Letter: It’s Good To Tell Public Council Tax Increase In Cash Terms

Published on: 14 Feb, 2016
Updated on: 13 Feb, 2016

From Alderman Gordon Bridger

I write regarding Guildford Borough Council’s (GBC) new budget and increase in council tax.

Gordon Bridger.

Presenting the increase in the budget in cash terms, £5 per head increase, is a more sensible way of of setting out what we have to pay rather than the percentage which gets many people people worked up about it.

Only £5 ! – and as a proportion of our total tax bill (Surrey and Surrey Police) – a mean of £1,600 per year, the GBC part is only 9%.

Last year it worked out at around £69 per person. The GBC costs of services is under 0.5% of average income. So what the the fuss? I think most people would be happy to increase our tax by £5 even £10, maybe £50 per year if it was well spent.

So why do we have unprecedented numbers of residents expressing concern about the council not being able to fund the Electric Theatre , the museum, and no doubt the Yvonne Arnaud Theatre next?

We are according to one consultancy the richest community in Britain – London apart, and we cannot afford to support a wide range of cultural facilities. Why?

The problem is that we have a budget forecast that over the next four years we need to make cuts in order to be within the Government forecasts of what we can spend over the coming years – we need according to these forecasts save around £1.5 million a year.

Now our finance department, together with housing and refuse collectio,n is an exceptionally well run department – but do you know what the underspend is every year? Just about £1.5 million over the last three years.

In theory, if we got our forecasts right, no cuts would be be necessary – and with Government likely to relax it Soviet-type system of central planning in future we might well be able to increase our council tax by more than £5 per year.

Anyone involved in financial planning will know that staff making forecasts will always over estimate their expenditure as they get no kudos for getting it right and will get stick if they get it wrong.

However, a canny finance officer should know this, and could and should come up with forecasts which are optimistic, neutral and pessimistic. However, almost invariably they come up with one forecast – the most pessimistic one. Thus huge underspends  (between 15% and 20% of the forecast deficit).

So what should responsible councillors do? Ask for more than one forecast with a probabilities attached to them. The responsibility than lies with the councillor not officers to decide. If there is an over-spend in one year it is unlikely to be much and can be rectified the next year.

Is this a sensible way of managing the budget? Yes. How do I know? Because when I was a councillor responsible for finance I sat down with the finance officer and he suggested three scenarios – all perfectly genuine and I recommended the more optimistic forecast, the one which actually reduced the budget.

Do you know what? We did not overspend – but – and this is a big but, since the budget in cash terms every year is so trivial no one noticed or even cared when I informed them of this unusual achievement.

My advice to current councillors is to make sure electors are told the actual trivial cash amount of a tax increase per year, improve your forecasting, and spend to the maximum allowed by Government.

When the Government relaxes it ridiculous controls, as it says it will, you can spend more on a wider better quality range of services.

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