Lewis Herbert Cambridge City Council on Coalition cuts, bankruptcy and council borrowing

cambridge_city_council09:39 Tuesday 23rd September 2014
BBC Radio Cambridgeshire

PAUL STAINTON: Marion’s been on. Morning Marion. She says, “Paul, some of the managers in the NHS just need to go. There are so many of them now. Surely money can be saved in that way. No way should the NHS be means-tested.” But how do we find this £30 billion? When do we stop pouring money in and find a different way? Or should we? Or should the Government just direct money from somewhere else? Julian says, “There’s a substantial waste of financial resources inside the NHS, and a culture of only selecting candidates for the top jobs from people already working within the system.” says Julian this morning. ” How on earth are they going to get new blood in the system? It really needs a shake-up from the top downwards, and rooting out dead men’s shoes, automatic promotions. Let’s face it, Marco Cereste was in charge of our patch at one time and that didn’t work either.” says Julian this morning. Keep your comments coming in on the NHS. How do we work it out? How do we find a way to fund it properly? And talking of funding, it seems to be the in thing at the moment for local authorities to mention bankruptcy when talking about their dire financial situations. Indeed, the much-mentioned Marco Cereste told me that the Peterborough City Council was looking at every area of finance in order to avoid bankruptcy, and that his staff are selling their expertise just to try and balance the books.
MARCO CERESTE: It’s the money that worries me. And we’ve done a lot of things in the city to train our staff, so that we can sell their expertise. We’re not only just saving money in the Council, we’re actually selling the Council’s expertise. We’re doing this where lots of other cities don’t really know where to start. And so that’s doing really really well. I wish we’d have started earlier. I wish we’d have had this drive earlier. But we didn’t, and we are where we are.
PAUL STAINTON: That’s the Leader of Peterborough City Council, Marco Cereste. They’ve got a £22 million budget shortfall. Cambridgeshire needs to save £150 million. And Cambridge itself needs to save £30 million over the next five years. Well the Local Government Association says local government is nearing crisis point. So what would happen if a local authority actually went bankrupt? Would assets be seized? Would dustbin lorries be carted off – the street sweeper? What would happen to our services? Well let’s talk to Cambridge City Council Leader Lewis Herbert. Lewis, good morning.
LEWIS HERBERT: Good morning Paul.
PAUL STAINTON: Are local councils just scare-mongering? Are you scare-mongering a bit?
LEWIS HERBERT: We’re certainly not. We haven’t said we’re going to go bankrupt. Our job is to work for residents and to make sure that we deliver quality services. We’re not a poor city, but as you’ve introduced, we have to save £6 million a year by 2020, and that’s about a quarter of our budget, and that’s after we’ve taken all the easy wins and cut our spending in line with the Government’s spending cut of 30% in the last few years.
PAUL STAINTON: Yes, it’s a lot of money, isn’t it? You can understand then why some councils are using the B-word. But equally, financial experts we’ve spoken to say local authorities could never go bankrupt.
LEWIS HERBERT: Well they have in America, and they have in other places. It is possible.
PAUL STAINTON: Would the Government not just step in?

LEWIS HERBERT: You might be surprised to know that we could in theory borrow as much as we like, and some councils have borrowed too much.
PAUL STAINTON: When you say you can borrow as much as you like, what do you mean?
LEWIS HERBERT: Well apart from obviously the fact that the markets would make a judgment and we shouldn’t be taking risks, councils have got quite a lot of financial freedom. So it isn’t impossible.
PAUL STAINTON: So if you thought ‘I don’t want to save £6 million a year’ you could go and borrow £30 million tomorrow.
LEWIS HERBERT: It’s possible for us to borrow. But clearly we won’t. We also have reserves, and it’s our job to protect the services and to improve the city. We’ve got to cope with growth. We want to tackle inequality in the city. It’s up to us to provide the leadership. So I don’t believe any council in this country has got a real case for saying that they’re going to go bankrupt. I think despite all of these trials and tribulations, there are different ways that we can deliver the services. We can improve the way we do it. We can become more efficient. We are working closely with South Cambridgeshire. We can help our customers do stuff on line. There’s just all sorts of ways we can improve. We’ve got quite a lot of assets in the city, so those assets have accrued value because it’s a growth area.
PAUL STAINTON: Is it time for councils to look at selling things that they own? Is it time to sell off the town hall, cut executives’ pay, maybe cull councillors, get rid of the expenses?
LEWIS HERBERT: Well we’re not in a position suddenly to change the number of councillors, but we’ve got a boundaries review, so that might reduce the number of wards there. Somebody suggested make the Guildhall into a hotel. We need an office. We need a base. We are shedding offices. We’ve shed one major office block. We’re shedding another office, and we plan shortly ..
PAUL STAINTON: We’ve got technology now though Lewis. Could you not work on iPads, meet in Costa?
LEWIS HERBERT: Well there was a debate about iPads. I’m not sure the public want councillors all to have iPads. I’m not sure what the view would be. We certainly can do how we run meetings a lot more efficiently.
PAUL STAINTON: Well in Fenland they reckon they’ve saved about £100,000 on paper by giving iPads out.
LEWIS HERBERT: Well we will be looking to make a significant cut in our committee costs. Essentially we have to save another 20% to 30% in our overall budget. So we will look at everything. But there are ways that we can make those savings without that affecting front-line services like street cleaning, refuse recycling, services people value, as well as we’ve changed the way we run things. We’ve got a cultural trust …
PAUL STAINTON: When you get to the point where you can’t save £6 million a year, you’re struggling and you get to the point where you’re cutting the basic services, you said you can borrow what you like. Would the temptation not be just to go and borrow it, rather than cut those basic services?
LEWIS HERBERT: No. No. We have to .. (LAUGHS). Someone’s got to pay it back. I think what we are saying is that after 2020 we really don’t know what we would do next, because we come to the point then. And that’s as with the budget consultation we’ve got on-line. it’s not that we’re putting the burden on the public, but if people go on-line, Cambridge City Council Budget Consultation, they can see some of the tough choices we’ve got.
PAUL STAINTON: Now you’ve got a tool on there allowing people to choose what to cut, what to save as well. That’s quite good.
LEWIS HERBERT: Yes. And obviously they can look at issues like council tax. They can look at issues like some of our costs like the cost of councillors. We’ve got some of the lowest allowances in the country. Our basic councillor allowance is £3,000 a year. That is not a lot. So there’s a lot we’ve either not increased, or cut already. But we do urge people to have a look at that consultation, and also to just email us, send us their views. because we’ve also got a report going to committee next week, stating what our finances are. But no, there shouldn’t really be some of the scare-mongering, albeit that we wouldn’t underestimate the damage that the Coalition cuts have done, particularly because we’ve got people in the city that have had a lot of welfare cuts. We’ve got the bedroom tax. We’ve got a whole load of pressures that have particularly hurt people in the greatest need in Cambridge.