Thursday, 12 February 2015

Cabinet members say innovative investment plan best way to protect services as budget recommended to Council meeting

Leading councillors have backed a bold and ambitious plan to generate income to support Council services ahead of all Government grant funding probably ending in five years time.

At a South Cambridgeshire District Council Cabinet meeting today (Thursday 12 February), senior councillors heard forecasts that all government grant received to deliver services will be cut to zero by 2020 and investing to generate a new way of working must be found.

A 31% reduction to the grant the Council receives to deliver services in 2015/16 means savings in the region of £670,000 are needed to balance the books with councillors warning further reductions to funding are to follow.

To meet the savings target next year Cabinet members backed a proposed budget that would deliver savings equivalent to £11.23 for every band D household next year and agreed that council tax would need to rise by an average of £2.45 a year to protect services.

The proposed charge for an average band D home would increase from £122.86 to £125.31 which equates to an increase of 1.99%.

A reorganisation of waste and recycling rounds at the end of last year helped reduce the efficiency savings needed for 2015/16, which are planned to be delivered through initiatives such as sharing ICT, legal and building control services with neighbouring councils as well as investing to generate an income.

Around 18 months ago the Council set up Ermine Street Housing, a Council led company to purchase homes to rent at market rates. This generates money for the Council to put straight back into core services for local people. So far £4.5 million has been spent on a portfolio of 30 properties, and if successful between £40 million and £50 million could be invested by 2020.

Over the last four years the Council has already delivered efficiency savings of around £5.5 million through cutting senior management costs, bringing its customer contact centre back in-house and changing computer systems which councillors said at the meeting meant delivering further efficiencies even tougher.

Areas of high employment and housing growth, such as South Cambridgeshire, also receive additional funding from Government known as New Homes Bonus. The Council’s budget reaffirms this will be invested in projects to help manage the delivery of growth through the Greater Cambridge City Deal, increase the number of affordable homes and provide a local contribution towards the A14 upgrade.

The Cabinet’s recommendation will now be considered by all councillors at a Council meeting on Thursday 26 February.

The Council’s total budget for 2015/16 is £16 million with a further £29 million ring fenced for providing affordable housing services.

The proposed annual Council tax charge for a band D home in 2015/16 will be £125.31, retaining South Cambridgeshire District Council’s position as one of the lowest charging in the country.

Cllr Simon Edwards, South Cambridgeshire District Council’s deputy leader and cabinet member for finance, said: “Continued reductions to funding means we must be bold and innovative as this is the only way we will be able to continue to provide the best services possible to our residents and businesses. By setting up our housing company around 18 months ago we are already ahead of the game in having a way to generate income that will support the services people need. We will assess the pilot project later this year and aim to invest much more heavily to plug the gap less funding from government will leave now and in the future.

“Of course no one ever wants to put up council tax if at all possible, and we are really proud our charge is one of the lowest in the country, but a freeze this year would store up problems for the future when we would have to either look at a sharper rise or stop doing things people have told us are priorities. There is no doubt our success in delivering savings in the past means we face a tough task to find more savings but remain committed to finding innovative solutions to make sure we retain the quality of services.”

Savings required per average band D home are £13.68. Savings met through £11.23 of Council efficiency savings and a £2.45 rise in council tax.