Friday, January 08, 2010

Fiscal Fibs

Regular correspondent on this blog, and our LibDem opponent in Haughton West next year Alan Macnab, had a grumpy letter published in yesterday's Echo about the Labour Group proposal that the DBC element of Couincil Tax be frozen for 2010/11.

Alan's letter is a classic of its type - full of half-truths and - let's face it, full-blown fibs - that chracterise so many LibDem utterances on most subjects. Let's look at Alan's letter in detail;

"It is indeed good news that Darlington Borough Council is proposing that Council Tax will not rise in 2011-11 - the first time a below-inflation rise has beenn levied since Labour came to power."

FIB!! In the first year of Darlington's existence as a unitary, Council Tax was actually reduced by 11.3%. My maths isn't what it should be, but that fact seems to be absent from his subsequent comparison between Darlington and other councils.

In reality, under Labour as a unitary authority, Council Tax in Darlington has risen by less than the average of all similar councils.

FACT. Darlington residents continue to benefit from paying the lowest total Council Tax in the North East.

"The Council also has a debt mountain of £80.8m, which will not be paid off until 2078-79, whilst its reserves are the absolute minimum it is allowed to hold."

WHOPPER!! The Council does not have a debt mountain. Local government financing is a complex subject, and it isn't easy to boil down the facts accurately into a blog (even less in a letter to the Echo). Here's my best stab at what's really the case...

The Council has a £143 million capital programme over the next 5 years. £117 million of that will come from Government grant. Another £10 million is supported borrowing, whereby revenue grant from the Government pays the financing costs.

DBC does invest in assets such as schools, highways, housing and regeneration. Like all councils, it borrows to fund some of these improvements, and most of the borrowing costs are paid for by Government grants.

Lets take a recent (and highly relevant) example. The Council has been sucessful in winning a bid for £57 million to rebuild 3 secondary schools in the Borough. As part of the deal, the Council will contribute £1.8 million. It is hoped that this will be funded through capital receipts, but if these can't be realised, then the money will be borrowed.

Is Alan's position really that £57 million of much needed expenditure on our schools be turned away from want of £1.8 million borrowing? As he signs himself the LibDem candidate for Haughton West, we shall have to assume that he is repeating the official party line on this matter.

I'm not sure this will be terribly popular in Hurworth, where the school is to be modernised, represented for the moment, of course, by 2 LibDem councillors.

In addition, the council's reserves are not "at an absolute minimum". Every year, the Council takes professional advice on the minimum reserves which should be kept. The figure is set at £6 million, and the Council currently has £8 million in reserve. Independent auditors (PWC on behalf of the Audit Commission) recently concluded that DBC's financial management is "robust" and "sound".

As a Labour Councillor, I'm proud of the services we deliver across the Borough, and the fact that we achieve good value for money in their provision. Residents' satisfaction in the recent survy stood at 79% - higher than the average for similar areas.

Whilst Alan and the LibDems try and fashion scare stories and myths about council financing, I'll be continuing to play my part striving for excellence in council services at an affordable cost for the people of the Borough.

11 comments:

Embarrassed said...

Oh dear, IT'S OFFICIAL

Hurworth has not kept it's precept the same not even remotely on the same planet as normal thinking folks and it has increased it's Parish Precept by a mammoth 42% in these times of financial hardship..

Or so boldly states the front page of today's D&S, as I hang my head in shame while reading it!

After all the things I have said about DBC I feel praise where praise is due and it is time for me to eat humble pie. Yum Yum!

I think it is disgraceful that when people are finding it hard not even DBC would push through an alledgedly much needed "handy man" or kerbing for that "wild wild grass" that needs so desperately to be kept safe!

Yet disability issues are still lagging far far down the list, perhaps the 500+ registered disabled people in Hurworth might have something to say about the priorities in this work of fiction so much influenced by it's recent work of dreamers...The Parish Plan!

Not to worry there are elections coming up and hopefully all those outraged by this increase will make their feelings know at the ballot box thats if they can get to the polling station for lack of grit!

I would suggest that every resident should be questioning the Parish Councillor's who voted for this and why it saw fit not to follow Labour leader John William's advice/request and not raise it!

Praise where it's due well done DBC, those who pushed this through on Hurworth Parish know who they are!

Is it not time that Parish Council's who cannot manage their finances correctly are re-absorbed under the umberella of DBC (or sedgefield) if this is the way they see fit to waste public funds.

Anonymous said...

Alan Macnab writes....

Nick. I have delayed responding to you in order to consider an appropriate and dignified response. I am saddened that your posting indicates that I am, in your words, telling fibs.

Turning now to the main issue in your posting which disputes my letter to the Northern Echo in relation to council taxation.

My concern is why can all other unitary single tier councils in England post a 92.24% Council Tax increase in the period 1997-2010 whereas Darlington's Council Tax increased by 131.77% in the same period.

You stated that "in reality, under Labour as a unitary authority, Council Tax in Darlington has risen by less than the average of all similar councils." My statistics which came from the Department of Communities and Local Government for single tier unitary councils shows the contrary to be the case.

Alan

Anonymous said...

What happened to the photo of the car on this blog Councillor Thorne-Wallis? Did you by any chance get a warning of legal proceedings like you did when you posted ofensive comments on this blog about the leaders of the Conservative oposition at Christmas 2008? They were non too pleased with you were they?

Now Councillor do come clene and tell all. Has your judgement let you down again?

james said...

Alan,

The independent Oneplace website doesn't indicate that there's a fiscal crisis at DBC.

I'm curious where you got the figure on debts from.

Darlington Councillor said...

Thanks, James.

Alan - when as a candidate for a major political party you write to the Echo with serious allegations against another party, you have to be sure of your facts.

(1) You said in your letter that the the proposal for next year's Council Tax - if approved - will be the first time that it has not been increased above inflation since Labour came to power. That simply isn't true, as I have indicated in the main article above.

(2) You also said that Council reserves are "the absolute minimum it is allowed to hold." That isn't true also, again as I have demonstrated.

I don't know how DCLG compile their figures - but I will be looking into this - about relative levels of Council Tax between authorities. All I can say is that my facts are derived locally, and are much more likely to be accurate than Whitehall's.

On the substantive issue of the, let's call it major inacuracies, regarding points (1) and (2), however, will you be writing to Hear All Sides to correct the very misleading impression you gave?

Skint in Hurworth said...

Nick: you say

"I don't know how DCLG compile their figures"

They probably use the "just make it up as you go along method" as employed out here in Hurworth as no one here knows just how the Hurworth Parish lunatics have complied there's and ended up with a 42% increase especially when ALL Parishes were publicly asked by John William's not to make an increase?

Time for resignations!

Anonymous said...

Alan Macnab writes....

Nick. I give below my response to the points you have made in your posting yesterday.

(1) Council Tax increase. I was wrong. For one year Council Tax in Darlington did in fact go down. That was 1997/98. However, your claim, "In reality, under Labour as a unitary authority, Council Tax in Darlington has risen by less than the average of all similar councils." is simply not the case. The fact is that from the financial year 1997/98 to the current 2009/10 financial year Council Tax in Darlington has increased by 132% compared with the average percentage increase of 92% for all unitary authorities in England in the same period. This has been regularly above the level of inflation. I am disappointed that in the years when the economy was prospering Council Tax kept on increasing and there was no attempt to reduce the burden on the taxpayers. The statistics came from the Council and the Department of Communities and Local Government.

(2) Council Debt Cabinet papers show external borrowing liabilities at the end of 08/09 to be £104m. They show the estimate for the end of 2009/10 to be £85m. There has been a corresponding fall in the Council's investments, as the Council cashed in some of its investments to reduce its debt. However, they also show that debt is projected to increase to £121m by the end of 2011/12. This may be a molehill to you, Nick, but to me and to many Council Tax payers this is indeed a "debt mountain" which costs between £3.5m and £5m a year to service. I worry about the level of borrowing and how the amounts borrowed to finance this debt will be repaid given the fall in revenue from Central Government, Council Tax, other income and investments and the need for the Council to maintain essential services.

(3) The reserves. For last year's budget, the risk assessment carried out by the Council showed that the estimated annual risks to the Council which needed to be covered by the reserves totalled £2.795m. Each individual risk level was multiplied up by a number of years to give an estimate of the amount of reserves required to meet that risk. Last year most of the risks were multiplied by 3 or 4 years, giving a total of £5.935 reserves required, which was rounded up to £6m.

This year, as shown in Appendix 5 of the Council's MTFP document, the annual risk is calculated at £3.84m, somewhat above last year's figure. Yet most of the individual risks are multiplied up by just two years, producing a figure of £5.990m reserve required. Still below £6m, but only because the method of calculation has changed. If the method of calculation had been the same this year (i.e, the risk had been multiplied by 3 years rather than 2 years), the required reserves would have been well above the level at which they've been set this year.

Although the estimated annual risk has increased from £2.795 to £3.84m, the reserve that the Council has judged to be required has conveniently remained at £6m. Should the Council not have a higher level of reserves at the current time given the perceived increase in risk? The proposed spending plans will mean there is indeed an absolute minimum gap above what I would argue should be the ideal level of the reserves.

Alan

Dinosaur Hunter said...

Dear Skint

As for Hurworth it may be only "a packet of 18 cigarettes each (this alone shows how far out of touch these old Dinosaurs are as it should be a pack of 20) but all this waffle and Parish Plan pie in the sky may be fine if you are driving round between your Bridge matches or using your alleged free Rockcliffe Hall Golf membership in a big Jag or even your second car.
But for those of us who live in the real world without a car on the Council estate and are on a very tight fixed income with 2 teenagers to support this 42% increase is unbelievable, I will find out which of the bridge stars and their friends voted in favour of this increase and name and shame them!
Any Councillor who voted for this should be fored by their own concience to stand down on the grounds that despite surviving the last ice age their brains have been severely and permenantly damaged by the frost.
Another monumental mistake from the OAP Parish that talks grand yet who have achieved nothing except capitulate to the richest members of the village, perhaps if they had not built one resident his own private fence they would not have needed this untimely increase!
Please please Mr Judson (Hurworth Comp. Headmaster)if you read this keep these idiots from having any input or decision to do with the new School rebuild, god alone only knows what "ideas" they will come up with. Watch this space.

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