Pledge not to 'throw Prestonians under the bus', as city sets out financial challenge

There is “a question mark” over every income stream on which Preston City Council relies – but the authority will still invest to help residents and businesses recover from the pandemic.

By Paul Faulkner
Friday, 26th February 2021, 1:59 am
Updated Friday, 26th February 2021, 2:40 am
Preston City Council has set its budget for the year ahead - but next year's will be tougher
Preston City Council has set its budget for the year ahead - but next year's will be tougher

That was the message from the council’s cabinet member for finance as the authority set its first Covid-era budget, which will see council tax increase by 1.99 percent from April – with the city council’s share of the bill on a Band D property going up by over £6 to £327.13.

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Cllr Martyn Rawlinson said that the rise was necessary because of the scale of the future financial challenge faced by the council as a result of the pandemic – and the monetary commitments it has already made to provide local support, not all of which will be reimbursed by the government.

“We quickly implemented a rent release scheme for our business when the pandemic struck. This is likely to cost around £300,000 – and that is not recoverable from anywhere.

“People are still dying and suffering – and we will continue to do everything within our powers and resources to support them until it’s over. Now is not the time to reduce jobs and services – we have to think about the future and what life is possibly going to be like post-lockdown,” Cllr Rawlinson said.

The meeting heard that income from car parks, properties and council tax was all uncertain. Budget papers reveal an expected drop in money generated by business rates as a result of reduced collection levels, property relief and potential appeals – which could lead to a £1m fall in revenue.

However, the council has created a £500,000 fund for Covid recovery and climate change initiatives – by reallocating money previously identified for general investments – and to which more could be added as and when suitable projects are brought forward.

Cllr Rawlinson added: “We have work to do to balance the council’s financial forecasts in the years to come – and the task may get more difficult as the effects of government policy and the pandemic become clearer.

“But we will not throw the people of Preston under the bus for the sake of the bottom line – and let’s hope the government don’t."

While the council has balanced the books for the coming financial year, it will have to identify £600,000 in savings in order to do the same from 2022/23.

Papers presented to the budget meeting of the full council state that the authority has previously drawn up a £1.3m list of contingency savings from services that it is not statutorily obliged to provide.

The authority’s budget working group will first try to find other efficiencies or new sources of income generation before calling on the items on that list.

However, Liberal Democrat opposition group leader John Potter accused the ruling Labour group of “kicking the can down the road”.

“As we all should know, savings don’t happen instantly and the lag between implementation and the savings actually occurring takes time. As your own budget shows, we are very nearly out of time.

“No-one wants to cut services and jobs, but by continuing to kick the can down the road, there is a real danger you make deeper and harsher cuts when that happens,” said Cllr Potter, who questioned why not a “single saving” had been identified in the budget itself.

The council has previously agreed to cover existing budget gaps by using its general fund reserve until it runs down to the minimum allowed level of £1.1m by the end of the medium-term financial forecast. In 2020/21, it stood at £7.4m.

However, Lib Dem councillor Neil Darby said that the strategy was using up funding that would usually be drawn upon to support the Preston Guild, which is next due in 2032.

“Not once in almost a decade of controlling Preston’s finances have Labour come even close to managing to balance the books,” he added.

Cllr Rawlinson condemned what he called “financial scaremongering” by the Lib Dems.

“We have over £1m savings earmarked – we only require £600,000 a year in savings, so we’re well on top of it. There is absolutely no panic.”

Both the Lib Dem and Tory opposition groups also called for the authority to abandon a £200,000 investment over the next two years in the so-called “Preston Model” of community wealth building and instead invest further in climate change policies.

The Conservative group also called for the council to put £100,000 into preventing cyber attacks on the authority.