Budget speech 2017

Cllr Paget-Brown’s Budget speech Wednesday 8 March 2017

I am delighted to propose the Budget for 2017/18. In doing so I would urge colleagues and the public to study the excellent accompanying document which sets out how this Council accounts for the £409m revenue expenditure which we will undertake in the coming financial year and almost £400m of capital spending over the next four years. How we spend that money is an important determinant of the character of the place in which we live and an indicator of a Council that seeks to create opportunities for everyone to succeed and to shape a borough that is one of the best places to live in London.

In this Budget, we set out our financial proposals for the current year and seek to explain how we will weather the storms that have battered local government for too long. None of this would be possible without the enormous contribution made by our officers. I want to thank them and in particular our Town Clerk, Nicholas Holgate, for the huge amount of thought that they, and he, give to managing this process. Politicians set the direction of travel, but officers have to have sensitive ears and an aptitude for problem solving if they are to satisfy their Cabinet Members and Council Scrutiny Committees. Occasionally they need to be the harbingers of bad news or to report difficulties uncovered. When this is the case, our officers step forward with proposals and plans which mean that whatever the frustrations – however close to or far from home – the show goes on.

It is traditional to say a word or two about the wider political context in which local government in general and Kensington and Chelsea in particular finds itself operating.

Last year we were still digesting the consequences of the surprise Conservative win in May 2015.

However, that pales into history when the momentous events of the last twelve months are concerned. In London we had a Mayoral election which saw a change of regime at City Hall. After eight phenomenally successful years as Mayor during which he reduced his share of the Council Tax by 10 per cent thereby saving the average Band D Council Tax payer some £500, Boris Johnson gave way to Sadiq Khan. Mr Khan made a number of election pledges which he is already finding it hard to fulfil. Freezing fares, stopping Tube strikes, building 80,000 homes a year (with 50 per cent affordable) and not reducing neighbourhood policing are but four. We wait with interest to see how he will square this self-imposed circle, but hard pressed London residents should not expect to see a falling precept anytime soon.

At the national level, shortly after the Mayoral election, we had the EU referendum result which resulted in the resignation of the first Prime Minister to stand by his word that the British people would have a referendum. Whether you were a supporter of Leave or Remain, there can be little doubt that the unelected Commission had very little interest in trying to accommodate a more flexible EU and was therefore determined that any significant re-negotiation should not be entertained. An EU which is not under proper democratic control and which finds it hard to hear and respond to critical messages leaves itself liable to fissure.

Meanwhile the Labour leader, elected just a year before by enthusiastic activists could not summon the same level of support from his own MPs who resigned in droves. They know that they owe their position to the votes of ordinary people – not just party activists. Sadly Jeremy Corbyn, couldn’t make Castro’s funeral, closely watched as he was by the British people, mired as they are in false consciousness.  So he sent
Emily Thornberry.  Emily explained on the BBC that while it may be true that the Castro regime machined gunned families fleeing the socialist paradise by boat, the Cuban Health Service is wonderful.

Perhaps it is Emma, perhaps it is.  Sorry did I say Emma, I meant Emily.

Meanwhile we had a new Prime Minister and Chancellor with a determination to focus on those “just about managing”. Their opinion poll lead over an incoherent Labour Party, clearly failing to manage at all, is unprecedented.

November saw the election of Donald Trump following a campaign which simply debased politics.

In Kensington and Chelsea, we have continued to drive economies, to protect frontline services, to manage our property portfolio as dynamically as possible and to bear down on costs. We are getting good at doing this. Working with our neighbouring boroughs saves each of us around £13m a year. I am sorry that our neighbours in Hammersmith and Fulham appear to see only problems with tri-borough working and do not see the benefits of working together to improve services to vulnerable older people, to protect children and to improve educational infrastructure. The sovereignty guarantee gives each Borough the opportunity to vary its policies and to spend on services as it sees fit.

Residents across Kensington and Chelsea can be proud of our outstanding OFSTED report on children’s services with its “Focus on Practice” model of social work, our relatively low caseloads for social workers, our sustained support and protection of the voluntary sector, continued, unique help for people with moderate care needs to forestall hospital admissions and acute crises. We were also greatly heartened by the commendation of H M Probation Service of our Tri-borough Youth Offending Service.

Our schools continue to deliver excellent results. Of the 38 schools based in the Borough 95 per cent are judged to be “good” or “outstanding” by OFSTED. The attainment gap between those on free school meals and those who are not is the smallest in the country. This is a Council that has consistently invested in good teachers, good heads and good school buildings.

In Adult Social Care and Health we have an opportunity to work with boroughs across north-west London and the NHS through the Sustainable Transformation Plan to improve home care and preventative services thereby reducing dependence on hospital and acute care. Our public health teams look to improve healthy living, to tackle drug dependency and to reduce the health inequalities between the north and south of the borough.

It is not only our neighbouring boroughs that we work with. The Royal Borough greatly values its partnerships with a wide range of organisations. We contribute a significant sum to our community policing team and I am grateful for the work that they do tackling anti-social behaviour around the borough and providing reassurance to residents. However, the Council is concerned about current Mayoral plans to re-organise policing in London and to combine command units. In our case, it is proposed that we should share a command unit with Hammersmith and Fulham and with Westminster. Given the huge challenges involved in policing the West End and the national institutions based in Westminster, it is likely that the needs of our borough will on occasions find themselves taking second place to the demands of central London. This is a major source of concern and we have expressed our firm opposition to the plan directly to the Deputy Mayor for Policing, as has Westminster City Council.

We also have valuable partnerships with the voluntary sector up and down the borough in so many areas and, once again, the Council has set out to protect their overall Budget. I am grateful to the organisations that work with us on behalf of residents and believe that there can be very few local authorities anywhere where the financial protection offered to the sector over many years has been as robust.

Just over a year ago, this Council voted to provide support to refugees from Syria. We promised to help 50 but I have to report that progress has been slow. We agreed that it would not be right to allocate scarce Council housing as this would merely displace others with real housing need, so we looked to other property owners to see if they could help. Finding self-contained flats with their own entrances as required by Home Office regulations has not been easy. To try and accelerate the process I am pleased to announce today that the Council will shortly meet the Welcome Committee to see whether we may be able to unblock things with some financial incentive to help meet high rental costs in this borough.

We also have an aspiration to ensure that this is the best place to live in London. Our careful management of resources has allowed us to invest sustainably in our parks and our public realm generally. We have once again received 10 Green Flags for our parks and cemeteries.

Our poll of 1,000 residents found increased satisfaction from residents on waste collection, street lighting, street cleansing and parks and open spaces. The Royal Borough Environment Project goes from strength to strength, setting up community kitchen gardens, greening unattractive and neglected corners and giving residents a chance to grow their own vegetables. It has also been improving the public realm in places that get forgotten such as railway bridges. Have you driven over Ladbroke Grove railway bridge or Golborne Road bridge recently? You will see neglect turned into loving care. Likewise Cultivating Kensington & Chelsea is a social enterprise working out of a set of greenhouses on land donated by TfL at Olympia. This spring they will be selling their plants to fund future schemes. All this, consistently supported by the Council during a time of great financial retrenchment and uncertainty. Finally I note that basement developments are in steep decline: 158 permissions were granted in 2016 the lowest since 2011.

Let me turn to new housing. The London Plan sets every borough exacting targets for housebuilding. This is a real challenge in a borough where land is both scarce and expensive. It is why I have told the new Mayor that the Crossrail station in the north is critical if we are to meet our targets and he acknowledges this. However, we have one other opportunity to create additional housing and that is by re-engineering some of our own estates which are reaching the end of their natural life. As buildings erected in the 50’s and 60’s become expensive to maintain and patch up, we can do better. Our ambitions to regenerate are sincere and well-considered. We aspire to build homes where people know their neighbours, have shops and places to work around them and where local residents who don’t have a chance of purchasing a property outright in the borough can share their ownership with a housing authority such as the Council. It may mean taking the densities up a bit but the mansion blocks of South Kensington and Chelsea designed in age before lifts were commonplace are hugely desirable and we should be able to offer something similar to residents in the north. I am intrigued by some of the new housing going up in other parts of London and also aware that whenever we talk to residents about regeneration, one of their main concerns is that as tenants and leaseholders they should have the right to return to the neighbourhood and friends that they know. Our offer acknowledges this and no Council tenants or resident leaseholders will be forced to live elsewhere unless they choose to do so. That is not a commitment made by many of the Labour boroughs undertaking extensive regeneration schemes.

In this borough, of course, we have had Labour members claiming that our Council is “social cleansing” the borough.  That they can’t come up with a single victim of this vicious cleansing is not just beside the point, it is utterly irrelevant. What is important is submission to the orthodoxy and repeating the lie. But, over the years, we have learnt to ignore the attacks on our personal morality, our humanity, and just to get on with the job

Many of our residents may be asset rich but many are cash poor. That is why we have always opposed higher property taxes as advocated by the Liberal Democrats and Labour parties at the last election. Council tax is intended to be a contribution towards the cost of running local government services, not an additional tax on property values. For the last eight years this Conservative Council has not increased Council Tax. We have re-organised, economised, shared services and thought creatively – all to avoid reducing frontline services and putting the tax up at a time of hardship for many.

This year, as underspends fall, and certain services show the signs of strain, we believe that it is right to set a modest increase of 1.9 per cent. We will still have the 5th lowest council tax in England and, of course, the council tax only accounts for about 19 per cent of our total income. Some have said with the strain on adult social care, why do we not also take advantage of the new power to increase the precept? We have judged that at this stage we do not need to. Our current budget for looking after vulnerable adults is adequate to the task – although we may have to revisit this in future.

Because we have managed budgets prudently we are able to make provision to avoid sudden and harsh changes, sometimes phasing reductions in spending over a long period or signalling our need to make a reduction well in advance. That is why we are concerned at the recent re-valuation of business rates. This is another hidden tax levied centrally but collected locally. Most people think that the borough sets the business rates but of course we do not. In our borough, retail is an enormously important sector. The business rate is linked to rental values but this discriminates against small and independent borough shops. Big chains can pool their wins and losses nationally but valuable local shops, often of great community benefit, cannot. That is why I have written to the Chancellor urging him to consider modification and exemptions for smaller shops where either square footage or turnover is below a certain threshold. We will study today’s Budget announcements on reliefs carefully to see how much they may assist local businesses, but in general terms, changes should be dampened and phased in more gently or high streets in high-value areas will become even more cloned with chains as independents drop out. A glance at our own High Street will tell you of the pressures coming from online shopping, lack of delivery space and expensive overheads.

Retail can always benefit from improved transport and so can residents in poorly served parts of the borough. That is why I am very pleased that the Cabinet recently agreed to Network Rail’s request for us to commission and fund a GRIP (Governance for Railway Investment Projects) study in support of our aspiration for a new station at Kensal Portobello on the Elizabeth Line. Development of the last derelict site could be transformative, with a new station leading to thousands of new homes, additional jobs and improved access for residents of North Kensington. I am delighted that the new Mayor is supporting us and hope that the opposition here will reconsider its defeatist view that the development of Old Oak Common means that there is no room for a station in our borough and that we should stop campaigning for it. Please join us in making the case for North Kensington.

Similarly West Chelsea is also badly served by public transport. The nearest Tube stations are a long way away at Sloane Square or South Kensington which means that commuting is slow, air quality is poor and West Chelsea suffers. We have remained united in our support for a Chelsea Crossrail Station and I was proud of the stance that the whole Council took on this last summer, taking a view of the long-term interests of Chelsea. However, development cannot be at any price. As the Government urge TfL to reduce costs and re-work their business case, we have always been clear that over-site development intended to produce a quick return would not be acceptable to Chelsea residents or to this Council. The station as originally envisaged with an entrance in Sydney St, would pay for itself through improved access to work, more housing opportunities as properties are redeveloped, increased footfall in parts of the King’s Road that need it, better and speedier access to our world-class hospitals. London is a world-class city and Chelsea a key part of it. How strange it would be not to build a station where people want to go and where transport considerations justify it. But, above ground, it must respect the scale and character of Chelsea. We await the next round of consultation promised for this summer.

You will see when you turn to our capital programme, a wide range of schemes of which we can be proud. These include a new Barlby Primary School along with the borough’s first school for children with special needs which will mean that they will not have to leave the borough, a new school at Marlborough, an older peoples’ hub at Westway. We are, let me also point out, going to build a brand new library in North Kensington. Purpose built, accessible, attractive, well-stocked. The old, cold, difficult to access current library will be leased to the neighbouring school who because it is in such a convenient location are prepared to pay a premium over the market rate to get it. We had a few protestors who lost no opportunity to pass over a win-win opportunity to misrepresent the Council as hard as they could. Following their petition to the Council, I invited them to come in and talk to us about the configuration of the new library but somehow they were not very interested! Other people have been however, and more than 650 responses were received to our consultation. Perhaps the enthusiastic supporters of Mr Corbyn with their love of direct action rather than effective action are more comfortable with a “lose-lose” scenario.

The capital programme also includes plans to refurbish our halls and the civic entrance which have received no attention since the building opened 41 years ago. I hope that with the right technology in place and better catering facilities we will see some significant income generated by letting out the halls and an improved sense of place for people who visit these buildings for a variety of purposes.

I expect our capital resources to decline in future years as planned schemes are built out and savings and underspends become more difficult to deliver.

We also continue to adopt safety-first approach to investments mindful of the difficulties which many less careful Councils have faced when exposed to market volatility, investment vehicles and ill-considered risk. I am pleased to report that our pension fund is 103 per cent funded.

Not every area of the Council’s activity is without challenge. Our officers have had to contend with the challenge of Managed Services and improvements have been painstakingly slow with only small steps forward and lots of patches. It is clear that in areas such as payroll, HR, accounts receivable and pensions there are still a number of issues to resolve and a degree of robustness that is elusive. We will be taking a long hard look at the best way forward over the next few months.

Too often in the age of social media, trolls have free reign to exhibit their ignorance and prejudice from behind a wall of anonymity. Assertion rather than persuasion is the name of the game and pluralism and the inter-play of ideas and debate is marginalised. This is not good for politics or free speech. It’s even reaching here. Madam Mayor only the other day on the front page of the local paper, the Council was accused of waging “class war” by a senior Councillor who chose to remain anonymous. Who on earth could that be and why so frightened of revealing herself (or himself)?

So, to conclude Madam Mayor, the minority party has not even submitted an alternative budget this year. Merely an ill-informed diatribe with no indication of what services they would have to cut by failing to take advantage of a good opportunity to maximise income from an old, inadequate library building. Their amendment prefers to talk misleadingly of a “massive transfer of land, resources and buildings from the public to the private sector”.

The reality is that this is a Council that is delivering a new library, new school buildings, an adult social care hub, a new building for the voluntary sector, restored parks, improved highways, a new leisure centre and new academies. It has focussed on procurement with a Cabinet post dedicated to the issue, implementing a wide range of measures following an exhaustive report from the Scrutiny Committee. We are the Council giving the poorest children the greatest opportunities in London, seeking to build new and better homes for our residents and not constantly undermining the case for regeneration as too many on the opposition benches like to do – and in so doing removing hope for people living in temporary or inadequate housing. Rather than a massive transfer of land or buildings  – residents are able to see careful nurturing and improvement of what we have inherited from previous generations. That is good for everyone in Kensington and Chelsea, good for our successors – but may be not so good for those who have set out to hijack the Labour Party, who despise aspiration and who are shameless in misrepresenting a Council that is working for everyone.

I am therefore pleased to present the Budget for 2017/18. I urge the Council to support it.