Pickles accuses councils of, errrr, acting prudently?

Alongside the publication of Local Authority finance statistics, came an Eric Pickles press release which – even by his standards – is grounds for raising an eyebrow over. In it he accused councils of “amassing secret stockpiles of taxpayer money”.

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Secret? Really?

But not long ago the same Communities Secretary was celebrating the transparency of public funds that he was overseeing. Is it secret Mr Pickles? Then surely it’s because you’ve not done what you told us you were doing….which was making it all not so secret.

Personally, I feel that the careful and robust monitoring and statistical release of local authority financial information, makes things pretty much not secret. But maybe I use a different dictionary to the Secretary of State.

The figures do show that councils did increase their reserves by around 20% in 2010-2011 – just over £2.5bn more. Whilst £2bn is a lot of money in anyone’s book, this should be set against the £100bn that councils spend each year. So the increase is something like 2.5% of their spending being squirrelled away for a rainy day. That doesn’t sound particularly noteworthy to me.

It’s worth bearing in mind that these figures are from 2010 – at the very beginning of the financial tsunami sweeping over local government. Councils around the country knew it was coming but it hadn’t yet arrived. Hardly surprising they should try to insulate themselves from what lay ahead, is it?

In fact it strikes me as being entirely prudent to try and beef up your reserves when you know your income is going to reduce by around 50% over the next few years. If councils haven’t done so, I’d be more inclined to regard them as irresponsible.

Mr Pickles does acknowledge the need for “…a financial umbrella for those rainy days but keeping reserves at levels unprecedented in recent years should give local residents pause for thought.”

The reserve levels are unprecedented, much like the level of the cuts. And that should give Ministers pause for thought.

 Unfortunately, I don’t hold out much hope of that from the Secretary of State for Communities and Local Government.

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Help for citizens in hard times, or just a load of rubbish (collection)?

George Osborne’s announcement in his speech at the Conservative Party conference that he was making £805m available to local authorities to freeze council tax in 2012-13 comes fast on the heels of news that Eric Pickles has found £250m for councils that maintain weekly bin collections. These are, as the Chancellor reminded us ‘challenging times’ and money is tight. That over £1bn has been found over the last few days might seem amazing, but find it they have.

The decision to offer local authorities cash to freeze council tax, a continuation of arrangements for the current year (2011-12) has been presented as evidence that “this government is absolutely committed to helping people through these times”. Putting to one side the fact that this will save the average person just £72, there is at least some evidence to suggest that the ‘help’ offered to citizens will actually be negligible.

The council where I live, the London Borough of Barnet, has for some time been committed to avoiding any increase in council tax. So it was hardly a surprise that they – like every single local authority in the country – decided to freeze bills for 2011-12. So far so good.

But with council funding severely cut, their budget has been put under great strain and so (again like every other local authority) they have been trying to find ways to balance the books. Efficiencies have been sought, costs cut and services reduced, but that appears not to have been enough. So attention has turned to ways of boosting income – charging more for some services, or introducing charges for things that had previously been free.

Barnet’s leadership, in another display of support for the government, have maintained their commitment to weekly bin collections. So the Environment and Operations Directorate – the team responsible for parks, open spaces, waste, recycling and residents parking – have sought to raise revenue rather than cut costs. What this has meant for hard pressed citizens is an increase of 400% in resident parking charges – wiping out the entire saving of a council tax freeze in one fell swoop.

I’ve also been told of by the organisers of a community festival being told that the cost of hiring the park was going up from £140 to £3,500. That is an eye watering increase of 2,500%! This community festival has been running in the area for 100 years and is surely the embodiment of Big Society – something Barnet are allegedly very keen to support (though perhaps no one told the Parks Department?)

I don’t mean to unfairly single out Barnet for particular criticism, I suspect there are many others doing similar things. I just happen to see in more detail what happens in Barnet – as an individual citizen as well as the perspective I get from my work. Nor do I wish to bash local government – there are plenty of others unhelpfully doing that already. I am a strong supporter of local government and I have been critical of the government’s lack of support for councils – particularly the decision to front-load cuts to their budget in the Spending Review. I can also see a strong argument for providing additional funding for local authorities (particularly to help them protect services to the most vulnerable and maintain support for civil society). However, what I do take exception to is presenting this funding as ‘support for cash strapped households’ when (at least in some instances) there will be no benefit to citizens.

As for Mr Pickles and his bin fetish, I cannot understand why the ministerial custodian of localism has such an obsession with maintaining weekly refuse collections. The Secretary of State is clearly entitled to create financial incentives for certain activity – just as local authorities should have the freedom to accept or reject them. However, in view of the fiscal climate and the huge range of challenges facing local authorities, I do not understand the prioritising of weekly bin collections over anything else.

Is there really a person in the land who thinks that weekly bin collections are the number one priority faced by local authorities? Are citizens having sleepless nights about their bins, rather than job security, pensions, health or education?  I know there are some effective advocates who are campaigning to protect weekly collections, but I’ve not heard any of them say it was the priority we face today.

£250m is not, in the scheme of things, a huge amount of money for government. Nonetheless it would, as Simon Parker from New Local Government Network pointed out, pay for the residential or nursing care for 9,335 elderly people for a year. More significant is the signal is sends out, which is at best confusing and at worst downright damaging.

Breathing space and playing the long game

I didn’t hear Communities Secretary Eric Pickles’ speech at NCVO’s annual conference yesterday (though I was following it on twitter), but I did arrive soon afterwards for a drink and a natter with the assembled ranks of the VCS. The Secretary of State had earlier announced that he felt it was reasonable that local authorities did not disproportionately cut funding to voluntary and community groups and that he would consider using legislation to prevent it.

The reaction to his speech was not particularly positive and the impression I got was that most people were deeply sceptical and unimpressed with what they saw as just ‘warm words’ without action. This is entirely understandable given the daily pain of news about further cuts to the sector we are receiving. It is legitimate to point out that had the Secretary of State not frontloaded the cuts to local government (so that the deepest cuts happen in 2011-12,) the situation would not have been so bad.

Nonetheless I was surprised by the rubbishing I heard, characterised by one prominent sector leader disparagingly referring to the ‘Pickles Doctrine of Reasonableness’. These are pretty dark days for the sector and I for one am desperate to grab on to the bright spots of opportunity that might offer some hope of improvement in the future.

Whether the example of councils like Thurrock and Wolverhampton (who have fully protected their funding for the not-for-profit sector) can be followed more consistently, I don’t know. I know of a number of local authorities that are deeply committed to protecting as best they can, their funding for the VCS, but are still having to make cuts. Nor do I believe that every penny that flows through to charities is spent in the interests of those most in need.  I even have to admit that I do not hold out a great deal of hope that things will change significantly in the short term as a result of Eric Pickles’ speech.

The one thing I think central government could to do to convince sceptics in the VCS and local government of their sincerity on this issue is to demonstrate leadership by example. We need to see Departments across Whitehall lining up to prove that they value the sector and that they too will ensure that the cuts in their funding will not be out of proportion with their own budget cuts. If we see that, perhaps more people will be prepared to take them at their word.

But for me the really interesting part of his speech was when he said that where Councils expected funding or support to need to be cut;

“It is reasonable to expect that they (Councils) … give local groups a chance to make their case and suggest alternative ways of redesigning or reshaping the service.”

That is where I think we ought to be looking for opportunities.  The chance, in effect, to get creative and explore whether there are ways to reconfigure or redesign the way things are done. That seems to me to play to the VCS’s strengths – creativity, innovation, efficiency, joining things up and finding ways to address needs and problems. I heard Locality’s Chief Executive, Steve Wyler, call for something very much along this lines recently – a right to reshape – and I thought then it sounded like a good idea.

It’s essential that we don’t solely focus on the here and now and the considerable challenges we all face in the short term. There is a long-game to play too and we must not let the opportunities slip away. I accept that this comes too late to save many organisations and jobs which are already gone or going. However that doesn’t mean it’s a bad idea.

I believe that legislation along these lines – as part of the package of community rights being introduced through the Localism Bill – could significantly strengthen not just the VCS but the public sector too. It could mean that, before any cuts were made, we’d have a chance to get people together to explore, openly and honestly, how savings might be made, how improvements could release other funds, or how the aim might be achieved in a different way. At the very least it might buy some breathing space.

Of course there are plenty of ‘ifs and buts’ and much would depend on the detail, but that’s my point. We will miss out on informing the detail if we’re too quick to reject the idea out of hand.

Whether or not this represents a change of heart or of policy for the Secretary of State, I don’t know. Nonetheless, I do recognise that Eric Pickles is attempting to offer the sector something and, if our collective response is to dismiss it, we may not get a second invitation.

I believe it would need a legislative underpinning and can only see this working through the Localism Bill. However to get this idea onto the statute books we will first need to recognise its potential and then make our voices heard loudly and clearly. Localism means central government devolving powers, but it does retain control of the framework within which decisions take place. A community right to review or redesign would be a positive step in my opinion and one we should lobby hard for.

 

Toby Blume

Chief Executive 

Urban Forum 

 

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