No signs of end to austerity
WHEN she’d finished dancing on stage to Abba’s Dancing Queen, Prime Minister Theresa May told the Conservative Party Conference that the age of austerity was nearly over.
It’s like she knows she’ll need to start spending again to win an election. It’s a nice slogan, of course, but the end of austerity doesn’t mean all the cuts of the last eight years are
reversed.
Indeed, looking at Rossendale Council’s current budget plans, the end of austerity doesn’t seem to mean that all future cuts have been cancelled either.
Despite slashing its overall grant from Government cut by almost half, Rossendale Council still needs to find another £1m in savings within the
next two years to remain solvent. For a small council, that’s a big challenge.
At a recent council meeting, the authority published perhaps the most detailed assessment of where its finances are at.
This year alone, it started with a £797k shortfall in funding, some of which can be plugged by reserves (AKA savings) - which
obviously won’t last. That goes up to £925k next year, then over a million by 2020.
The good news - if you can call it that - is that the council believes it can plug most of that gap through about 20 different projects. The not so good news is that when you’re relying on so many projects to deliver your saving, there’s always a risk one won’t deliver and the pack of cards comes
falling down.
Perhaps the most interesting one is the council now banking on receiving £120k a year in business rates from whichever businesses open up in the second phase of the Spinning Point development.
That would plug 10% of the funding gap from 2021 according to the council. That would suggest the council is either being prudent in its forecasting of when rates will begin to arrive, to that it could take even longer than most people expected for Spinning Point to come to pass - three years seems a long time to complete what in building terms is a relatively small scheme, albeit one with a big impact on Rawtenstall.
The Spinning Point project was already a big deal for Rawtenstall, but now it’s becoming an almost existential deal for the council. Around £1.1m of the cost of building the bus station and renovating the old Town Hall came from the Lancashire Growth Fund. The council risks forfeiting that money if phase 2 - the proposed hotel and what not - doesn’t take place.
The council also needs tenants in the new bus station for the operation of the bus station to not become a drain on the council. It also needs bus companies to use the bus station for it not to become a drain on the council. Bus companies pay every time they use a bus station - and
the fact Rossendale Transport is no longer owned by the council, but by Transdev, will always add an element of uncertainty into discussions.
If it all comes together, and works the way the council hope it will, the Spinning Point development will clearly have major benefits for Rawtenstall, and indeed for the council. But given it’s taken over a year to negotiate basic access arrangements with neighbouring Royal Mail, surely nothing can be taken for granted.
Equally, the council is also assuming that the council tax money it receives will go up not just through annual rises - a necessity - but also through have more homes to charge council tax on. By 2021, it expects to generate £103k from additional properties. The council has 31,000 homes to tax at the
moment.
A very rough calculation would be that it would need another 500 homes to be built by 2021 for that prediction to come true. Given the controversial nature of local housing planning applications at the moment, 500 seems ambitious.
In short, Rossendale’s financial challenges are far from over. To even be able to break even in three years time, Rossendale Council needs a lot of good luck on its side, and almost perfect planning of projects.
It seems safe to say that as far as our local council is concerned, the age of austerity is far from over.