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Mayor lays out
scale of financial challenge
GOVERNMENT cuts will result
in Liverpool City Council only having enough money left to run
mandatory services such as social care within two years.
That is the stark warning laid out in a financial report to be
considered by a special summit of the Mayor's Cabinet on Friday, 4
October 2013, to which leaders of all political parties on the City
Council and local MPs have also been invited.
The latest estimates show the City Council has to save a further
£156 million over the next 3 years, on top of the £173 million that
has been cut in the past 3 years; a total of £329m in 6 years. This
is an increase of £16 million on previous estimates, due to changes
in funding arrangements recently announced by the Government.
Currently the Council spends around 25% of its net budget of £550
million on items such as cultural events, regeneration and leisure
centres, which are vital to Liverpool, but which the Council has no
legal requirement to provide.
The scale of the financial challenge is such that, if the Council does nothing, by 2016/17 all of this money will be required to fund
the services the Council is legally required to provide, such as
adults and children's social care, environmental health, refuse
collection and street cleansing.
Mayor Joe Anderson said:- "Staff across the City Council have
done an incredible job in the last 3 years managing the impact of
the significant savings that we have needed to make. We are a much
leaner, smaller and efficient Council than we were, and have already
had to make significant cuts to services and to the number of people
we employ. But there is far worse to come and people need to
understand that over the next few years we are going to be stopping
doing things that we currently take for granted. If we do not, we
will simply go bankrupt. 80p in every pound of our income
comes from Central Government, and because they have taken almost
half of that funding away from us, we are going to have to make some
very difficult and tough choices. Over the next few months I
will be starting a discussion with residents, and our partners,
about what they value the most, and what services they are prepared
to see significantly reduced or withdrawn altogether. Although
it will be painful, we have no alternative."
The report also outlines that:-
► The City Council will be exposed to greater financial risk as it
is now responsible for collecting £92 million of Business Rates at a
time when income has flat lined and many companies are struggling
► Welfare reforms - particularly the
Council Tax Support scheme –
has significantly affected the collection of Council tax. Around
45,000 working-age households face paying an extra £88 per year and
some are struggling to pay
► Only 10% of income comes from Council tax and the government has
effectively capped the level of that Council tax at less than
inflation, meaning it is not increasing with other cost of providing
services
► The remaining 10% income comes from fees and charges from car
parking, fines or planning or land searches where development
activity has stalled due to the state of the economy.
The latest financial position shows the City Council will have to
save £45 million in 2014/15, £63 million in 2015/16 and £48 million
in 2016/17.
Consultation is expected to begin shortly on the budget options for
2014/15.
FINANCE MYTHBUSTER
► Why don't you cut the number of staff and managers to save money?
The senior management team has been halved, saving £6 million per
year. We have also reduced the size of our workforce by 1,600
through a voluntary severance scheme.
► You're owed millions of pounds in uncollected
Council tax. Why
don't you target non-payers?
Liverpool City Council's Council Tax collection rate is as good as
other large cities, at around 96%. However, unlike many other
councils, we do not write off old arrears, which means that the
amount of Council tax debt that appears in the accounts is far
higher than other councils. But any comparison is meaningless as
they treat their debts differently and have written off any chance
of recovering the money. Last year, the Council brought in £8.5
million in historic Council tax arrears and £381,000 of poll tax
debt, which was then invested in services. This is money that the
Council would not otherwise have had.
► Why don't you dip into your reserves to cover the gap?
The City Council has reserves of £115m, which will halve over the
next three years as we pay bills such as legal claims and other
committed future expenditure. Some of the reserves are held on
behalf of other organisations, for example schools. Councils are not
allowed to use reserves to plug holes in the budget as it is a
one-off fix which just causes more problems in the future – once it
is spent it is gone forever.
► You've recently announced that you've borrowed money to buy
Everton FC's training ground. Why do that if you're cash strapped?
The Council is not allowed to borrow money to pay for day to day
services, but can do so if it is an investment that generates a
return, such as rental or lease income. The revenue stream can then
be ploughed back into providing essential services. The Council will
only invest in schemes when it is confident it will generate a
return, and the risk is minimal.
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Autumn Steam
Gala 2013
ON Sunday, 6 October 2013,
The
West Lancashire
Lancashire Light
Railway will be holding its
annual late season gala for enthusiasts young and old, will be
running 11.30 am to 4.30 pm. 3 locomotives will be in steam and will
be:- Montalban, Utrillas, and Joffre. - All 3 will be hauling
frequent passenger trains. In addition, this event traditionally
celebrates the varied industrial background of many 4 locomotives,
steam and diesel. Diesel locomotives will be in action, and
demonstration goods trains will operate at intervals through the
afternoon. Admission to the site is free. Fares (valid for unlimited
rides):- Family - £10.50; Adult - £4.00; - Senior - £3.50; Child
(2+) - £3.00... Lineside passes for photographers also available.
CLA scrap metal victory will
frustrate thieves
THE licensing laws
introduced this on 1 October 2013; as a result of campaigning by the
Association; will make it tougher for thieves to dispose of stolen
scrap metal, says the CLA in the North. The Association said
metal theft has a huge impact on rural businesses in the region, and
often vital pieces of equipment or building infrastructure are
stolen and sold for a tiny fraction of their value.
CLA North Regional Director Dorothy Fairburn said:- "We are
pleased to see the results of our lobbying victory put in place so
metal theft can begin to be tackled. Farm machinery, lead stolen
from roofs, and copper cable taken from phone lines all cause major
problems to rural business and communities. These much-needed
changes to the system will give local authorities real power to
combat the rise of metal theft."
The CLA's Scrap the Cash campaign won a major victory with the
passing of the Legal Aid Act earlier this year after the CLA
President met the former Home Office Minister Lord Henley to ensure
cash payments by scrap metal dealers would be prohibited.
Miss Fairburn added:- "We believe new regulation should only
be put in place in certain circumstances. In this case, it is
crucial to deal with the menace of scrap metal thieves."
Rent arrears spiral – Bedroom Tax
in Merseyside 6 months on
MERSEYSIDE Housing Associations; working
together to assess the impact of Government welfare reforms; have
released new figures today on the 6 month anniversary of the
introduction of the benefit changes.
They show spiralling rent arrears; as vulnerable tenants struggle
to make up the shortfall as a result of benefit cuts; as well as
sharp increases in the number of empty properties and the time it
takes to re-let homes when they become vacant. According to the latest data, arrears in Merseyside have increased
by £2.2m when compared to the same period in 2012.
This loss of income could help build more than 125 houses in the
region, which in turn would; create 280 jobs or have an economic
impact of over £10.5m, according to the National Housing Federation.
Ian Thomson, Executive Director of Asset Management at First Ark
Group which includes KHT said:- "The impact of the bedroom tax
or under occupancy charge is having a major impact on our tenants
and communities with over 60% of those affected finding themselves
in arrears for the first time. The reduction in housing benefit
payments, along with paying Council tax for the first time and the
squeeze on incomes through rising prices and falling wages is
pushing many tenants into increasing indebtedness. This
is placing vulnerable tenants under major pressure and while there
are not enough smaller homes available for them to downsize is
trapping them in cycle of debt and desperation. As a result we have
seen a 30% increase in void properties and in particular a 130%
increase in 3 bed houses becoming void, with a resultant increase in
void times, costs and rental loss. We would urge the
government to review this policy as a matter of urgency as not only
is it making the most vulnerable within our communities suffer
severe hardship but is and will cost the public purse more."
At the same time "void" properties have increased by 29% to
1,956 and the average time it takes to re-let a property when it
becomes empty has increased from 28 to 38 days.
The result is a loss of rent to social landlords of £616,662 per
month compared to £397,224 last year.
Daniel Klemm, North West External Affairs Manager at the National
Housing Federation, added:- "Today's figures from Merseyside
are yet more evidence to show that the bedroom tax is pushing
vulnerable families into debt. People can't even move to
smaller homes to avoid the Bedroom Tax because there aren't enough
smaller properties. Housing associations are working flat out to
help their tenants cope with the changes, but they can't make
one-bedroom houses appear out of thin air. The Bedroom
Tax is an unfair, ill conceived policy that is hurting Britain's
poorest families and it must be repealed."
On April 1 2013, the coalition Government began cutting the housing
benefit of people living in social housing who it believed had one
or more unused rooms and gave them a choice: find the extra money to
pay the rent, or move to a smaller property, irrespective of whether
demand issues that exist in areas like the South East were
applicable in locations like Merseyside.
A group of social landlords on Merseyside began campaigning against
the Government's Bedroom Tax. The housing providers believe the
Bedroom Tax is unfair and does not achieve what it sets out to.
They conducted the survey of housing associations across the
Merseyside area; both those involved in the campaign and others;
to gain a picture of the ongoing impact of the benefit changes. |
