Should Bournemouth Borough Council release more of its mountain of financial reserves?

Bournemouth Borough Council has announced that it will release £23M of its financial reserves to “safeguard services and invest in a variety of schemes” and also “lower council tax by 0.7 per cent to ensure residents will not have to pay any extra this year”. Only time will tell whether the funds being released will actually help the people who are directly suffering under the savage austerity measures being implemented by the government.

Of course any help that the council can offer to relieve the pressure being felt by hard pressed residents within our area is welcome. However, BPACC calls on the council to look at using the abundance of their reserves still left – around £70M – to plug the hole in government funding for charities and support groups, art and community services, road maintenance, subsidised bus routes and services, renovation of school buildings, legal aid, short break or respite care services, disability services such as mobility shops, stopping increases to car parking charges, social care / community transport etc etc etc….

The Council also needs to answer the question why council tax reserves were not made available for the many cuts we have already seen such as the closures of Darracott Day, Malvern, Horizons day care centres or staff cuts at Boscombe day care centre and more recently the proposed closure of Dorset Enterprise.

And lest we forget the cuts / freezes to the wages of many workers employed directly by the council. It can reasonably be argued that as Bournemouth Borough Council is a major employer in the town, cutting or freezing wages or giving below inflation pay increases will have a direct negative effect on the local economy simply because people will be forced to spend less of their earnings within the local community. On top of this, the council has chosen to make hundreds of their employees redundant which has the same effect to the local economy and additionally, due to the unemployment crisis, many of these people will now be in receipt of state benefits and of course no longer paying taxes. A double whammy false economy which although may have a short term positive effect on the council budget sheets, will have long term negative effects upon the local and national economy.

In April 2013, due to the Welfare Reform Act, people will see radical changes to some state benefits:

Bedroom Tax – anyone of working age in receipt of Housing Benefit (HB) who live in Council housing with “spare” bedrooms, will not receive HB for these rooms. This will mean these people will see their HB reduced as shown below and they will be expected to cover the shortfall in their rent out of their JSA – Jobseekers Allowance, ESA – Employment Support Allowance, Working Tax Credits or Child Tax Credits:

  • 14% reduction in Housing Benefit for under-occupancy by one bedroom
  • 25% reduction in Housing benefit for under-occupancy by two bedrooms or more

Council Tax Benefit (CTB) – the government has cut the funding to Local Authorities for the provision of CTB by 10%. It has been left entirely up to local Councils how they cover this budget cut. Bournemouth Council has decided that people of working age, except those on DLA – Disability Living Allowance and some Carers, who receive CTB will pay up 20% of their total bill.

Crisis / Social Fund Loans and Community Care Grants – the govt has localised these loans / grants and the decision making process of delivering them to some of the most vulnerable people in our community is being handed over to the Council. The funding Local Authorities receive from government will not be ring-fenced, nor will there be a ‘statutory duty’ on local authorities to provide a minimum level of service, nor will there be any ‘sanctions’ if a local authority uses the money to plough into other services. Due to cuts they have already faced, Council staff are already under severe workload pressure and it is highly debatable whether more staff will be employed, so it is very likely that this service will be outsourced. Most people are now becoming aware of the problems this can cause with likes of Mouchel, A4E, G4S, ATOS, Working Links who are happy to take taxpayers money but either unwilling or unable to provide sufficient quality of service or value for money. And as with many other things that are happening, if this service is outsourced, it can be legitimately viewed as back-door privatisation of Jobcentres.

Many local public services have already seen their funding from the Council cut and it will be difficult to gauge the effects of these cuts for several years. In most cases, thorough impact assessments have not taken place. As with most policies of this government a hurried swinging axe has fallen down without taking into account the long term hardship and misery it will cause members of our community and the effects it will have on the local / national economy. The govt has set the precedent and unfortunately most Councils are following suit in the way the cuts are being delivered. In most cases the cuts will not ‘help the economy’, in fact they will have the opposite effect and stifle growth causing the country’s economy to continue to flat-line and even that might be considered optimistic. Triple dip recession just around the corner?

It could be argued that the Council are caught between a rock and a hard place, as on the one hand they are having their funding cut by central government who conveniently devolve responsible to local authorities as to how the cuts are implemented and have also removed most of the ring-fencing of budgets which gives local authorities free reign regarding services they choose to cut. On the other hand, of course, the Council will not be able to please all the people all the time. However the question begs, how vociferously are our Councils relaying their frustration and anger about the savage nature of these cuts back to central govt or is it more the case that once you scratch the surface of any rhetoric of objection they are happy to go along with the tory ideology of systematically destroying the safety /support network of many within our community.

Over the last couple of years, prior to the Council announcing which services will be facing the axe, residents have been asked ‘which services would you like to see cut’. However at a time when they were sitting on around £100M of local taxpayers money (now £70M), perhaps the question the Council should have, and should now be asking, is ‘which services that have already faced budgets cut would you like to see have their funding re-instated’.

If you live within Bournemouth Borough and would like to raise any of these issues with your local Councillors, all wards and contact details are shown here. Remember Councillors are elected by you, to serve you; not to blindly follow the decisions or ideology of whichever politically party they have chosen to align themselves with.

Specific information about budgets (and funding cuts) allocated to individual organisations is difficult to come by; even via FOIs (Freedom of Information requests). If you are aware of charities or support groups whose budgets have been cut over the last 3 years, please email us at info@bpacc.co.uk and we will look into the matter further. All information received will be treated in the strictest confidence.

Sources for this post:
Bournemouth freezing council tax by releasing £23m of reserves – Bournemouth Echo
Local Cuts and Closures – BPACC
New council tax reduction scheme aims to protect Bournemouth’s most needy – Bournemouth Echo
Social Housing Size Restriction – Bournemouth Council
Local Council Tax Support Scheme FAQ – Bournemouth Council
Is this the end of the Social Fund in local communities? – Community Links

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