on glossy comms. This Council combines low expenditure with high quality communications. The number of comms posts was reduced from 13 to 7. Bringing H&F News in-house saved £300,000. Market testing print services saved a further £300,000. Innovation includes our own You Tube TV channel, localised neighbourhood guides and lamp post banners produced at very low cost. Number of residents who say H&F communicates well up from 40% in 2006 to 54% in 2008 – one of the highest figures in London.
Compare the comms record of this administration with the last:
- Full colour fortnightly glossy magazine.
- Cost to council of HFM – £400,000 a year.
- HFM private advertising income was less than £5,000 a year.
- Fortnightly newspaper.
- Cost of H&F News (after advertising revenue) is £0.
- H&F News income from private advertising will be around £210,000.
This council continues to tighten its belt. This budget cuts costs,
cuts debt, cuts waste and cuts taxes rather than cuts services. This
budget delivers better council services for less money. We are working
hard to do more with less money. This is a great budget and I hope that it has the wholehearted support of all councillors.