It is hard to believe that 12 months have passed since I last proposed the Budget of the Majority Party. What a lot has happened during that period.
In May, after five years of tackling an inherited deficit from a Labour Government which actually believed that it had abolished “boom and bust”, the Conservative Party was re-elected to Government – the first time since 1992. Thirteen years had passed whilst the affairs of the nation had been in the hands of others who allowed the public sector to rocket mercilessly and who presided over a catastrophic loss of control of public finances and inept regulation of banks. We have had to mop up this perfect storm – starting with one hand tied behind our back in coalition. Meanwhile, having correctly told the 2010 incoming government that there “was no money left”, the Labour Party went into a state of fatal denial where it remains to this day.
They still plan to buy themselves votes by either borrowing or printing money or raising taxes. They won’t be happy until they have reduced our economy to the state of Greece’s, so no wonder Mr Corbyn is already relying on their former finance minister for advice. How long before Mrs Merkel has to step in to put a stop to Corbynomics too?
Politics can be a strange business. This Conservative Government has protected spending on the NHS, pensioners, international aid and schools. It has introduced new taxes for the most wealthy and helped to raise living standards for the poor and pensioners. A National Living Wage comes into effect next month and is expected to rise to £9 per hour by 2020.
Meanwhile, in the face of the general election defeat last year, the Labour Party changed its left-wing leader for an even more left-wing leader and is now luxuriating in the dangerous pursuit of pandering to its activists and persuading itself that it has a mandate for extremist policies. It is ignoring the many in an effort to win the plaudits of a few. Momentum is indeed draining away.
We seemed to have a little local difficulty here too. One minute Cllr Dent Coad was leading the long march to socialism and forecasting the imminent arrival of the revolution in Kensington, the next minute she was left nursing her Twitter account. It seems that in Kensington & Chelsea Labour Group brutalism isn’t confined to architecture…
Decimated in Scotland, wiped off the map in the west country, pummelled by UKIP, Labour has not known whether to apologise or radicalise. Certainly it remains estranged from the notion of running a balanced budget and tonight, once again, we are invited to squander our reserves. But enough of them Mr Mayor:
I am pleased to propose the Budget for 2016-17.
For the seventh year since 2009 I am able to announce that we propose that the council tax should be frozen, thereby honouring the pledge we gave to voters in 2014. For all the caricatures of Kensington and Chelsea as a wealthy borough, there are plenty of people on modest incomes for whom the council tax is a significant outgoing at a time when their returns on investments and savings are very restricted. It is wrong to treat the council tax as a surrogate property tax. It is not. It is a contribution made towards the cost of local services which we all use. The council tax accounts for £74m of our total spending so about 18 per cent of the overall total spend for a year. This continued freeze will be welcome to those on modest or fixed incomes and is made possible by careful and continuous control of our cost base.
I am also glad, Mr Mayor, that the Mayor of London has reduced his precept by 6.4 per cent. The Band D precept across London is set at £276 per property, down from £295 last year. A Conservative Mayor for the last eight years has protected Londoners by reducing his share of the council tax by ten per cent in line with his manifesto commitment for his second term, thereby saving the average B and D council taxpayer some £500 over the course of his Mayoralty, and I hope that after the 5 May, a Conservative Mayor will continue to provide good value for Londoners.
This Council’s gross expenditure for 2016-17 will be £408m, a reduction on a like-for-like basis of £57m since 2010-11 – a real terms reduction of 20 per cent. About 55 per cent of our total spending is funded by central government grants of one kind or another. However the Comprehensive Spending Review last autumn gave us some slight grounds for optimism. Rather than the £12m and £13m reductions for the current year and next year respectively, we anticipate that total reductions in overall grant in the three years from 2017-2020 will be closer to £8m annually.
Let me now turn to the individual business groups.
Adult Social Care and Health
In the review, councils were also given the discretion to raise council tax by an additional two per cent to cover the additional costs of adult social care. In this borough more than 800 residents receive home care and £10m of the overall £57m budget will be spent on supporting those with learning disabilities either in residential or supported care. It is vitally important that we work effectively with the NHS to ensure seamless care between what happens in hospital and what happens at home. We are also very fortunate to have a strong and robust voluntary sector providing crucial support across the sector and I am pleased that once again we have been able to protect their overall budget. We also continue to focus heavily on supporting preventative measures in our Public Health programme. Our Adult Social Care budget is forecast to fall slightly next year and we will indeed continue to be one of the only councils in the country to continue to support those adults with moderate care needs, a decision recently re-confirmed by the Cabinet.
Family and Children’s Services
Nothing can be more important than providing protection to vulnerable children and doing all we can to ensure that children up and down the borough have the best possible opportunities at the start of their lives.
From my own visits to our children’s social work teams over the last twelve months I know that we have enthusiastic, thoughtful and innovative social work teams providing a full range of integrated and intensive support to families. We have just had a very thorough Ofsted inspection of the department. I await the report of the inspectors with interest.
The pupil premium alone in Kensington and Chelsea will bring our schools an additional £1.3m next year. Parents in the borough should be proud that all our primary schools have been rated Good or Outstanding by Ofsted. We have a wonderful GCSE pass rate which is even more remarkable when you consider the high- population churn in parts of the borough and the number of children for whom English is not their first language
Kensington and Chelsea is undoubtedly one of the most beautiful boroughs in London. We attract a huge number of daily visitors who come to work or to shop or to visit our world-class museums and markets. That means a constant challenge to keep the streets clean, to take the rubbish away and to encourage residents to recycle as much as possible. Now is not the time to reduce the budget for street cleansing – so we will not. We have invested heavily in a new litter bin replacement programme. We continue to have wonderful parks which all now have Green Flag accreditation and we have leisure centres to be proud of rather than to apologise for. Our street markets in Portobello and Golborne are known around the globe and we have rightly devoted resources to promoting them and encouraging new traders to try their fortunes on a street stall.
The greatest challenge facing London continues to be the lack of housing at a price that people can afford. We have more than 1,800 people in temporary accommodation and the task of finding suitable homes for them is a daily challenge for our housing department. That is why the Deputy Leader is working on a number of projects that will remodel our estates, providing existing tenants and leaseholders with better-quality properties, recreating proper streets where people can properly feel part of a neighbourhood and creating more new homes for rent and sale. We have continued lobbying the Government to ensure that the Housing Bill does not reduce our capacity to provide vital housing in the borough and I am grateful to Victoria Borwick for her interventions with ministers in this crucial area.
Libraries and Arts
Our six libraries attract almost one million visits a year and we believe that they play a vital part in helping people to educate themselves and their families, enabling them to anchor themselves in the borough and to have wide access to a wonderful local history archive. I hope that we can get better at showcasing a little bit of that history in the Town Hall when the entrance spaces are refurbished. We have undertaken a major review of our libraries seeking to ensure that they are running events and services which will attract new users. That includes support for start-up businesses and entrepreneurs as well as reading and homework clubs for younger residents. The range and depth of periodicals available has been enormously enhanced.
Nothing matters more to the majority of our residents than planning. Lives can be made miserable by strung- out building works and inconsiderate contractors.
As in many parts of the country, many of the worst errors in planning policy here took place between the 1930s and 1970s and are all too obvious to the naked eye.
This Council receives in excess of 6,000 planning applications a year. I know from my own mailbag that residents would like to see the Council do more to curtail various developments, but this ignores the hard fact that planning law in this country is permissive and wants to encourage development. It would be very good if some of this liberalisation could be restricted to those parts of the country that clearly need it and that areas of extreme high density such as Kensington and Chelsea could have greater discretion to limit works that inevitably have an impact on close neighbours.
The department has been reviewing the way it operates and has taken steps to increase transparency by publishing pre-application advice once proposals are submitted. In addition to increasing spending on enforcement we have been in the forefront of taking action to protect neighbourhood assets such as pubs and to limit basement developments with the final piece of the jigsaw coming into effect next month with the Article 4 direction taking effect.
I am pleased too that the department is continuing to review its Conservation Area Plans to ensure that our wonderful built heritage is recorded and protected.
Transport and Highways
We said that we would support the single, borough-wide parking zone and we have whilst others have chosen to take the financial gain offered by zoning. For many residents this is one of the great benefits to living in Kensington and Chelsea and means that any resident can park anywhere in the borough. Now visitors can expect to see pay-and-display parking upgraded to substitute payment by phone for high-maintenance pay- and-display machines.
Our public realm remains of the highest quality with proper planned maintenance programmes and top- quality design.
We continue to lobby for a Crossrail station in the north to unlock the regeneration possibilities of the Kensal gasworks site and to support TfL’s plans for a Crossrail station in Chelsea. Although this latter project is controversial, it offers the chance to bring 5,000 households within a ten-minute walk of an Underground that will link to all parts of the Capital and beyond. If Chelsea is to remain desirable to residents of the future it needs to be less congested and better served by good quality transport infrastructure. We can all identify parts of London that have turned their back on transport improvements in the past and they have not prospered. The department continues to work to upgrade street lighting and to improve cycling and school travel safety.
The Environmental Health Team has been working hard on our Code of Construction Practice which seeks to cut the noise from construction sites at weekends. In addition to continuing to pursue bad landlords and bringing properties which are in disrepair back up to standard, they have also recently published our latest Air Quality Action Plan which will help us to cut air pollution – often caused by vehicles passing through the borough on their way to other destinations.
Our central team here have responsibility for co-ordinating community safety initiatives with the police and ensuring that the 41 additional officers that we have paid for are responsive to the needs of residents across the borough. They also manage our electoral services, support regeneration and employment initiatives, manage our properties, support our Town Hall staff, collect taxes and communicate with the public and London media.
Mr Mayor I think that all of this points to a dynamic, successful Town Hall focussed on delivery of top- quality services across the borough.
You will see from tables 5 to 10 in the Budget book that Cabinet Members and Directors have also been working hard to establish unit costs in their departments for a wide range of services. It is important that we know what things cost. Where we choose to spend more than other boroughs this needs to be a conscious decision. You can see for example that the annual cost of sweeping and cleansing 100 miles of streets is estimated at £3,423 for a year. We have a large number of visitors and consequently a number of litter hotspots. We score very highly in the Survey of Londoners for the appearance of our streets and the Majority Party decided that this budget should not be reduced.
We have also held down staff pay: tri-borough working has meant a huge reorganisation for many departments with the contingent uncertainty that that brings. Pay has been either frozen or capped at one per cent and we have 20 per cent fewer staff than we did in 2010. I would like to thank our staff for coping with this difficult background.
We are also alert to the need to do what we can to maximise income from better use of our property portfolio. Can I take this opportunity to thank Michael Clark for all his work as our Director of Corporate Property for the last six years and to wish him well in Australia.
There are still things we can do better: I think there are opportunities to improve the monitoring of contracts and to sharpen up our procurement practices and I look forward to seeing the work that I know the Cabinet and Corporate Services committee have been doing on this.
Mr Mayor I had an email the other day from Jeremy in Islington. “I’ve been elected by a huge majority by a lot of Twitter trolls who don’t really understand local government finance anymore than I do” it said. “They’ve asked me to ask you what are you going to do about your massive reserves? Perhaps you could let Robert, or is it Emma or is it Judith know”. And so we dutifully have a Labour amendment about the use of reserves. Never ones for fresh thinking, this is the same amendment they have put forward every year for the last 20, urging the repeat spending of one-off money. This year it’s been essentially drafted by Unite who now seem to do more and more of the Labour Party’s thinking for them. No wonder they brought the nation to the brink of catastrophe. They really do think that if you spend £20m on supporting revenue spending that you then don’t really have to worry about finding an extra £20m every year – not just once – then of course you have nothing left to invest in new infrastructure and your maintenance costs go up and up.
It may however interest the opposition to know that there is a group of 58 councils that between them have a massive £4.5bn in reserves. They are the 58 Labour- controlled councils facing re-election this May. Clearly they don’t fancy facing the voters having nothing in store for a rainy day – so why should we?
The chart on page 25 shows how we anticipate reserves falling over the next three years as capital projects come to fruition. They are also forecast to fall as a percentage of our recurrent spending. Those who criticise our building up of reserves should logically acknowledge that their loose approach to revenue spending would have meant far less resource available for new school buildings, parks renovations, leisure centres and libraries. I look forward to hearing the Opposition explain to the public why they have cancelled the capital investment programme in order to prop up unsustainable revenue spending for a couple of years until, once again, there is no money left. They really do need to master the basics of finance.
Mr Mayor, my Cabinet colleagues have worked hard to manage their budgets through some of the biggest financial convulsions that this Council has ever faced. I am immensely grateful to them and the officers who support them in this. I would particularly like to thank Nicholas Holgate and his team in finance for thinking hard about how we can do more with less, prioritise our services and largely protect the front line. Inevitably this has meant difficult and sometimes painful restructuring of departments – sometimes across the three boroughs and sometimes across two. That strain has been compounded by the difficulties around managed services. Bringing data platforms together across three boroughs was never going to be easy and that has proved to be the case. I am particularly grateful to officers who have coped with this additional complication to their lives.
The end result of the pain of restructuring however is that we have broadly been able to maintain high-quality services and a dynamic capital investment programme. Through careful control of costs, the sharing of many back-office operations with our two neighbouring boroughs and imaginative use of our property portfolio, we have managed to weather the storms of the national deficit reduction programme without damaging the interests of our most vulnerable residents.
We have made the Council more efficient, balanced our budgets, funded our pension scheme, saved money for the future, protected our voluntary sector and continued to provide good high-quality services that are constantly being improved, whether we talking about libraries, parks, sport or social care for older people. Our residents recognise this and I invite the whole Council to do so too.
I commend the budget to the Council.