Cambridge City budget proposals for 2016 – securing the long term future

Revenue from assets, a healthy reserve, Cambridge City is in many ways more fortunate than other councils.

cambridge17:38 Wednesday 6th January 2016
BBC Radio Cambridgeshire

CHRIS MANN: Cambridge City Council’s ruling Labour group has just published its Budget proposals for 2016, and hot off the presses actually. They sent out the press release at barely four thirty. Joining me now is councillor George Owers, who is the Executive Councillor for Finance and Resources. Also councillor for Coleridge ward. George, evening to you.
GEORGE OWERS: Good evening.
CHRIS MANN: So some of the highlights you’ve put in this, street lighting funding will continue, the Shopmobility is going to continue. I know you’re putting some money into tackling homelessness and an anti-poverty strategy, and you want to help people like the Citizens’ Advice Bureau. For you, what’s the most important thing?
GEORGE OWERS: Well I think the most important thing is actually securing .. although all of those things are indeed important, I think perhaps the most important thing is securing the long-term financial future of the Council overall, and making sure that we have the resources going on in the future, and we are in a position where we don’t have to make drastic cuts to frontline services. And I think that we’ve done that partly in last year’s Budget, and we’re continuing that work in this year’s Budget. Because I think that what we’re doing amongst other things is things like we had a review last year of our reserves, and last year and this year we are putting some of that money that we found that has been stashed away earning quite low interest rates, and we’re now investing that in the future. We’re investing it in things like our office accommodation strategy, which will allow us to reduce the amount of building space we use, which will make savings in the future.
CHRIS MANN: OK. Before you move on let’s just talk about that. The general reserves, I think they were about £11 million weren’t they? And you’re investing, what, just short of £4 million of that. Into what exactly?

The reason homelessness is going up is because of really stinging cuts to the welfare state and all kinds of other cuts to services that have been forced us upon by the central government.

GEORGE OWERS: Well a range of things. So we’re currently conducting a business trans .. what we call a business transformation programme, which is essentially an attempt to change the way that we deliver services. So for example we’re currently going towards a lot of shared services in areas like Planning, in Legal and other things, which allows us to deliver .. to continue to deliver a really good service, but obviously with greater efficiencies, because we’re sharing these services with South Cambs and other authorities …
GEORGE OWERS: .. and those kind of things, and the office accommodation strategy costs money. We have to invest money in the short term to make the savings in the long term.
CHRIS MANN: OK. The general reserves, was there too much in there? You say you sort of found it. It’s almost like you stumbled upon in a cupboard somewhere. Obviously general reserves are there in case there’s a rainy day so to speak. But do you think there was too much stashed away?
GEORGE OWERS: OK. Well there are two issues there. First of all there’s what we call general reserves. We do a very careful calculation every year to determine what the really ultra-safe level for us to maintain, and general reserves is. And the current calculation is £6.16 million. And we actually had .. from last year we had over £11 million. Right? So clearly reducing those general reserves to some degree would still leave us in a very safe position. The reason for that is linked to the fact that when we took control last year we did a fundamental review of what is called earmarked reserves, which are reserves that were kept for some specific purpose, and we found that in many cases they’d been (unclear) very very cautiously and in my view over-provisioned. So what we’ve done is release some of those funds.
CHRIS MANN: OK. Well if there’s all this money there then why are you putting up council tax by 2%? Why put it up at all? If you’ve got extra money why are you putting the burden onto the taxpayers?
GEORGE OWERS: Well the first thing I’d say is the increase on council tax is a relatively small one. Just under 2%, which for somebody in the average Band D property will only be an extra £3.50 a year. But in addition why are we putting council tax up? The reason is that a lot of the money we have is one-off money. It’s money that can only be spent once. And many of the cuts that we have to make because of the reducing grant we’re getting from the Government are ongoing. So they are things that have to be paid for every year, or rather money that we don’t have every year. So we can’t use one-off money in order to fund that, because it runs out. It would run out very quickly if we took that approach. So in order to be safe we have to make sure that we maintain our long term council tax base, which is necessary in order to make sure that we have a really sustainable future, and we won’t be forced to make huge cuts to services.
CHRIS MANN: OK. I know that you don’t have power over everything that happens in Cambridge city, but I’m sure if you asked residents what the big issues were for them, it would be the traffic, it would be the cost of parking, I’m sure pollution would be up there as well, and the problem of the increasing numbers it appears of homeless people on our streets.
GEORGE OWERS: Well I agree with all that. We are addressing a number of those issues in this budget. First of all, in terms of traffic and transport, our budget includes and has included for a number of years, provision to make quite substantial contributions to the City Deal. We don’t control that solely. The County Council ..
CHRIS MANN: If it ever happens of course.
GEORGE OWERS: Yes well I’m not going to get into the ins and outs of the CityDeal.
CHRIS MANN: No we’re not.
GEORGE OWERS: That’s a separate issue. So there’s that. In terms of homelessness, if homelessness is going up, the reason homelessness is going up is because of really stinging cuts to the welfare state and all kinds of other cuts to services that have been forced upon us by the central government, which is why we’re appointing a new homelessness adviser in this budget, in order to process homeless claims more quickly, and hopefully in order to reduce the number of homeless people who have to do things like go into B&B. But obviously we don’t have control. Homelessness will go up because of changes that the central government will make. So that’s one thing. I can’t remember the other issues you mentioned.
CHRIS MANN: Well the car parking charges? I know not all of that is yours, but people do feel that in some of the car parks in Cambridge they’re pretty hefty. Now what are you going to do about that?
GEORGE OWERS: Well we’re freezing the car parking charges this year. However I would point out that there may be a slight contradiction in what you’ve just said, because you simultaneously said the problem is congestion and transport, but you also say that people want lower or frozen car park charges. Well of course actually having a reasonable level of car park charges may disincentivise people from using their cars, which would help with the congestion problem.
CHRIS MANN: Maybe they’ll drive around until they can find a cheaper one. We could argue that one all day as well George.
CHRIS MANN: So do you think that Cambridge City Council is in a healthy position going forward?
GEORGE OWERS: I think that we’re in a healthier position than many local authorities. This is partly because of many decisions that have been taken over many years. So for example we own a lot of commercial property, and I know that sometimes people are a bit puzzled as to why we do own so much commercial property. Well commercial property brings us in millions of pounds a year in revenue. And we have quite a substantial portfolio, which we are currently adding to, using some of that money that was in reserves. And that brings in hundreds, well millions of pounds a year. And those are decisions that were actually taken thirty years ago by previous Labour councils in the ’80s. So we are in some ways in a more fortunate position than other councils, but we’re also determined to take the decisions now that will allow us to have control over our own destiny, because by 2020 one of the main Government grants which is called Revenue Support Grant will be abolished entirely. And from that time on it’s important that we have control over our own destiny, that we raise the money and spend it ourselves, rather than relying on central government. Because if we’ve learned anything over the last five years it’s that central government is really unreliable and make huge cuts every year. So it’s better that we stand on our own two feet, and that we actually secure the long term future of the Council’s services from within our own resources.
CHRIS MANN: OK. Thank you George for joining us. Appreciate that. It’s councillor George Owers there, who is the Executive Councillor for Finance and Resources. Hot off the presses, published at four thirty. And he’s live on the programme there, talking about the budget proposals for 2016 by the ruling Labour group on Cambridge City Council.