Council may delay debt repayment to avoid cuts

17:42 Tuesday 17th November 2015
BBC Radio Cambridgeshire

CHRIS MANN: It’s particularly challenging for councils this year, because of a big cut in the amount of money they get from central government. And it is the time of year when our councils reveal how they’re going to balance their books in next year’s budget. Today it was the turn of Peterborough council, Peterborough City Council, who need to save £19.5 million next year. Our political reporter Hannah Olsson has been looking over the proposals and joins me now. Hannah, this is just phase one of these proposals.
HANNAH OLSSON: Yes good evening Chris. Today the Council announced its first round of plans, which total just over £12 million in savings. We’ll hear about the rest in the new year, after they’ve found out exactly how much they’ll be getting from central government. I use the word savings rather than cuts, because Peterborough City Council believes it can achieve this first round of savings without any reduction in services. This is of course in stark contrast to Cambridgeshire County Council, who told us a couple of weeks ago they would have to make significant cuts to their services in order to balance the books.
CHRIS MANN: So where are they finding £12 million from?
HANNAH OLSSON: Well they say that although there are more pressures on their finances at the moment, the fact that Peterborough is growing so fast means the Council is getting more money coming in. That’s from both council tax and business rates. They also get grants from the Government because of the amount of new homes they’re building, 1.300 last year, and are continuing to sell some of their services to other councils and organisations. They are making some savings though, firstly through what they’re calling ‘a new way of working’. That includes reducing the amount of money they spend on agency social workers, changing the way they organise adoption and fostering services, and something called The Front Door project, which will simplify the way that people can access the Council’s services, using more technology. Finally they’ve changed their debt repayment. At the moment they have a 25-year loan, but they’re increasing this to 42 years, so effectively remortgaging their assets as we might do our homes, to release more money. This will save them £2 million a year.
CHRIS MANN: So Hannah this was just phase one. Are they saving all the bad news for the new year?
HANNAH OLSSON: Well they say not, and they’re expecting it just to be more of the same, saving money through reorganisation and efficiency savings. They also pointed out the whole Council is up for election next year, so they’d be fools to spring the bad news on us then. But of course we’ll have to wait and see. Although this proposal looks significantly more rosy than other councils, it’s worth remembering that Peterborough City Council has already made some significant cuts in previous budgets. We’ve had reduction in funding for children’s centres, bringing in the controversial brown bin charges, just to name a couple. I should also say that the Council is keen to hear people’s views on these budget proposals, and there’s a consultation that’s live on their website now.