York Liberal Democrats

Leader's Budget Speech 2008

Lord Mayor

The Council will wish to join with me in thanking our officers for their patience and hardwork in helping to prepare the budget which is in front of us this evening. Having lost Peter Steed halfway through the budget build process we are all aware of the additional burdens that this placed on Simon Wiles, Janet Lornie and their teams and we are grateful for them for helping to get us to this point.

I am also grateful to the other Group Leaders who participated in the information gathering and briefing sessions during the autumn and winter. A process that ensured that all members of the Council had the same amount of information available to them and at the same time.

So what are the challenges facing the City?

As has now been the case for several years, the City is undergoing transformational change. Our industries are unrecognisable from 50 years ago with science, technology, learning and tourism now predominant.

No one can forecast accurately how the national and international economic position might affect our ambitions for the next few years. But the recent record of investment in our City, by the private and public sectors, is outstanding and the envy of much of the country.

During the last year we have seen the new York College open & much of the Foss Islands development has been completed.

Physical work has started at Hungate and the first sod has been turned for the University expansion.

Planning permission has been gained for both the Derwenthorpe and Germany Beck housing developments

Planning applications are under consideration for the Terry's and Nestle South developments and work on both should start this year.

And in the slightly longer term, a new owner, for many of the properties on Piccadilly, means that the remaining underused - and frankly visually unappealing - site within the Bar Walls will at last receive the regeneration that it needs.

The largest single development will come at York North West where the Area Action planning process will be concluded later in the year. The expectation is that rail requirements for the York Central site will be concluded by April and that developers will be appointed by the autumn.

It is worth remembering that, excluding the potentially huge York North West development, which will take over 15 years to complete, the committed investment in the City exceeds £½ billion over the next 3 years on major redevelopment projects alone.

This will provide around 2000 jobs.

On the housing side Derwenthorpe, Germany Beck, the Barbican, the Arclight centre, new Peaseholme and parts of the employment sites will provide over 1500 new homes

Business confidence is high with 31% of local businesses expecting turnover to increase during the next year. Few anticipate a drop in business.

According to the LGAs Cities Outlook 2008 study, York is already in the top ten Cities nationally for high employment rates. It is ranked second in terms of earnings growth and is already ninth in terms of the highest average wage.

It also has one of the smallest disparities between those on highest and lowest incomes.

Public sector investment by the Council has also been at record levels this year.

Over £52 million is being invested by the Council through the capital budget. Major schemes, which are already completed and in use, include the new Moor Lane roundabout road safety scheme, the Yearsley swimming pool - which has been completely refurbished and reopened to a chorus of acclaim, a £2.8m Skills Centre opened in January 2008 providing opportunities to improve vocational training for some of the most disadvantaged secondary school aged children in the city, the new Explore@Acomb Library Learning Centre project opened earlier this week while 6 - of our planned 8 - Childrens Centres will be open by April

Good progress is also being made on the provision of a multi use games area for Derwent Infant and Junior schools, the replacement of the Joseph Rowntree & York High schools, the new £6m pool on the York High site, and on the design of the new council offices at Hungate with a planning application due to be submitted by Easter and a start on site planned for the summer of 2008.

Despite the confident mood in the city we cannot inure ourselves against the national economic tide, but the extra jobs and homes are virtually guaranteed and will substantially strengthen the City's economic position and its prosperity.

The Council can take pride in our public service standards which are now better than ever before.

The 2007 CPA score, produced independently by the Audit Commission, confirms our performance as good. All bar one of our Departmental scores are now either good or excellent.

Our "use of resources" score has improved to performing well and as has our housing performance.

And on our other key priority - a safe City - there is more good news.

We are just coming to the end of the 3-year Community Safety Plan. A target of a 24% reduction in overall crime was set at the beginning of that period. I am pleased to tell the Council that the expectation is that - with our partners - we will have achieved a 37% reduction in crime during the last 3 years.

So the City and its council was in a strong and stable position as we began to deal with the many constraints that we face with our 2008 budget.

We are well placed, in terms of expenditure levels, in the current financial year. We are anticipating a budget underspend of around £3 million. Effectively we will start the year with balances which are around 30% higher than the minimum figure recommended by the Audit Commission.

This has provided us with more flexibility in the way that we address some of the short term pressures in next years budget, although the savings in the current year do largely reflect the vagaries of the money market and interest rates. The latter may go against us next year so caution needs to be the watchword in how we use any balances …. and indeed in the level of our contingency provision.

I am often asked by residents why Council Tax increases regularly exceed inflation?

I will explain in a moment some of the pressures that we have on our budgets.

However, in order this year to make an informed decision about budget priorities we have embarked on our largest ever public consultation exercise. The talkabout panel have given their detailed views, a "focus" group met at the Early Music centre and several hundred people filled in an on line survey.

Over 6000 households also returned the survey form that was posted to individual properties.

The results of the different surveys were generally consistent.

Resident's principle concerns are to sustain the quality of basic street level services such as highways maintenance and street cleansing.

They place a high value on care services for the elderly and people with disabilities.

They are clearly markedly less enthusiastic about spending Council Taxpayers money on transient experiences such as fireworks displays and fairy lights.

The poll results also helped to guide us when we decided to increase parking charges for visitors. This was actually the proposal, of all the options, which attracted the most support in all 4 consultation methodologies.

Council Tax, as has been said many times, is a fundamentally flawed way of funding local public services.

The rebate system is alien to many and is ineffective at the margins.

For low paid workers and pensioners it is a steeply regressive system of taxation. It is long overdue for reform and replacement, but we know that will not happen in the foreseeable future.

The proposed 4.75% increase in Council Tax is the lowest in the City for many years. It will mean that we will continue to have the lowest Council Tax level outside of the south east of England where the 13 other Councils, with lower tax levels, enjoy much higher levels of government subsidy.

York also suffers at the hands of the central government grant system. We thought 18 months ago that we had cracked the problem when the Fair Deal for York campaign resulted in changes to the distribution formulae. These should have meant the City receiving around £1.5 million extra per year.

However, the introduction of a "damping" mechanism means that each year £1 million of the City's entitlement is being diverted to subsidise southern county authorities.

It is doubly depressing that local MPs have been so ineffective in challenging this state of affairs at a national level. In grant terms York is now in its worst ever position. In terms of grant per head of population we now receive only 59% of the unitary average

This year our basic grant is increasing by 3.2% against a national average of 4.8%. It was that latter figure that we needed if we were to avoid any cuts to public service standards in the City.

And in reality central government dealt further body blows to public services in York. They are taking away some £1.2 million in specific grants from the City next year. These include:

· A £203,000 cut in Waste grant

· A £720,000 cut in Supporting People grant

· A £310,000 cut in Planning Delivery grant

· A £86,000 cut in Housing Benefit Administration Grant

In addition there will be a shortfall on specific grant for concessionary bus fares of £440,000 while £550,000 more will be siphoned off by central government through increases in the rate of Landfill Tax.

Other mandatory requirements such as the preparation of the Local Development Framework, about which we have no choice, will add £1/4 million to the local taxpayers burden.

In total the City will have over £2.5 million less to invest in local public services than if the status quo had been maintained

It is an unjust and blinkered approach by a government that has lost its way.

I just hope that electors will remember these actions when they come to vote at the next General Election.

The other pressure on our budget arises from increased demands for statutory services.

By far the greatest increase - and this is being felt by many authorities - are in the numbers needing the support of our care services.

Current estimates are that the client base for social care will have increased from 4,892 in 2002/3 to 6,353 by the start of the new financial year. This is a 30% increase. It reflects the increasing life expectancy that we all now have. It also reflects the greater skills that we have available to extend the lives of people with disabilities.

One of the greatest achievements of the Council over the last 5 years has been our ability to retain the same threshold for those seeking the social care services offered by this authority. During that time authorities up and down the country - including all our near neighbours - were increasing the height of that barrier so that only those with the most substantial or critical needs now receive support.

We are proud to say that we will continue to help those with moderate needs and above.

That will remain the case next year and we have allocated another £435,000 in our budget to sustain those caring services for the elderly and those with disabilities. This is in addition to the £2 million that we added, for the same service area, to the budget for the current year.

Next year our largest ever capital programme will see an £80 million boost for schools, buildings, roads, transport systems, homes and offices.

In addition to completing the projects that I mentioned earlier, residents can expect to see 3 new secondary schools being built providing a world leading learning environment, £16 million being spent on IT and the modernisation of other school buildings, £8 million will go towards building improvements - enabling the delivery of the 14-19 diploma and provision for pupils with special educational needs in secondary schools; £8.4m will be spent as part of a 14 year programme to transform education in the primary school sector across the city while £0.9m has been allocated to make improvements to accessibility in schools.

Transport will benefit from a £4 million resurfacing and reconstruction programme which will bring 13km of carriageway and 17km of footway across the city up to standard. Another £3.706 million will be spent on Integrated Transport schemes including bus priorities on Fulford Road, new signals at the Beckfield Lane/ Boroughbridge Road junction, improved cycle routes over Clifton Bridge and other safety improvements

The most radical change will come as the Council steps up to the climate change challenge

A £0.5m investment will be made in energy efficiency and carbon reduction technologies. The Council's buildings will be more energy efficient reducing the Council's carbon footprint and making significant revenue savings;

Other projects will make a contribution.

· the new Administrative Accommodation building will reduce the Council's carbon footprint by at least 2,400 tonnes per annum, a 12% reduction on existing output,

· the York High School new building will reduce carbon emissions by 500 tonnes per annum;

· the new Oakland's Pool will see reductions in emissions of 25 tonnes per annum, when compared to Edmund Wilson Pool.

· the project at Joseph Rowntree is aiming at carbon reductions of 50% compared to the existing school output.

The City will contribute £1.8m in matching funding to secure a £9m investment in the Yorkshire Museum, gardens and Art Gallery turning that part of the City into the new cultural quarter.

Housing investment will be sustained as we move to achieve, and better, national government public sector housing standards well before the 2010 deadline. This means that £6 million will be invested in a programme which will see heating systems replaced in 2,101 homes; £12.2m will be spent on tenants choice schemes which will also encompass better heating, insulation and communal areas; there will be a £1.4million programme to enable older and disabled people to live independently, £5.7m will be spent on housing grants to improve homes across the city and the new £1.8m homeless hostel on Fishergate will open

£1m is reserved to reprovide social services functions, including a £0.5m hydrotherapy pool at the Oakland's Sports Complex while £200,000 is reserved for Telecare equipment to enable elderly and disabled people to live independently for longer. There will be a programme of fire safety improvements at the Council's Elderly Peoples Homes and the new town centre public toilets - which incorporate a changing places facility for the disabled - will also open.

We expect good progress to have been made by this time next year in our new swimming pool programme with the High school facility due to open in June 2009.

The new Administrative Accommodation project will make long term savings by rationalising the Council's 17 main office buildings to four, centred around the main building on the Hungate regeneration site. The project will deliver efficiency savings of over £5m (at today's prices) and improvements to customer contact, by operating from a purpose built integrated site. The project also includes the refurbishment of the remaining sites, including the historic Guildhall.

The projects will - when coupled with private sector investment - continue the transformation of our City; guaranteeing its long term prosperity.

Taken together these projects represent by far the largest ever capital investment programme ever proposed by a Council in York. The projects will touch the lives of every residents in the City by providing modern infrastructure on which we can provide good quality public services, at an economically affordable cost, for the foreseeable future.

Moving on from the capital budget, this has been a particularly difficult revenue budget to set. We faced a potential short fall of over £10 million as a result of the loss of government grant and increased demands for our services.

There are, of course, sacrifices to be made when living in an area which has low expenditure on public services.

York will continue to have less to spend, per head, on public services than virtually any other Unitary Council.

This is the product of having the lowest Council Tax rate outside of the south east of England and very low government grant level (our increase next year will be only 3.2% compared to a 4.8% average for other Councils).

Indeed there will be a net reduction of £2 million in government support for the City in 08/09.

The public poll results clearly demonstrated that the top priorities of our citizens are to sustain good street level services like highway maintenance and street cleaning.

To balance the budget it has therefore been necessary to find over £4 million in efficiency savings, while departments have altered priorities to direct £9 million into satisfying increased demand for services such as care of the elderly.

The budget has prudently looked at some of the future risks facing the council. We are adopting a cautious approach with more funding allocated to address inescapable pressures such as the pensions liability which adds £255,000 to our expenditure.

In addition, we consider a contingency fund of £800,000 to be the prudent minimum to allocate bearing in mind the uncertainties about equal pay, job evaluation and the potential two PFI schemes.

We expect the Council's financial position to ease over the next few years as the grant retained by the government (under the damping formulae) is gradually released to the City and the efficiency savings, produced by the new City Hall, can be redirected into sustaining public services in the City.

Council service standards in York are considered by independent experts to be "good".

Our priority has always been to create

þ a prosperous City,

þ a safe City,

þ a fair City and

þ a harmonious City.

Our budget proposal seeks to consolidate on the progress that we have made in these and other areas.

Our room for flexibility has been severely restricted, not only by the cap on income, but because central government have instructed us to reduce our income from services such as land charges and building control.

Together they amount to an additional burden of £200,000 on local Council Taxpayers.

In making our proposals we have respected residents views as expressed thought the various consultation mechanisms with only 3 exceptions.

ü We believe that, at this time, withdrawing the option of issuing residents with travel tokens would be unfair to those who do not enjoy a regular bus service. We expect over the next year to consider how services such as Dial and Ride can be extended into more remote suburbs and villages. We may then review our approach to the issue of tokens.

ü Nor do we consider that the starting time for the use of pensioners bus passes should be put back to 9:30am in line with the Labour governments policy. In York, at least, many pensioners like to make an early start and even 9:00am is too late for some people who hold part time jobs.

ü Thirdly we will be continuing the late night noise reduction service. Thankfully the problem, of anti social elements playing late night music, is limited to a few areas and a relatively small number of residents are vulnerable to this problem (probably the reason why it did not get more support in the poll). But for those who are affected, the safety net of having an enforcement team on hand to deal with problems is invaluable. For that reason we will be providing the service throughout the forthcoming year.

Nevertheless this revenue budget means major improvements in key local services

· all York's bridges will have safety inspections +£80,000

· kerbside recycling collections will be extended to terraced streets and more blocks of flats +£80,000

· there will be £100,000 extra for children requiring specialist care provision including fostering

· £200,000 will be spent on reducing highways flooding problems

· There will be £294,000 more for highways and footpath maintenance

· £435,000 extra will go to support people with learning and physical disabilities

· £1,428,000 will go to improve waste reduction and management

· £1,540,000 will fund free bus travel for pensioners and people with disabilities and we will keep the longer user times, and travel token options, not enjoyed by pensioners elsewhere in the region

Lord Mayor

York is now cleaner, safer and with a fundamentally sounder economic base than 5 years ago.

I believe that this Council budget will further underpin that progress.

It represents the largest ever investment in infrastructure improvements ever attempted by a Council in the City

It sustains the progress made in key areas.

And it provides the resources to address the new challenges that face our City and its people

I commend it to Council".

I would have preferred that we had been in a position to present a consensus budget to the Council this evening.

I do believe that would have been a signal of political maturity.

That has not proved to be possible and we must all hope that it is indeed possible this evening to find common ground and arrive at a budget which reflects the views of the Council as a whole and which is fair to all sections of the community which we represent.

We are obliged by law to set a balanced budget. We are required by financial prudence to start to print Council Tax bills early next month. Both dictate that we must this evening try to find a solution.