Tuesday, November 16, 2010

Five Year Plan and other Budget Temptations

In a Council there is always the tension between officers and Councillors. The Officers want more services because they feel they know best and it can enhance their status. Councillors want more services at no real cost because it puts the Council Tax up.

At St Neots Town Council level the temptation is to protect jobs and protect services. Whilst they had a piece of good luck over the early annexation of South Eynesbury and Love's Farm the underlying rise in the net budget was from £803,576 to £858,757. An increase of £55,181 or 6.8%. The problem is can the Liberal Democrats control these costs? The lack of any meaningful Medium Term Plan with the finances causes concern. Not only with me, but the external auditor put this as a high priority in the 2008/09 Audit report.
In auditing the 2009/10 Annual Accounts the external auditor had another go at the Town Council.
The Town Council gave a slightly better response this time round. Mainly because they didn't do anything last time round.
"You've got to know where your coming from to know where you are going to."
The first point the Town Council needs to take on board is where it went wrong with the previous Forward Plans. The main faults (these were massive) were:

Aspirations were included without funding. Any project or objective that makes it into the Forward Plan must have an estimated cost. The plan is an intention not an aspiration. The Town Council seems to be looking towards aspirations rather than definite plans.
Costs were simply left out. The original Forward Plan simply left costs out. An example: Ending the Grounds Maintenance contract and starting the Councils own team was underestimated by £95,000.

The result of including aspirations and leaving costs out was the Town Council got into massive financial trouble when the true costs became apparent.

If the Forward Plan had included estimates for these costs then the financial crisis could have been forecast and the necessary action taken. HDC is going to abandon services and costs onto the Town Council and these must be estimated into any Forward Plan.

The basic problem with the last budget was the non-inclusion of any significant capital budget. Whilst the basic running costs of the Town Council were covered, leaving out capital costs leaves the Council with little alternative but to raise Council Tax to pay for these improvements.

With more new homes on the horizon, the 8th December 2010 of the HDC Corporate Governance Panel is crucial in the Council Tax levels for St Neots. A rise in numbers spreads the load of the precept wider. The balance to this rise is the continual population fall in St Neots.

The main temptation, which needs to be resisted, is to use reserves to prop up this budget going into an election. This will only put off tax rises into the future. What is needed from the Town Council is a proper Forward Plan with a properly costed Medium Term Plan and using these tools a proper budget should be arrived at.

The Conservative Opposition can then come forward with a properly costed alternative which can form their manifesto for the elections.

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