Preston Council facing “catastrophic” budget cuts as funding slashed

Preston Town Hall
Preston Town Hall
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Preston Council is facing “catastrophic” budget cuts, putting almost every service under possible threat.

The authority says it will get no Revenue Support Grant from Westminster from 2019/20, and will face a shortfall of £4.4m a year.

Councillor Martyn Rawlinson

Councillor Martyn Rawlinson

Leaders are currently consulting on budget proposals for the coming year, including plans to charge for the collection of garden waste bins, and will then work to make massive savings for the future.

The Government has announced a new business rates retention scheme to be introduced in 2020, but Town Hall bosses in Preston say it is too early to say how it will affect their funding.

Coun Martyn Rawlinson, cabinet member for resources, said: “In 2010, Preston Council was getting almost £20m from the government in various grants.

“By 2020 it will be zero.

Leader of Preston Council, Councillor Peter Rankin

Leader of Preston Council, Councillor Peter Rankin

“By 2020 they’ve left us in a position where there isn’t enough money to run the council.

“Even if we take away all the things we like doing – like parks, the museums, benefits and debt advice services, community engagement, leisure centres, sports development – there won’t be any money for those after 2020 with the current settlement from the Government.

“There won’t be enough for the basic statutory services they say we are legally obliged to provide.”

He said Preston had been one of the hardest-hit councils and, by 2019/20, the authority’s expenditure will exceed its income by about £4.4m.

Coun Neil Cartwright

Coun Neil Cartwright

That is on top of the £3.6m a year of savings the council will have delivered by the end of 2017.

He said: “In five years’ time, I can’t see how Preston Council is going to function in any form.

“At the moment we have to deal with it.

“We’ll be making savings through the forecast where we can, and with the depth of the cuts we are going to have to look right across the council.”

The Government announced last year that, by the end of the parliament, local government would retain 100 per cent of business rate revenues, which could change the council’s financial picture.

But Coun Rawlinson said the council had “no idea” at this stage what effect that would have in Preston.

He said: “There is a suggestion in some quarters that most if not all the money will go to upper-tier authorities with responsibility for social care, which means Preston could be worse off.

“For the last five years, we’ve been doing everything we can to protect front-line services, vital services, but the cuts are so deep now that’s going to be impossible in the next four years.”

The council is currently consulting on budget proposals for 2016/17.

It includes proposals to introduce a charge for the collection of garden waste (brown) bins from July of about £30 a year, following the planned removal of Lancashire County Council support for council recycling schemes.

It is expected to affect 46,000 properties, and have a net effect of about £500,000.

Bosses say the service costs £2.6m, and say it would save about £350,000 in 2016/17 and £519,000 per year from 2017/18.

It also includes working with “partner authorities” to set up a CCTV monitoring hub, which it is hoped will save £25,000 and then £50,000 a year.

Coun Rawlinson said: “The budget proposal was made before this settlement, and it’s too late to change it.”

He added: “At the moment, the Government is allowing council tax to rise two per cent a year.

“Council tax will continue to go up and up while services go down and down, because the Government is allowing that.

“For now we are managing the situation, but a few years down the line it’s difficult to see whether basic council services are viable.

“It’s absolutely catastrophic. It’s a fundamental change to local government as a whole, but certainly to the northern councils.”

He said there was likely to be an emergency budget in October, with a major savings programme from April 2017.

He said: “It’s absolutely dire. No one got into politics for this, but walking away isn’t achieving anything.”

Bosses said it was “too early to speculate” as to what the council will do beyond 2016/17, but said all options will have to be considered.

The leader of Preston Council, Coun Peter Rankin, said colleagues were “shellshocked” at the settlement.

He said: “To face the new year with this is very depressing, but we have to look at all our options over the next few months.

“We are looking at everything to see where we can go.”

He said the council had already made savings through passing on the Guild Hall and the bus station, but said: “We’ve still got this huge problem.

“We’re using reserves every single year to support the budget but we are going to run out.

“We can’t possibly keep the reserves at the same level because the reserves will run out in probably three or four years.

“It is a hard balancing act eking out the reserves and making as few cuts as possible.”

Coun Neil Cartwright, leader of Preston Council’s Conservative group, said the party had yet to be briefed on the details of the settlement.

He said: “I think it is going to be very challenging for us, but we as a group need more clarity about it.

“Certainly, we could do to have more information about how the business rates will impact the long term.

“That is probably one of the critical things because, reading Government statements, they are switching from the grant coming out to us raising our own money and keeping our own money.

“It’s an admirable philosophy, but as long as we know what the long term holds.”

He said he was trying to find out the impact of the business rates scheme “through the party system”, and said: “That goes to the root of the funding for 2020 onwards.”