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Why Dorset’s unique funding increase won’t stop council budget cuts

DORSET COUNTY COUNCIL appears to be the only local authority in the country getting an increased government grant.

Dorset can look forward to an increase of 0.25 per cent for 2011/12.

So does this mean that Dorset will not have to make cuts? That proposals to slash 500 jobs will be abandoned? 

The answer would seem to be NO.

English local government finance is famously a very, very complicated subject, and county council officers will be making all sorts of fresh calculations before a Cabinet meeting on December 15, but it looks like not all that much will change.

Why?

Because Dorset still has to make big reductions. And county council officers – and, one must presume, the council’s ruling Conservatives – want to get on with the job.

The crucial paragraph of the Cabinet agenda paper is 2.3.

“Availability of the grant settlement should not change the Council’s approach to achieving spending reductions.

“Our relatively low dependence on grant means that most of the current funding shortfall arises from factors other than potential cuts in grant.

“The need to allow for slippage in some aspects of the savings programme and the requirement for further savings in subsequent years mean that all opportunities identified should be pursued as vigorously as possible, whatever the outcome of the 2011-12 grant settlement.”

To give an example of what this means in practice: the county council is hoping to transfer 20 libraries to communities and volunteers, but – see paragraph 6.2 – “experience to date has indicated that this will be very difficult to achieve in any realistic timescale.”

So unless there is a sudden change of approach, the council will still seek to make cuts of £17 million in 2011/12, because it believes that it is the wisest policy – long-term, medium-term, and short-term.

Paragraph 4.4:

“If the settlement does not require a figure of this magnitude in 2011-12 (e.g. if the ‘front-loading’ is less than feared), it is proposed that a savings target of £17M be pursued in any case given:

a) The Comprehensive Spending Review requires savings in the order of an additional £26M on top of MFC [Meeting Future Challenges] by 2013-14, so proposals in this report will need to be pursued regardless of whether the shortfall is worse in 2011-12 or not;

b) Many of the proposals will be very difficult to achieve in the time-frames available anyway, so it is advisable to aim to exceed the savings targets than face a large over-spend;

c) Our communities and our staff deserve as much clarity as soon as possible and this can best be achieved by a single major change programme rather than having repeated changes year on year, with the uncertainties that generates.”

Put another way – the scene is potentially set for a huge political battle in Dorset in the run-up to next year’s council elections.

3 Responses to “Why Dorset’s unique funding increase won’t stop council budget cuts”

  1. Alastair Nisbet

    I’ve been scratching my head over these figures because they just don’t add up as you explain. To summarise: the government’s financial experts don’t believe Dorset needs to make huge spending cuts – but the county is going to do so anyway. We’re not being cut – but hey let’s do it anyway ! hmmm

    • Jonathan Hudston

      It is a head-scratching situation, isn’t it?

      I might be entirely wrong about it, although I don’t think I am, given the council’s insistence that opportunities for cuts “should be pursued as vigorously as possible.”

      And Liberal Democrat councillor Ros Kayes has been saying on Twitter that “DCC [is] in even more debt than 2009. Nearing £40m I hear. Massive cuts inevitable despite settlement.”

      Remember that council tax has now been frozen so the county council can’t seek to raise money through that – and that’s significant.

      Because, there’s a clue as to why the council thinks it will still need to make cuts in the story above: “Our relatively low dependence on grant means that most of the current funding shortfall arises from factors other than potential cuts in grant.”

      In other words, in layman’s terms, because – under the old Labour government – Dorset used to come fairly often near the bottom of funding league tables, over the years the county council has had to rely more and more on the money raised from council tax. So, a higher percentage of the council’s overall income comes from council tax than is the case in most other local authorities. Dorset may be getting an increase of 0.25%, but the amount that nowadays comes from the government via grant settlement is less important than it used to be, and has less of an impact on the overall situation.

      That’s one interpretation, anyway.

      And I’d imagine – to put it very crudely – that it’s one that will be cited by the Tories now in charge of DCC. They will probably try to blame the current situation on the legacy of Labour’s years in charge of the country.

      How might that go down in Dorset? I don’t know. Labour has very little party machinery left across the county, certainly the more rural parts.

      The Lib Dems? They keep saying that ‘there is no coalition in Dorset’. They are terrified of being wiped out locally because of their party’s unpopularity nationally.

      That’s why – surely? – the scene should be set for an almighty battle.

      PS – Does anyone know exactly whatever did happen to all the money that Dorset County Council invested in Iceland?

  2. Andrew Preston

    That’s Conservatism for you… at least the particular brand of neo-conservatism that has reared its ugly head again in this country.

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