To say that we had to make some difficult decisions this week would be the understatement of the century, after Eric Pickles announced on Monday afternoon the final settlement for Local Authorities for the next two years, the full horror of the scale of the cuts that have to be made started to sink in.
We had prepared ourselves for what we thought was the worst case scenario, and though extremely difficult, we had managed to put together a budget that would meet the 28% reduction in Government Grant over four years as highlighted by George Osborne in the Comprehensive Spending Review in October. We had not however contemplated that the settlement would be even worse, and as it turns out we will be getting a reduction of very nearly 28% over the next two years. So even though we had a very traumatic Cabinet meeting on Wednesday night where we agreed on a plan to save just over £2 million, we have to go back to work over the next 6 weeks and find another £250,000 for next year, followed by another £1.1 million the year after.
There is no way that savings of that level can be made without radically changing the shape of the council, and that is exactly what we will have to do, it certainly is not going to be easy.
I made the point during cabinet that whoever caused the country’s debt problem, we all knew that cuts were coming and that it would be very difficult. It would require all councillors to respond to the challenge and we would have to work together with the officers of the council to achieve some sort of solution. I did say at the meeting that the country was massively in debt, that the situation could not be allowed to continue and that everyone was going to have to share some of the pain.
Well that was Wednesday and gosh how fast things change. By Thursday morning I found out that we are all saved, Alleluia, the country isn’t in debt at all, we just have a bit of a deficit problem, and the purveyor of this wonderful news, none other than our new Lib Dem councillor in Shepton. He proudly announced on his website, (well he used to say it’s not his, but finally admitted in public on Wednesday night that he shares in the organisation of it!!!), that I was wrong to say the country is in debt, and that we merely have a deficit.
Well being the product of a progressive education in the 60’s and 70’s, and not being a University drop out like my illustrious adversary, I thought I’d better check. After all, If the country is not in debt, why are we worrying, it’ll all be fine, if we just ignore it it’ll go away, so I did a bit of research.
There is a very useful website http://www.debtbombshell.com/, this site looks at all the government data that is available and even provides a debt counter to keep tabs on the National Debt. (See above) As I write this the clock reads £982,350,000,000 and is going up at a rate of about £8,000 per second, yes that’s right £8,000 per second, £540,000 per minute or £32.4 million per hour. It is forecasted that National debt will increase by £167 billion this year and reach £1.1 trillion next year while it is being brought under control. A trillion is a thousand billion and it would take about 31600 years to count to a trillion at normal counting speed.
So the country has massive debts, the highest in our history, and even higher than at the end of the Second World War, the previous record. As a matter of interest, we only paid off the debts from WW2 less than 10 years ago, so the current debt mountain will not disappear quickly.
The deficit that everyone talks about is the difference between tax income and government spending, and this year we will spend £167 billion more than we take in tax, and that money only goes to increase the overall debt mountain. The interest payments to service the debt for the next financial year amount to over £42 billion, this is a the third biggest individual bill that the government face, behind the NHS and Education but ahead of defence for example.
So our local Lib Dem economist appears to be talking out of his hat, he has already be branded “unpleasant, distasteful and unprofessional” (MDC Standards Board October 2010), and now this rubbish.
He has contributed nothing, nada, zero to the budget setting process despite being given full access to the figures and having been invited to joint cabinet and shadow cabinet meetings, he continues to hide behind his USA based website, sniping from the sidelines, spreading misinformation and innuendo whilst trying to stir up public unrest. He offers no alternative, follows the Lib Dem negative campaigning rulebook to the letter, and supports his beloved Tessa to the hilt.
Oh and while we are on the subject of debt, the Lib Dems know all about that particular matter, they had to conduct a fire sale of the council house stock in Mendip to clear £16 million debt the last time they were in power here and they left Somerset County Council shackled with £400 million of debt, after years of profligate spending. The County Council now have to make much deeper cuts due to the fact that they have to service this huge debt making the situation much worse than it would have been if the authority had been debt free. At Mendip, the Conservative run council has zero debt, no interest charges to pay, so even though deep cuts have to be made, we don’t have to pay interest to the banks as well!!
This is an e-mail response from Ken Maddock, leader of Somerset County Council
ReplyDeleteUnprecedentedly tough times, John.
On top of the problems Gordon Brown has given us, Somerset has its very own 'home-grown' debt problem. The funny thing is, the local LibDems keep saying it's not debt either. "It's just the council's mortgage," they say. And "borrowing is there to have the things you cannot afford." And "it's just a small proportion of the council's turnover."
When they came into office the County Council's debts were £18 million; by the time they left office they were £357 million.
Now, what ever way you look at it, I am having to write a cheque every year for £36 million just to service the debt. That's £36 million I cannot spend on looking after the elderly, protecting children from harm, mending potholes in the road, etc, etc.
And a Somerset child leaving school age sixteen today, as a council tax payer will be saddled with those debts until he is 57 years old. I think that is really immoral.
You know, it's true what they say, "public borrowing is just delayed taxation". And even Tony Blair recognised that "financial prudence is the essential prerequisite for social justice".
Ken Maddock