Moving money around

Fifty here, fifty there; sooner or later it'll be real money

As councils prepare their budget savings for the year ahead they are often forced to do some quite ridiculous things in order to meet their savings targets.

I was put onto this topic by the excellent Richard Taylor who writes an extremely detailed blog looking at the detail of decisions made by Cambridge Council and other public bodies. In this particular piece he was commenting on the local leisure contract being awarded by the council. This particular contract was delivering savings of £500,000; all of which were coming from the fact that the outsourced company had charitable status and could therefore claim an exemption on local business rates.

As Richard pointed out:

It is obvious to me that we need to elect MPs who will exempt local councils from paying rates on swimming pools and libraries. It’s bonkers that when such facilities are run by councils they have to pay rates, but if run by others they can be rate free.

This surely that can’t be right. The company aren’t doing anything different to that which the council could do; the only difference is that they get an exemption on a tax which eventually comes back to the council in its funding.

The change being made is not making a real benefit to the overall health of the nation’s finances. The £500,000 saving is simply a £500,000 reduction in money being spent by local government and received by local government.

And yet local councils up and down the land are considering making similar changes as it helps them protect their bottom line. Apparently, even the Government’s proposed reforms of NNDR do not address these issues.

I had a bit of a rant about this being ridiculous in the office and was met with a number of raised eyebrows. Apparently, this is all too common.

That was the local government week that was

Same picture; different stories

It’s a bumper crop of local government blogging and other news this week so without further ado:

One of our favourite blogs is flip chart fairy tales and this week’s discussion of local government cuts, and the ‘great local government fire sale’ that is accompanying them, was particularly accurately put. As the author (Rick) points out:

Councils desperate to get costly services off their books may well grasp at such offers without thinking too hard about the longer-term implications. In some areas, smaller firms and social enterprises might not even get a look in.

This is the sort of thing that happens in all distressed organisations. Companies that are facing bankruptcy tend to slash and burn in a breathless struggle to dump their costlier activities. Sudden and drastic budget cuts will have the same effect on local authorities.

The ever excellent Simon Parker has written a helpful post about the Public Account Committee’s report on local government finance. As he says:

Reviewing the formulas is necessary but not sufficient. The problem with changing the rules is that it redistributes money: some councils get more and others get less. That requires a government with the political guts to shift funding around the system. And that is where things get tricky.

He’s not wrong and as he mentions later on it’s going to take real courage from central Government to do something about it.

Liberal Anonymity

So remind me; who are you again?

This blog is not necessarily one that takes a great amount of notice of the internal workings of our country’s political parties. However, as I listened to my daily dose of John Humphries and his Crazy crew this morning I heard that one of today’s ‘highlights’ at the conference would be a speech by the Liberal Democrat Local Government Minister Andrew Stunnell.

Unfortunately, I have to work during the day so caught up with his speech in the written form yesterday evening (you can do so too).

So where to begin?

Well, Mr Stunnell started with a joke and although it takes some explaining I assume everyone in the conference hall got it. Speaking about the coalition negotiations he said:

Newspapers full of the back stories of the four-man Liberal Democrat negotiation team of Danny Alexander, Chris Huhne and David Laws.

I’m not bitter.

Honest.

The Guardian wouldn’t have spelt my name right anyway.

Funnily enough I can empathise with the Guardian on this one. We’ve written between five and ten posts about the DCLG over the past 18 months and do you know how many of them have involved Mr Stunnell? Well, the answer is none. Reading the rest of his speech I couldn’t work out whether this was a good thing or a bad thing.

Was it good that the Liberal Democrats only Minister in the DCLG had kept his head down and not joined in the Eric Pickles inspired local government baiting?

Or was it a sign of Liberal Democrat ineffectiveness that despite being in Government nothing changed?