Borough Council Notes Its ‘Strong Finances, Investments And Savings’ To Withstand Funding Challenges

Published on: 17 Jan, 2018
Updated on: 21 Oct, 2020

Guildford Borough Council has announced that it is in a “very strong financial position”, due to a “successful combination of focused savings, wise investment and effective management,” and “despite no overall government grant for 2018-19”.

Working with other partners, EnterpriseM3 Local Enterprise Partnership (LEP), Surrey County Council and Network Rail, It has a number of projects that it wishes to implement. These include a new railway station in Park Barn, improving the A331/A31 Hog’s Back road junction, new Walnut Tree town centre pedestrian and cycle bridge, and new road bridge over the railway in Ash.

GBC said that a total investment of £92 million in its services, local property and infrastructure is proposed for 2018-19.

Cllr Michael Illman.

Within the council’s press statement, the lead councillor for finance, Michael Illman, said: “Our commercial approach to investing in our own borough, and goal to become self-funding, will help the council cope without an overall government grant for the very first time in 2018-19.

“We start from a very strong financial position, thanks to the bold decisions based on our ambitious plans to improve our borough by increasing income, reinvesting in growth from our share of retained business rates and transforming the way the council works.

“All of this enables us to provide the wide range of vital services and future opportunities that our local communities and economy rely on to thrive. It also helps us manage the impact of the reduced funding from the government and Surrey County Council, without having to significantly increase our share of council tax for residents.”

The council states that it has the “second lowest council tax in Surrey in 2017-18 – with an increase of 9.6p per week proposed for 2018-19”.

It reports that it has “saved approximately £10 million since 2013, partly by improving how we work, and plan to make almost £800,000 of savings and extra income in 2018-19. This means we can provide the wide range of services that our residents and businesses depend on in the most effective way”.

The services include: collecting recycling, rubbish and garden waste; caring for families, the homeless and providing transport, meals, activities and support to help older and vulnerable people remain independent; supporting and developing the local economy and encouraging tourism; looking after public health and making sure taxis and food outlets are safe; safeguarding and showcasing its heritage and local attractions; making sure its parks and countryside can be enjoyed by everyone; and enabling a variety of sports, leisure and entertainment opportunities for all ages and abilities.

The council owns, manages and rents 5,200 homes at affordable social housing rents and states that these rents are decreasing for the third year in a row, by 1% in 2018-19.

It says it is building a mix of homes for sale or affordable rent.

Key schemes under way include: at Guildford Park Road, on the previous open-air car park site (160 homes, 64 for affordable rent); the site of the former Apple Tree pub in Park Barn, (118 homes, all for affordable rent with nine fully wheelchair accessible); the Ladymead site near the new fire station (12 homes, all for affordable rent); and other smaller scale previously-developed sites (21 homes across five sites, all for affordable rent).

It is also increasing the homes provided by North Downs Housing, the council-owned market landlord company, which buys local homes and rents them at low-end market rates.

To free up town centre housing, the council plans to explore how it can potentially help deliver more purpose-built student accommodation.

Cllr Illman adds: “It is not just the excellent financial management over many years, for which the council is independently audited and recognised as providing great value for money. We also take an entrepreneurial view to tackling the considerable challenges the council faces, particularly now that funding has to come from council tax, locally raised income and the proportion of business rates that we can keep.

“This view leads to positive outcomes, such as rental income from investing locally in property, which then helps keep council tax as low as possible. Every person matters, wherever they live in the borough and whatever their circumstances, and another benefit of our strong financial position is the ability for the council to provide and build a mix of homes to meet the different needs across our communities.”

Cllr Caroline Reeves.

The leader of the opposition Liberal Democrat group at the council, Cllr Caroline Reeves (Friary & St Nicolas), said: “While Guildford Borough Council finances may have weathered the storm, funding from the Conservative government continues to be drastically cut to both Guildford Borough and Surrey County Councils.

“Together with the serious financial management failings of the Conservatives at SCC, many of our services have been impacted, especially those that support the most vulnerable and there appears to be no end in sight to further cuts. For example, the loss of the contribution by SCC towards our voluntary and community grants will affect many of our residents and make life harder for our over-stretched volunteers.

“A number of our residents don’t understand the difference between funding cuts from SCC and GBC. All they know is that they are worse off. At some point local authorities will have to stand up to the Government’s austerity programme. Our schools, hospitals, social services and our roads are failing no matter how well GBC might manage the budget for 2018-19.”

The proposed 2018-19 budget and other financial plans will be discussed for recommendation at the council’s Executive meeting next Tuesday (January 23), for final discussion and approval by the full council on February 7.

Cllr Susan Parker (Send), the leader of the Guildford Green Belt Group, said: “What the press release does not make clear is that most funding for the proposed £92 million investment programme will be borrowed. This was discussed extensively at the latest executive advisory board (which was webcast).

“Central government grant contributions to local government funding will fall over the next few years, to almost nothing.

Cllr Susan Parker.

“Furthermore, the borrowing is not limited to the next financial year but will continue for some years. If all schemes proceed, it is proposed to borrow £337 million by 2023 – and current financial projections indicate that this won’t be fully repaid for up to 30 years. The capital programme is very aggressive, and it will be funded locally, not from central Government contributions.

“Some of the investments that the council currently hold, offsetting that borrowing, are in investment property. A considerable proportion of our investments are held in investments rated below AA down to BBB+ or less. These are something of a risk.

“These are not normal times. In the current financial climate, with Brexit, austerity, and an uncertain economic future, this is too much of a gamble, in my opinion. I am worried that the Executive are mortgaging our borough for uncertain future returns.”

The Guildford Labour Party has also been asked to comment. It will be published when received.

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