Financial Check
YESTERDAY I took the Chancellor, Jeremy Hunt, to see businesses in Woodley Precinct.
This was a great opportunity for him to meet local people and for business owners and staff to tell him directly the challenges they have faced and what they feel is important for their success.
One of the issues that local businesses, especially shops and restaurants, face is the doubling of parking charges by the Liberal Democrats. They say they had no choice, but businesses have been telling me it is putting off shoppers.
Since taking power in 2022, Liberal Democrats have repeatedly told residents that they are both financially responsible and that the Council is on the brink of bankruptcy. This bizarre swinging backwards and forwards has caused residents concern, but neither of those statements is true.
It is especially worrying that residents hear this narrative, like a pendulum of doom, against a backdrop of other councils being in financial difficulty. However, those councils faced problems which are not the case in Wokingham.
For example, Thurrock Council racked up debts of about £1.3 billion after a series of failed investments.
A report into what went wrong at the Council cited serious mistakes by individuals and “selfsustaining, systemic weaknesses which have allowed for repeated failure.” Birmingham Council went bankrupt after a longstanding equal pay dispute led to claims of up to £760m. Both cases were exceptional and far from the norm.
Last year, Wokingham Borough Council’s Chief Financial Officer’s report said that the Council’s Finances had been in good shape in previous years, under Conservative administration.
The report said, “the Council has worked over many years on the highest standards of financial management”.
This is in stark contrast to what Liberal Democrats had been saying while campaigning.
Liberal Democrats criticised the previous Conservative administration for having used some of the Council’s reserves to support residents and businesses during the pandemic. But the pandemic, on a scale which hadn’t been seen for a hundred years and necessitated the near total shut down of the UK economy, was an exceptional time.
These kinds of exceptional circumstances are exactly what reserves are for. I am proud of the work Conservative councillors did at this time to support residents and local businesses. Criticisms of Conservatives using reserves ring hollow when the Liberal Democrats last year took money out of reserves to pay for their pet project to move to fortnightly waste collection for which they have been unable to provide a business case to justify. They also neglected to mention they were going to bring this in during the preceding election.
Data sets out how the Council’s financial resilience compares on an index highlighting key financial indicators such as reserves sustainability, external debt, and social care ratios. In 2020, under Conservative administration, Wokingham was rated in the top 20 for financial sustainability by the Chartered Institute of Public Finance & Accountancy.
Data from 2020-21 shows an even further improved position on indicators of financial stress compared to other local authorities, with the level of reserves being at the most prudent end of the scale and showing no indicators of risk to the council.
As I wrote two weeks ago, Wokingham’s core spending power per household is higher than any other council in Berkshire apart from Slough.
The Liberal Democrats regularly claim that they have no choice but to make “difficult decisions”, such as doubling car park charges, because the financial situation leaves them with no other option. Undoubtedly there have been financial challenges that have affected all local authorities. The last couple of years has seen a period of high global inflation which have led to increased interest rates in many countries, like the UK.
However, as the report demonstrates, compared to other Councils, Wokingham has been better placed than most to meet these challenges thanks to careful financial management over the past 20 years of previous Conservative administrations.
Next week the Liberal Democrat administration will set their budget. If you hear them talk about “difficult choices”, it’s how they’ve handled the Council’s finances, and not the healthy legacy left by the Conservatives.