A VERY happy new year to everyone and I hope the Christmas period was an enjoyable one.
Now that the festivities are over the council is carrying out its final preparations for next year’s budget.
Although I’ll probably sound a bit like a broken record, the financial position has been the most challenging ever.
The cuts that are being imposed on us from central Government are really starting to bite and what’s more, there is much worse to come.
I don’t want to sound like the prophet of doom and I’m way past the point of moaning about it.
However, I have responded to the Government’s consultation on this year’s budget settlement and tried to outline the disparities between how the cuts are affecting Hartlepool and the North-East, in general, and the South of the country.
The grant cut for next year means that Hartlepool has a reduction in its spending power of £141.98 per dwelling which is nearly twice the national average of £75.66.
Over the last two years, in percentage terms, our cumulative spending power reduction has been 14.5 per cent compared with 7.7 per cent nationally
I’ve seen a few other tables kicking about that take other factors into account, like the new homes bonus and other sweeteners.
But whichever facts and figures you look at, Hartlepool comes in the top 10 in the country for grant reductions and loss of funding.
That’s all well and good, but when you see that places like Kent have only had a grant reduction of 1.82 per cent, Hampshire 0.95 per cent, Wokingham 0.63 per cent and Surrey 0.31 per cent, it highlights how unfair and disproportionate these cuts are to the places that are most in need of Government support.
My letter to the Secretary of State for Local Government, Eric Pickles, includes an argument about the good old floor damping system.
Every year I have pointed out to whichever Government Minister has been in charge that Hartlepool continues to lose out big time through this system and every year the argument continues to fall on deaf ears.
I’ve tried again though and explained that Hartlepool Borough Council has lost more than £11m as a result of floor damping – a system that was brought in to protect more affluent authorities when the grant settlement began to recognise deprivation levels.
Perversely we still have to contribute next year and the year after, despite suffering some of the biggest cuts in the country.
As well as pointing out the unfairness of the current Government cuts to Hartlepool, I have suggested ways in which the Government may want to consider helping us next year and beyond.
I’ve suggested that the transitional funding that they provided this year, to areas facing the biggest cuts, be extended for Hartlepool (as it has been with some other places) over the next four year – ideally at the same level.
Failing that, the funding could be provided on a passed basis, over those four years, with a 25 per cent reduction each year which would at least give us some cushion to be able to absorb some of the impact of the grant cuts.
The Government is providing a grant for councils which wish to freeze their council tax next year.
This may seem great at first glance, but from a financial perspective, it creates an extra pressure for next year and every year after that of around £1m.
The Government provided the council tax freeze grant last year and said that it would fund the equivalent of a 2.5 per cent rise for the next four years.
This time, it is only going to fund it for one year, so if we take the grant, which I’m sure we will, it leaves the council with more savings to find next year and beyond.
There is a lot of rhetoric around about helping households on difficult times by freezing council tax.
But in all honestly, it comes down to raw politics, which will leave Hartlepool even worse off in the long run.
I’ve pointed out to Mr Pickles that if the Government is as serious about localism as it purports to be, then the council should be left to decide the level of council tax it sets in order to meet local need rather than being forced into doing something that will cause bigger problems further down the line.
Every year, each council gets the opportunity to meet a minister face to face to respond to the consultation and raise any issues.
I’ve declined that opportunity this year, as I did last year, stating that it would be inappropriate to send a delegation to London due to the costs.
Actually, if I had any inkling that a face-to-face meeting would make any difference whatsoever to our grant settlement, I’d walk to London, never mind jump on a train.
Sadly, however, I’m afraid our pleas will not be listened to once again and we will be left to cope with the unfair and disproportionate cuts that will be imposed upon us.
Finally, I keep saying that there is worse yet to come, and I finished my letter off to Mr Pickles by highlighting two major concerns I have ahead of some proposed changes to funding and the way we operate in 2012-13.
I’ve mentioned them both in this column before.
The first is the localisation of business rates.
At the moment, the council acts only as a collection agent for the Government for business rates, but come next April, the full responsibility will be transferred to local government and the council gets to keep what it collects.
That may sound great, but because of the national disparities in the spread of business, they operate a system where the national pot is divided according to need.
Therefore, in Hartlepool, we get back around £11m more than we collect in.
The original fear was that would be wiped out overnight.
Fortunately, the Government has recognised this issue and brought in a system of tariff and top-ups which will protect areas like Hartlepool and we should be no worse off.
The problem lies in the complexities of the proposal, in that it will be linked to the council’s grant cut, and then left as a baseline for the next 10 years.
Without going into the detail, I’ve flagged this up now as a potential problem.
The other concern I have, which I think will actually have a bigger impact on people in Hartlepool than anything else, is the proposed localisation of council tax benefit.
Currently this is administered nationally but the Government is going to transfer it locally with a 10 per cent cut in funding.
In real terms, this will mean a cut to the council tax benefit of a working age family of between 15 per cent and 20 per cent.
Of course, the idea behind it is to try and force people off benefits and into work.
That is all very laudable, but in Hartlepool, we simply don’t have the number and scale of jobs that would be needed to solve the problem.
We also have a high number of people who depend on benefits for genuine reasons.
Mix this in with the probable need to raise council tax in future to cover the freeze this year and we are heading for an impossible situation.
It seems the Government is determined to plough ahead with this plan despite having not thought it through properly so I’ve asked for a little more time.
Despite the fact that there is little or no chance of the Government taking anything any the council says seriously in this consultation, it is imperative that we all lobby as much as possible to get our voices heard.
Let’s see what the outcome is.