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Sorry, Councillor, you’re the one who looks deceitful

Sorry, Councillor, you’re the one who looks deceitful

🕔02.Oct 2013

If you’ve the misfortune to have a surname that lends itself to unfunny, punny ‘jokes’ – fair game, big game, game for a laugh, etc. – you’ve heard them all by the age of five, and for the rest of your life you learn to smile pityingly whenever someone attempts one for what they somehow imagine is the first time.

I can readily identify therefore with what, especially as a politician, our Council Leader must have endured. I also worry for him, particularly now that, as Paul Dale reported last week Sir Albert’s ‘Jaws of Doom’ depiction of the Council’s future has morphed into the battlefields of Armageddon.

Sir Albert’s insistence on emphasising quite so frequently to the apocalyptic state of the Council’s finances seems almost masochistically to invite ‘name jokes’: Doom Bore, Armageddon Bore, Götterdämmerung Bore.

More seriously, while the Leader fears we don’t grasp the full seriousness of the situation, others, including potential investors and overseas visitors, may be swallowing the headlines whole, with who knows what consequences.

And, as Paul Dale also noted, it does raise Plan B-type questions. Even if selling the council’s assets won’t directly help the revenue budget, there seems to have been little prioritised renegotiation of its massive private sector contracts.

Coventry University’s Professor David Bailey is one who regularly asks such questions, sometimes prefaced with the injunction that there’s no need to tell us repeatedly how bad the Council’s revenue position is; we got that message long ago.

But it seems the Prof’s wrong. A letter in last week’s Birmingham Post from Councillor James Hutchings indicated he, for one, hadn’t got the message. Indeed, he accused Sir Albert of lying – or, to be precise, deceit.

The Leader’s ‘Jaws of Doom’ metaphor, Councillor Hutchings suggested, “leads people to believe that Government funding has been reduced. That is not true – that impression is deceit – funding has been increased”.

I’m no lawyer, but, unprotected by any immunity like parliamentary privilege, that seems to me a pretty serious public allegation. Moreover, by basing it on “official budget papers”, the Councillor appears also to be impugning the professionalism and political impartiality of senior officers.

Still, these people are more than capable of taking care of themselves. My concern is the Councillor’s failure to grasp his own Government’s austerity policies and their impact on the Council, and his misrepresentation of that impact to his constituents.

If Government funding to the Council really had increased, the two politicians most surprised, and alarmed, would probably be Chancellor of the Exchequer George Osborne and Communities and Local Government (CLG) Secretary Eric Pickles.

For, in the Coalition’s October 2010 Spending Review Osborne announced that the then plan to eliminate the country’s structural deficit by 2015 would involve the public sector taking the heaviest hits, with up to half a million job losses and an average 19 per cent four-year cut in departmental budgets.

But, with NHS spending increasing slightly and direct funding to schools protected, local government would be particularly targeted. By 2014/15 its CLG grant would fall by 28 per cent. Individual councils would face an average 7.1 per cent annual cut in their budgets, though concentrated heavily in the first two years – and weighted also to the disadvantage of those councils, like Birmingham, more than averagely dependent on grant funding.

This 28 per cent figure has been embedded in the minds of council leaders, senior finance officers, and, I’d assumed, most councillors for three years now, although it was upped to 33 per cent when in this June’s Spending Review Osborne announced an additional 10 per cent cut for 2015/16.

There are, as Councillor Hutchings notes in his letter, “many complications” in local government finance. Percentage cuts can be made to look bigger by allowing for inflation, or smaller by taking the Government’s preferred Spending Power measure and including other potential income sources.

There’s no complication whatever, though, about the Government’s core policy of reducing severely and annually the funding, and thereby the size, of the public service in general and local government especially.

So why does Councillor Hutchings claim that official budget papers show that “total Government grant funding for 2013/14 is £160 million or 18 per cent more than the original grant for the previous year”?

Well, ruling out visual impairment, it can only be obtuseness, or worse. Though he doesn’t indicate it, the official papers must be the Council’s Business Plan and Budget 2013+, and the source of the Councillor’s deceit accusation apparently Appendix 5A (p.188).

The relevant table is slightly misleading, for what it labels ‘Total’ Grant Funding (TGF) isn’t strictly total. But that, I promise you, is not the issue here. Councillor Hutchings’ issue is that Column 1 in the table shows TGF 2012/13 of £882 million, and Column 3 for 2013/14 £1,042 million, giving him his 18 per cent increase.

However – and it’s really rather a big however – occupying the inch of space right between Columns 1 and 3, is Column 2: “2012/13 Adjusted” – adjusted for the several major changes in the grant system between the two years, prompted by the introduction of the business rates retention scheme.

Most important change was that 2012/13’s Formula Grant became in 2013/14 Government Start-Up Funding with various grants transferred in and out. For example, Early Intervention and Learning Disabilities grants were transferred in, and there’s an additional grant to compensate for the fall in council tax resulting from the replacement of Council Tax Benefit by Council Tax discounts.

This gallimaufry of changes was summarised, not unfairly, on p.6 of our council taxpayers’ budget booklets, as ‘Government Start-Up Funding’ in 2013/14 including £78 million formerly shown under ‘Other Grants’ and £90 million under ‘Council Tax’ – to which, for his readers’ benefits, Councillor Hutchings might more helpfully have referred to make his attempted point.

Back, though, to Appendix 5A of the Business Plan. With these amendments, enabling a comparison of the two years on a ‘like-for-like’ basis, the 2012/13 Adjusted TGF in Column 2 reads £1,044 million, more than eliminating Councillor Hutchings’ alleged £160 million grant increase.

On p.57 of the Plan is the Council’s calculation that its £783 million of Start-Up Funding in 2013/14 represented a decrease of £31.5 million (3.9 per cent) compared with 2012/13 on a ‘like-for-like’ basis, plus the Government’s announcement that it will fall to £711.2 million in 2014/15 – a further reduction of 9.2 per cent.

I know politics is a rough world, and I live a comparatively sheltered life. But I’m really quite shocked that someone in Councillor Hutchings’ position should seemingly so wilfully misrepresent a statistical picture in such a partisan fashion, using documents that readers can’t possibly be expected to check for themselves. If any deceit is being perpetrated here, I’m quite clear in my mind who’s responsible.

Cover Image: Council Business Plan

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