Council Tax Base announced

At the meeting of the Corporate Governance Panel due on 8th December 2010, the Panel will consider the Council Tax base for 2011/12. This is the number which is needed to calculate the Council Tax rates.

The new calculation for the whole of Huntingdonshire will be 59,460 up from 58,580. This is the equivalent of 880 extra Band D properties. This is an extra Council Tax income of £109,270, at the average of £124.17 each, for HDC over 2010/11.

For St Neots Town Council the numbers are smaller. The number is 10,565 up from 10,195. This is an increase of 370. If the current Town Council tax level of £84.23 is kept this would mean an extra income of £31,165. Or if the budget was kept at £858,436 this would mean a Council Tax level of £81.25. A decrease of £2.98 or a 3.5% decrease. Looks good but paid for, mainly, by new housing.

Town Council Draft Budget up for discussion.

I was surprised by our Town Council. Rather than just sending through the budget details they also sent through the Working Papers on the proposed Base Budget. These papers give an explanation as to the spending decisions. A note of caution. These are the preliminary numbers and can be added to or taken away from depending on the decisions taken in Committees and Council.

For the Town Council this is a big thumbs up for transparency over this budget. It would be a even bigger thumbs up if the Town Council had published these via its own website.

So what are the base numbers?

The base budget for 2011/12 is looking to be £858,406. This is down £321 on the 2010/11 precept of £858,727. With the Council Tax base due out next week, this could allow the Liberal Democrats space for a small decrease in their portion of the Council Tax. But there are many other factors which includes HDC abandonment of services and any other Conservative Stealth Taxes on the Town Council (therefore the St Neots Council Taxpayer) which still need to be resolved.

The standstill budget has been achieved by:

Central Administration
A long overdue cut in the number of Council Staff. This saved £63,521. To be taken away from this is the new position of Accountant which costs £12,600. The Town Mayor didn't mention in his annual report. This equals a cut of £50,951.

Other budget cut backs and a loss of income from HDC plus a near tripling of administration charges for the Swimming Pool Trust (accounts 295 days late and counting) means the cost of Central Administration has fallen by £58,511.

Other Costs and Income (Loans and Interest)
This cost has fallen by £5,472 mainly due to higher interest rates on larger reserves.

Cemetery and Churchyards
The cost of this has fallen because Burial Charges are down and the £5,000 allocated for the cemetery extension isn't needed in 2011/12. Net cut in expenditure of £6,600. Taking out the cost of the War Memorial will make Cemeteries and Churchyards cost neutral.

Play Areas and Open Spaces
These cost are down by £1,985 mainly due to a cut in Repairs and Maintenance.

Depot and Operational
An increase in staff costs by £16,202 is offset with cuts in Ground Maintenance - £10,000, Vehicles - £4,300 and Rent and Rates down £2,000.

Community Services
These costs are up £26,653. This is wholly due to the abandonment by HDC of the Public Toilets and the taking up of this service by SNTC. The extra cost is £28,000 and is a Conservative Stealth Tax on St Neots.

Grants and Donations
At a standstill.

Highways and The Environment
The £5,355 decrease is mainly due the the build up in reserves on Traffic Management Schemes. The £5,405 carried over from last year will be used instead. The only problem I see with this is as the budget goes down and is harder to resurrect in future years. Better to keep the money rolling in and deal with excess with virements.

Eatons Community Centre
The net expenditure has risen by £5,678 to £28,603. Whilst the cost base was predicted fairly accurately, the lack of income is what is pulling this centre down. The purpose built pre-school has had no takers on a full-time basis. Hall booking income is less than budgeted. Whilst this is entirely predictable, this is not as wild a forecast as Cllr Barry Chapman made.

Neither party comes out of the ECC looking good. Both parties supported this venture.

With the Town Council informing us ECC needs to break even this year, the budget doesn't allow for this.

Town Promotion
This cost centre has had a large drop with the Town Centre manager post deleted. With the post goes a £5,500 from the Town Centre Initiative. What has crept in here is a £10,000 splurge on the Riverside Festival. At its October meeting the Operations and Amenities Committee decided not to have a budget for Sunfest.

Are the Town Council Officers getting around this decision by making it a budget decision? Seems so!

Capital Projects
Just an extra £45,000 on the Forward Plan. This has yet to be finalised. Whilst welcome, there are no provisions for other capital projects. The Priory Centre will need loads of money. Play Areas need to be constantly renewed. Vehicles and other machinery will need to replaced. All this takes money and, I feel, the Town Council is ignoring these problems. This will cost the Council Taxpayer dearly in the future as problems build up.

Priory Centre
This has a small increase in cost of £1,698 to a budgeted figure of £97,430. With costs increasing and a downturn in the bar profits this doesn't look like it is going to break even in 5 years. The budget doesn't indicate this.

What is missing?

£60,000 for the new boiler system at the Priory Centre.

£? for the movable seating at the Priory Centre.

£? for the legal costs and potential fine.

£? for taking over abandoned HDC Services

In conclusion
This is the second year running that St Neots Town Council has produced a budget which is a fair reflection of the cost of running the Town Council. In the previous budget I said this was deficient in capital spending. I still feel this is a problem and the Town Council should be looking for a £100,000 to set a side each year to build up resources for capital spending. There is also little room for manoeuvre if the District Council abandons services.

On the whole it is the second good budget by the Town Council. Not too sure it makes up for the casino budget and the 4 wasted years. The Town Council is on the right track. Whichever party wins in 2011 they have a Town Council set for the future. Whether St Neots residents want the services the Town Council delivers and will continue to pay the costs is a different matter.

Old Town Council Budget explanations

In the run up to the 2001/12 budget I thought I would re-publish some of the old budgets explanations and why they were wrong.


The first is the 2008/09 budget.

From the outset this looked a good budget to our Liberal Democrat Councillors. But it wasn't. In the report on the 2008/09 accounts the Auditor found that there was little detail on how this budget was formulated. This meant this was a budget whose figures could not be relied on.

Whose fault is this? Well, the Deputy Town Clerk, at the time, has much to answer for. The former Town Clerk had the responsibility of supervision of the Deputy Town Clerk. The Chairman and Deputy Chairman (Cllrs Giles and Thorpe) of the Policy and Resources Committee were in charge of the budget process. [7] [9]

What was missing from this budget?

The Council decided to cancel most of the Grounds Maintenance contracts and start its own department. This is known as bringing the service in-house. Despite a detailed study that should have identified the costs involved these weren't included into the accounts. This totalled £95,000 in costs over a full year. As this was started during the year then roughly £55,000 that should have been added to this budget.

The Capital Receipt of £60,000 is a large problem. The reason why it is a problem is the amount against reserves. The inclusion of a £60,000 against a reserves of say £16 million is minimal risk to the budget if things go wrong. In the case of the Town Council the inclusion of a £60,000 Capital Receipt against balances of  virtually zero is a gamble and a gamble that didn't pay off.

This casino budget caused many problems for the Town Council. The inclusion of the extra £55,000 Ground Maintenance costs and the exclusion of £60,000 Capital Receipt would have given a budget of £874,873. This is up from £695,794. That would have been a £179,079 increase. That would have been a 25% increase in the precept or a 24% increase in the Towns portion of the Council Tax. This would have been politically unacceptable for the Liberal Democrats and would have outraged the Town.

So instead of a proper budget of £874,873 the Town Council passed a budget of £695,794. This caused many problems. During the financial year this underfunding led to the cancellation of many projects which should have gone ahead. From the cutting of the essential Town Plan to the Play Area Upgrades. This Town Council lost its way on a big gamble and lost. The gamblers were those in charge and time and again the former Liberal Democrat leadership of Cllrs Giles and Thorpe are those who gambled and lost. This is bad  government.

The second explanation is about the 2009/10 budget.

This budget was formulated (link to budget document) against the realisation of the problems caused by the 2008/09 casino budget.

In January 2009, the Liberal Democrat run Town Council had a massive problem. They weren't too sure how much money they had and were not sure of the whole financial situation. The Town Council Leadership (Cllr Giles and Cllr Thorpe) took a series of emergency measures. This left the Forward Plan, which the Town Council had passed less than 8 months earlier, in tatters.

So what did they dump?

Town Lottery (Saved £10,000 in 2008/09. Money transfered to a Traffic Scheme the County decided that wasn't important. The Town Council decided, without professional advice, that it was necessary.)

Play Areas Upgrade (Saved £40,000 in 2009/10. £55,000 in 2010/11)

New Cemetery (Saved £17,000 in 2009/10. Likely £29,000 from 2010/11 onwards)

Town Plan (Saved £30,000 in 2008/09. Money went to prop up the General Reserves. Saved £30,000 in 2009/10)

Town Wardens (No budget, so not happening)

Council Office Refurbishment/One Stop Shop (Saved £50,000 in 2009/10. £30,000 went to prop up the General Reserves. £20,000 to create a budget to fit out the Eatons Community Centre.)

Market Stalls (Saved £5,000 in 2008/09. Money transfered to fit out the Eatons Community Centre.)

By dumping all the above projects the Liberal Democrat leadership was able to prop up the 2008/09 Budget and have some money to put towards the fit out of the ECC which hadn't been budgeted for. This is partly why the Liberal Democrats were able to keep the rise to 5.05%.

In itself this was a major foul up by the Liberal Democrat leadership (Giles and Thorpe) and has gone pretty much un-noticed by residents.

So why did the Liberal Democrat leadership (Giles and Thorpe) get into this mess? Although they were Chairman and Deputy Chairman of the Policy and Resources Committee they seem to have little idea on what was happening with the finances. Below part of what the Policy and Resources Committee is for:

So what were the main problems that arose during 2008/09?

Ending the contracts for much of Grounds Maintenance and starting a new department cost this Town Council dear. During 2009/10 budget process this was predicted as an extra cost of £89,332 more than in 2008/09. This was despite the assurance this scheme had a detailed study.

The ECC was not properly funded and "mission creep" and other changes were not accounted for in the scheme. This led to a financial crisis which needed more money.

In the previous article I pointed out the Liberal Democrat leadership of Giles and Thorpe had understated the 2008/09 precept by £180,000. This casino budget caused problems for 2009/10.

After the January cuts in the 2008/09 casino budget the cuts continued into the 2009/10 budget process.

The £36k decrease in the Central Administration is because they only budgeted for a new Town Clerk for 6 months. So Giles and Thorpe had decided to under staff the Town Council for 6 months. If they employ another full-time Town Clerk with the same staff structure this will mean an increase for the 2010/11 budget of £36k.

The Other Costs/Income fall of £33k is to do with the loss of interest from the use of those reserves to pay for the ECC.

Because Grounds Maintenance was brought in-house this has added costs to the Depot and Operations section but has dropped the cost of both the Play Areas and Churchyard section. But this still represents an increase of £89,332 in costs over 2008/09.

The upping of the Promotions budget to £46k from £24k has much to do with the under budgeting in previous year.

The Town Promotion budget increased from £6k to £23k is to do with the inclusion of the xmas lights from the reserves budget.

The Priory Centre budget was cut by £26k which was a political decision.

The Capital Budget was a decrease from £188k to £48k meaning £140k reduction. Whilst this looks good cutting capital programmes will mean this will need to be reinstated in the future. To reinstate above £48k will mean tax increases.

The Town Council did put £25k aside for the running costs of the new ECC.

It should also be noted the 2009/10 budget left out Play Area Upgrades and Town Plan which saved another £70k. The leaving out of Play Area Upgrades will mean this will become a cost further down the line.

The 2009/10 budget was a slashing budget which the Liberal Democrat leadership of Giles and Thorpe used to rip up to tatters the Forward Plan and trash many of their programmes. The ECC carried on as the money pit. This budget has stored up problems for the future which can only be resolved by more tax rises. Of course the Liberal Democrats are hoping the 2011 annexation of parts of Eynesbury Hardwicke and St Neots Rural with all the extra housing will ease these budgetary problems.

SNTC Budget 2009/10

Reserves 2009/10

Forward Plan

Thirdly the 2010/11 budgets.

I went down to the Town Council offices to collect the draft budget. Only to find there are two draft budgets! I've scanned in the summaries for Option1 and Option 2.

There has been a bit of rearranging the deckchairs on the Titanic. The first thing to point out is neither option has regard to any provision for public toilets or the Eaton Socon Car Park. The second point is some of the under budgeting in the 2009/10 budget have come back to bite this council. I blame Giles and Thorpe for this.

Option 1
This draft budget increased from £803,576 to £892,997. An increase of £89,421.  This is equal to £87.59 band D or  + 4 pence increase over 2009/10. The main cost increase is a massive £67,996 on Central Administration. The vast majority of this is a hike in salaries of £67,991. About half of this of this increase is due to the under budgeting for the Town Clerk in 2009/10. The other part I don't know. Other increases are: Priory Centre + £13,542; Capital Projects + £14,751.

Option 2
This draft budget increased from £803,576 to £858,727. An increase of £55,151. This is equal to £84.23 band D or -£3.32 decrease on 2009/10.

The main changes to Option 1 are:

Capital Projects are now zero. -£26,500
Priory Centre -£2,000
Eatons Community Centre -£4,650

The changes at the ECC are strange. (ECC Option 1 + ECC Option 2)

Staff salary: Option 1 = ££ / Option 2 = £9,000
Hall Hire: Option 1 = £25,000 / Option 2 = £40,000
Pre School Lease: Option 1 = £12,000 / Option 2 = £6,000

In my opinion there are three problems with these budgets.

The first problem is central staffing. We seem to be in the savage circle. An increase in the central bureaucracy without a massive increase in services delivered to the residents. The Town Council is over staffed and needs to be cut back rather than keep increasing.

The second problem is the budget for the Eaton Community Centre. Option 1 has an entry is just ££ for staffing. So the Town Council has made no budget for this section in Option 1. This is wrong. An estimate should be made and a figure entered. There are major differences in the estimates on income and on the lease for the pre-school. The assumptions behind these figures should be the same. The lease cannot be £12,000 in one option and £6,000 in another. Nor can you have hall hire income at £25,000 in Option 1 and £40,000 in Option 2. There should be only one view on these income items, not two.

The third is there is not much money for capital projects. This Council needs to keep setting aside large amounts of money in a capital programme to renew the Town Council facilities. Otherwise these facilities will continue to deteriorate and will cost more money in the future.

What we should remind ourselves is this budget would have been much worse if it wasn't for the extra £89,000 from the annexed areas. If we took the new council tax base and applied it to the old budget we would be paying £78.82.
Option 1 we would be paying £87.59. An extra £8.77 or 11%.
Under Option 2 we would be paying £84.23. An extra £5.41 or 6.4%.

Whilst this is not a cost increase for 2010/11 it should be remembered that Grounds Maintenance is still costing SNTC £83,000 more than in 2007/08. This is a major underlying cause of the budget problems.

In conclusion, this budget is partly a carry over from the 2008/09 casino budget which left SNTC in a right mess. What is troubling is the lack of funding for a capital programme or indeed a capital programme. But what is most troubling is the salaries increase of £67,991. We should be reducing the central bureaucracy instead of increasing it!

These draft budgets are due for discussion at a Special Town Council Meeting on 15th December 2009.

Documents
Option 1 Summary
Option 2 Summary
ECC Option 1
ECC Option 2
Salary Increase

The demise of Priorities or a large bill for SNTC

St Neots News and Crier - 18/11/2010

In an article about the withdrawal of funding by HDC for the Town Centre Initiative there was a bit of a revelation. John Davies said The Priorities newsletter may have to go.

I know very little about the TCI but I have been informed that SNTC pays 25% of the costs of Priorities Magazine. Obviously it has been the HDC Council Taxpayer who has been funding the other 75%. This is important. It means the Council Taxpayer - one way or another - has been paying for Priorities magazine.

This poses a problem for St Neots Town Council. To regain Quality Town Council status it needs produce a newsletter 4 times a year. With the withdrawal of funding this could mean a potential bill of an extra £23,400 a year.

UPDATE: I see from the Town Council budget proposal the 25% share is £3,690. This would mean an extra £11,070 would have to be found. Much less than the £23,400 I thought the potential bill could be.

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.

Should the Town Council cut their budget by 25%?

With other councils having to cut their budgets by 25%, should SNTC do the same? CCC and HDC are both cutting services and employees to keep the Council Tax level. Some of these services could well be useful to St Neots. Who in St Neots will be able to take up these services?


St Neots Town Council will have to take up some of these services and run them. What I feel is this shouldn't mean a rise in Council Tax to pay for any of this. What SNTC should be doing now is plan to cut its budget by 25% so it can absorb any services that need to be continued.

If St Neots doesn't plan to cut its budget there will be problems when services are cut or closed by HDC which St Neots wants continued. Otherwise the Town Council part of the Council Tax will rise and rise dramatically.