What is happening to the reserves?

In the report to cabinet on the 2012/13 budget, the minimum level of reserves held by HDC has risen from £3 million to £4.5 million. An increase of £1.5 million.

I do have to scratch my head as to why there is an increase in reserves?

The fundamentals haven't changed. The economy is bad and the same goes for Europe. So not much has changed. The reports says:

7.0 RESERVES
7.1 Overview and Scrutiny felt that it would be prudent to increase revenue reserves even further than the uplift from £3M to £4M proposed in the draft budget. The Proposed Budget/MTP is therefore based on not allowing reserves to fall below £4.5M.


(What the OSP actually said: Given the identified risks and the unknown factors the Panel questioned whether the proposal to increase the Council’s minimum level of general reserves from £3M to £4M was adequate. Reference was made to the fact that the New Homes Bonus represented 25% of the Council’s predicted income in 2015/16 and this could pose a significant risk. Having noted that the Auditor had previously suggested the Council should reduce its reserves, Members were generally of the opinion that it would be desirable for the Council in the current economic climate to hold greater reserves. Whilst this would place a burden on the savings programme in the short term, the Panel agreed that the a minimum level of reserves should be set at £4M and that this should be reviewed in two years and, if it was reasonable, should be increased to £5M. It was also agreed that this should be tested and considered in the forecast report each year and built into the draft budget if necessary.)

So what was agreed in this section of the OSP minutes? Well, the Council should hold greater reserves and the panel agreed the minimum level of reserves should be set at £4m and should be reviewed in 2 years and then should go up to £5m if needed.

When the Cabinet is informed that: "Overview and Scrutiny felt that it would be prudent to increase revenue reserves even further than the uplift from £3M to £4M proposed in the draft budget. The Proposed Budget/MTP is therefore based on not allowing reserves to fall below £4.5M. "


The OSP were looking at leaving any upgrade of the minimum reserves for 2 years. This view have been changed by someone to mean reserves have increased again to £4.5 million now rather than in 2 years time.


7.2 It is very difficult to theoretically calculate the appropriate level of reserves but the following factors are all relevant: 


The new rules that require a positive referendum result before a Council can increase its tax level above the limit set by the Secretary of State has the potential to make it very difficult to replenish reserves once they are used. Reserves therefore need to be sufficient to allow a savings programme to be introduced to replenish reserves before they run out.


That argument is the same as under the capping regime. No real increase in reserves during capping. Only after capping has ended. Accepting the Councils argument means the District Council has not had the right level of reserves under the old capping regime. 


The level of New Homes Bonus is forecast as £6.1M by 2016/17 and although a risk provision of £0.9M has been made there is still potential for significant variations depending on how quickly the world, European and UK economies recover.


The Council has made a risk provision of £900,000. In effect padding out the estimations. What this argument is saying is the even with £0.9m of padding there still needs more money put aside in reserves. The Council's argument just doesn't stand up. If more money is needed then the risk provision should go up. This would cause problems for the Council. Increasing the risk provision reduces the forecast for the New Homes Bonus. This means more savings or higher Council Tax is needed to be found.


2013/14 sees the planned move to the localisation of Business Rates to replace the current Formula Grant regime. There is potential for volatility in the new starting point as well as the variations thereafter. Individual items that could have significant revenue impacts include Planning Inquiries, higher than planned pay awards, significant rises in homelessness, reduced Government spending allocations to Local Government and falling income levels due to recession.


Yes this is all very worrying. Yet none of this argument actually means more reserves. Indeed it is more of an argument for not spending any reserves and saving the whole lot. What increasing reserves does is allows the management not to worry about managing.

There in no valid reason to increase reserves from £3 million to £4.5 million. Even the reason to increase from £4 million to £4.5 million has been found to be false. Indeed minimum reserves should be less than £3 million. Much easier to increase reserves rather than properly manage the finances. 


Of course if this money didn't go to reserves this would allow money to be used to keep the Council Tax down for this year. There is no reason for a 3.5% increase for the next year. 

Eric says!

The Conservative Communities Secretary has a go at Councils over rises in Council Tax. Eric says:



"We are seeing a number of Labour councils (plus Conservative run HDC) acting as referendum dodgers who quite cynically are raising council tax by 3.49 percent in a naked move to dodge the public vote.


"These councils are treating the electorate with contempt. They should have the courage to put their hikes to the vote and justify the tax rises. Instead they are running for cover.


"Freezing council tax is practical help every councillor can offer their constituents.


"Councillors have a moral duty to sign up to keep down the cost of living. Anything less is a kick in the teeth to hard-working, decent taxpayers."


The two year council tax freeze is Conservative policy. But the Conservatives who run Cambridgeshire County Council, Cambs Fire Authority, Cambs Police Authority and Hunts DC seem to have forgotten this promise by their Party at the General Election in 2010.

South Cambs announces Council Tax freeze!

With Conservative run HDC hiking Council Tax by 3.5% it comes as a bit of a surprise that neighbouring South Cambs District Council is keeping freezing its already low Council Tax rate.

With Council after Council freezing their Council Tax for next financial year, the Conservatives need to explain why HDC won't be accepting the freeze money.

Changes at HCCA

I haven't looked the HCCA website for a while and I was surprised at some of the changes.

Firstly, Simon Burton is no longer The Agent. This has passed to a new person on the block - Sarah Carrick.

Secondly, Cllr Churchill is no longer Deputy Chairman Political. So the Conservative Association didn't stand behind him. No one really has.

Thirdly, Cllr Churchill was suspended by the Conservative County group. Yet Ken is still down as a County Councillor on the HCCA website.

Is HDC deluded?

In the report to cabinet on the 2012/13 budget, it says the following:


9.8 The Council believes that local residents will wish to preserve these grants, recognise the Councils need to meet unavoidable inflation (there will be no pay rises again in April) and preserve valued services as far as possible both this year and in future. In order to do this the plan is based on increasing Council Tax next year by £4.34 per year for a band D property (£3.86 for Band C and £3.38 for Band B). This represents a percentage increase of 2.6% of the average District Council tax level, and 3.5% of this Council’s lower tax level.


Of course the Council believes that local residents will wish to pay more for services. That is how it works. Where are the consultations to back up this belief? I can't find one. So this is really a delusion because it hasn't asked the residents.

HDC believes that:

Local residents will wish to preserve these grants. 
Of course residents will want to preserve these grants. 


Recognise the Councils need to meet unavoidable inflation.
I don't recognise the need to meet unavoidable inflation. If something goes up in price then either change providers or cut services. Yes, it is that simple.


Preserve valued services as far as possible.
The Council has not defined what it considers as "valued services". Are these "valued services" what the public wants? or what the Council itself has decided are "valued services"? Take CCTV for example. The public decided through a consultation to scrap this service. The Councillors decided this service needed saving. 

In order to do the above plan this is based on increasing Council Tax next year by £4.34 per year for a band D property.
This is where Council thinking always goes wrong. Just because the Council believes the arguments, as set out above, then the people will pay for these services. I don't think they will. Otherwise the Conservatives will be pushing for a higher rise and a referendum to boot. 


I feel HDC is deluded it if feels people will pay more. If it does then put the whole thing to a vote at a binding referenda.

Is this fair?

When the cinema planning application came up for decision on 19th December 2011, those opposed were given three minutes to outline their objections to the Development Management Panel (DMP). Supporters were also given three minutes. Seems fair! What has come to light is Turnstone Estates had a much larger bite of the cherry when it came to briefing members of the DMP.

In a letter sent to Barbara Boddington, Turnstone Estates said the following:

Therefore Turnstone Estates gave a full briefing to the Development Management Panel on the planning application. Longer than the 3 minutes available to objectors at the meeting.

HDC owns part of the land and leased it to Turnstone Estates. The other part is owned by St Neots Town Council and has also been leased to Turnstone. HDC decides the planning application. All very cosy but there is no way round this. Someone has to give planning permission.

Whilst it is perfectly legal for officers to arrange a "Briefing" of this type, it does smack of pushing the planning application when it is already recommended for approval.

What about the letter from Turnstone Estates? They know they are lobbying by sending this letter and that it should be passed on to the Planning Department. All this seems stacked in favour of the applicant. Normally I'm for the applicant. But not when it pertains to Public Land.

If the offer of a private briefing was allowed to take place then surely those opposed should have had the right to a rebuttal.

A petition to stop a Council Tax increase!

The St Ives Branch of the Conservatives have been pushing a petition against any rise in Council Tax by St Ives Town Council. This is the only Independently run Town Council in the Huntingdonshire Constituency and is up for election this year.

It would seem reasonable to me if the St Ives Conservative Branch was also against all other rises in Council Tax pertaining to St Ives. But they are not. Many of their members are Councillors and Representatives on local authorities which are looking to up their portions of the Council Tax by 2.95% to 3.5%.

So how are the prominent members of St Ives Conservative Branch? Here are some:

Both County Councillors (2.95% increase) are also members of the Cambs Fire Authority (2.95% increase).

As for the District Council:

These 5 District Councillors include Cllr Ablewhite, who as District Council Leader, is proposing a 3.5% increase.

So what we have is a load of Councillors jumping up and down about an increase in Council Tax by St Ives Town Council whereas local authorities they are on are upping the Council tax anyway. This is just wrong.

The Conservatives should remember what was said in the 2010 Conservative Manifesto. To remind them it says:

What is rather ironic is St Ives Town Council is likely to follow the Coalition policy and keep the Council Tax freeze.

So there we have have it. The St Ives Conservatives are against their Town Council raising Council Tax but are for Council Tax increases in other Councils they are on.  All the Conservatives run Councils should be abiding by the 2010 Conservative Manifesto and freezing their Council Tax.