Blog 2nd January 2018

Jan 2nd 2018, 21:16

Blog 2nd January 2018

I hope that readers of my blog have had a Merry Christmas and will have a Happy and Successful New Year.

In this week’s blog, I refer to: the Scottish Budget, Cumbria County Council’s budget consultation, house values, Churchill & ‘Brexit’ and AWICS seminars in 2018.

The Scottish Government’s Budget for 2018/19 was announced by Derek Mackay, Finance Secretary on 14th December 2017. This draft Scottish Budget is significant for several reasons:

  • It is part of an evolving budgetary process that has seen the date of the budget shifted this year and that will see the introduction of a new annual budgetary process for 2019/20.
  • It is the first time that the Scottish Government has used its tax varying powers and it has used them to introduce a more progressive system of direct taxation and to increase its revenue.
  • The use of tax varying powers has created a direct link for the first time between the tax that people pay and the expenditure of the Scottish Government.
  • While the Scottish Government has ‘headlined’ its intention to protect National Health Service budgets, in practice the increased provision for the National Health Service may prove to be modest when compared with increased needs and service pressures.
  • Increases in funding for Local Government are below the level of inflation giving rise to concern that local authorities may not be able to continue to deliver and protect good quality local government services.
  • Increases in funding for housing are significant.
  • Increases in funding for welfare are significant in relation to existing budgets but not in relation to the total amount claimed in Scotland.

I have written a briefing paper that summarises the budget and its implications for public services in Scotland and the response of the sector and to provide some commentary. To view or download your copy, please click HERE

Like most local authorities in England, Cumbria County Council is out to consultation on its draft budget for 2018/19. The deadline for responses is 8th January 2018. As I live in Cumbria I have written a response and have submitted it today. I have also prepared a web page that looks at the budget consultation.

My principal conclusions are as follows:

  • The financial management of Adult Social Care should be reviewed as it is likely that the potential for savings may have been exhausted. There is a need to ensure that the Adult Social care services that the Council provides are protected as much as possible.
  • The financial management of Children’s services should be reviewed as it is likely that the potential for savings may have been exhausted. There is a need to ensure that the Children’s services that the Council provides are protected as much as possible.
  • It is possible that the Council’s central budgets contain what accountants call ‘padding’, ‘budget slack’ or ‘over budgeting’. I think there may be a missed opportunity to allocate resources to front-line services I would therefore suggest that central budgets are reviewed to ensure that they are set at an appropriate level in future.
  • The timeliness of budget monitoring reports should be considered including the possibility of making reports within a month of the quarter end so that if any decisions are required they can be taken promptly.
  • It is stated that a programme of service reviews will be planned on a rolling basis throughout the Council and this would appear to me to be a good approach. This approach was adopted successfully by Impact Housing Association when I was Chair. I would suggest that the approach to this should be to focus all resources on delivery of services to service-users, to adopt a ‘bottom-up’ rather than a ‘top-down’ approach and to reduce layers of management.
  • It may be worthwhile considering whether it would be appropriate to make further reductions in earmarked reserves in 2018/19.
  • Aspects of the Capital Programme that should be reviewed include project management, government grants and other contributions, prudential borrowing, capital receipts and asset management.
  • Aspects of Risk Management that should be considered include inflation and Treasury Management.
  • Following the announcement of the Local Government Finance settlement for 2018/19 in December 2017, the Council should take advantage of the opportunity to increase Council Tax by 3% rather than 2% without holding a referendum (see above).
  • The Council should also consider holding a referendum on the option of increasing Council Tax to the level that would be required to fund Adult Social Care, Children’s services and other services adequately. I would vote in favour of such a proposal.
  • The Council has received adverse local government finance settlements in recent years and it is therefore important that the Council engages fully with the Fair Funding Review when appropriate to ensure that its outcome is at best beneficial for the Council and at worst no more adverse than the current position.
  • The Council should prioritise the devolution issue and should aspire to the level of devolution that has been achieved by the Scottish Government, as this is the most comprehensive model of devolution that has yet to be achieved in the United Kingdom.

To view our web page, please click HERE

To view or download a copy of my submission, please click HERE

Since my response went online I have been contacted by Cumbria County Councillors whose comments include:

  • Thank you, Adrian, that is most helpful
  • Thanks, some good points here especially on Adult Social Care

Research by the Halifax, reported in the Guardian shows that the housing market across the United Kingdom has slowed considerably during 2017 with forecasters predicting that increases could slow to a halt during 2018 amidst the ‘uncertainty’ caused by ‘Brexit’. During 2017 the largest increases in house values were recorded in Cheltenham, Bournemouth, Brighton, Crawley and Newham; while the largest reductions in house values were recorded in Perth, Stoke, Paisley, Wakefield and Rotherham. However, with real incomes falling this slow down is not expected to make homes more affordable.

Over the Christmas holidays I have been reading about the events after the Second World War that led to the foundation of the European Union and came across this interesting quote from Winston Churchill from 7th May 1947:

“Men will be proud to say: ‘I am a European’. We hope to see a Europe where men of every country will think as much of being European as belonging to their native land. We hope that wherever they are in the European continent, they will truly feel: Here I am at home.”

I am told that this quote appears on the D-Day memorial at Ouistreham in Normandy.

Our next seminars are on:

  • All You Want to Know about Service Charges in Social Housing in Wales
  • All You Want to Know about Service Charges in Social Housing in England
  • All You Want to Know about Local Authority Housing Finance
  • Funding Supported Housing

For further information or to make a booking, please click HERE.

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