Budget speech, Full Council 5th February 2025

We have heard what potential the budget has, like a second hand car with lovely paintwork.

Maybe the seller has highlighted a few scratches, but look at the potential!

I think we now need to kick the tyres and look under the bonnet.

And what do we see?

Unfortunately, it falls apart from the slightest prodding - it’s barely going to get going and certainly wont last the distance.

This isn’t a budget that residents will be able to rely on for the journey ahead.

Let me explain.

This is a budget based on wishful thinking.

Everywhere you look the most optimistic – over-optimistic - assumptions have been made.

Let’s just take a few examples:

Pay inflation – the budget is based on a 2.2% pay rise.  Do we think that is likely with inflation already more than that, and pressure on the bottom of the scales from the 6.7% increase in National Living Wage?

Do you think that’s realistic or is it wishful thinking?

Temporary Accommodation – the budget increases by just over £1m despite the current overspend being around £3m.

And the reason for this – the assumption is that the number of households in Temporary Accommodation will drop from well over 800 to 700 by the end of the year. 

Realistic budget or wishful thinking?

Adults Social Care – Here we have £1.9m added in for growth against the current year overspend that is actually reported as £2.9m.  Yes, the starting point assumes a £1m improvement.   

Then the budget doesn’t allow for the full increased NI costs for providers – almost £1m less than needed to cover the costs.

And the final building block -  savings of over £3.3 m are being taken out of the Adult Social Care budget that covers the costs of the packages of care.

Putting money in, only to take it straight back out again as savings!

Realistic budget or wishful thinking?

Children's Social Care -  Here we see again some brave assumptions with another over half a million to be knocked off the budget next year compared with the current trend.

And inflation assumptions much, much lower than adult social care, despite the National Insurance increases.

But the big assumption is that around £1m of agency overspend will disappear.

Realistic budget or wishful thinking?

And finally on this – Contingencies – These have reduced by over £1.8m compared with the current years budget.

For a final time I ask:

is this Realistic budget or wishful thinking?

Let me put this another way,

We know the executive proudly talk about their increased risk taking.

Is it sensible to set a budget that takes a high risk strategy on line after line, particularly of the big spending areas?  

At the same time with a reducing safety net of contingencies and reserves.

It’s like they are making an accumulator bet.

On pay increases, 
on social care, 
and then 
on temporary accommodation

they are gambling that ALL of their bets will pay off.

Maybe they will be lucky, and it will on some of these.

But they need it to pay off on all of them – or else they lose.

Or more accurately, local residents lose.

As, I say they may be lucky – but it’s no way to set a budget for a council providing such vital frontline services.

A high-risk strategy, that should it fail, will in the words of the section 151 officer make the financial position unsustainable.

Unsustainable!

And I haven’t touched yet on borrowing!

What we see is a continuation of the administrations trend over recent years to push as much spending as possible onto borrowing.  

Loading it onto the council's metaphorical credit card.

Funding a spending spree now, that residents will be paying for, for years to come.

And not even taking the right care and attention on where the money is going – wasting money on Oasis to then announce it’s closing.

And spending well over the odds for the Lloyds building.

How can Full Council, on behalf of residents, trust the Mayor to allocate millions of pounds within big funding pots wisely, after these recent events?

In the capital strategy, we see borrowing going up to almost £155m in 2028/29.

Starting from just £60m 2 years ago.

And if you think it will end there, then I think you are suffering from another bout of wishful thinking.

Are we supposed to believe that having added so much into the Capital Programme in the past two years – nothing else is going to be added in the next 10 years.  

In fact £2.3m has been added in since we last met!

And why is this important?

It’s important because the more debt you have the more interest you pay.

And the more interest you pay, the less there is for frontline services.

The portfolio holder has highlighted that the debt has been kept low over the previous administration – we obviously welcome this recognition of what a good job we did.  

With lower debt, we've had lower interest payments and millions more to spend on frontline services

Looking at what we have before us tonight, we see financing costs reaching over 8% of the budget by 2031.  

That’s over £17m a year in financing the debt.  And around £10m more than it was back in 2022/2023.

That is £10m a year of cuts that will have to made that otherwise wouldn't have.

Just let that sink in, before you vote on this tonight.

Where are those £10m of extra cuts going to come from?

This isn't about bean counting for its own sake – this is because we care passionately about services for residents.

Our street scene, our parks
Residents needing a roof over their heads
Residents relying on social care

and so much more.

This isn’t monopoly money – this has real effects on the lives of people in our Borough.

Finally, I want to come onto a few specifics.

There are things that can be done to reallocate funding in this budget, to higher priorities.

We are concerned about a list of cuts, including the impact 
on libraries
on street cleaning
on street lights
on bus fares
and on Telecare charges

and by making different choices, funding can be found to protect these services.  

It’s a matter of: what are your priorities?

So, in conclusion.

If this budget was a car, I wouldn’t trust it to get me to my destination and I certainly wouldn't set off on a long journey with it.

This budget:

It’s full of wishing thinking - that doesn’t match up to real world experience.

It’s full of risk – without the safety net of reserves we used to have.

It’s full of debt – storing up problems for the future.  

If this budget fails the council will likely end up in an unsustainable position – will the council have to go begging to the government for exceptional help?

Will that mean higher council tax rises to rescue the council or will the government just say to just borrow more and more to balance the books – with the prospect of deep, deep cuts to rescue the authority from bankruptcy.

This is a pivotal moment for the council. I urge everyone to think carefully before you vote tonight.