EXCLUSIVE: Southwark Council faces £8 million cuts despite ‘end of austerity’

Katherine Johnston (28 February, 2019) Politics Transport

More than half the council’s income comes from local sources after years of funding cuts from central government

23798"Unprecedented": Cllr Victoria Mills on the funding black hole

Swingeing government cuts are leaving Southwark Council ever more reliant on income-generating activities to fund basic services, from special needs education to caring for the elderly, this year’s budget reveals.

Despite the Conservatives’ claim that the end of austerity is in sight, budget papers published this month show Southwark Council lost £8.6 million of funding from central government for next financial year, and has to fill an overall shortfall of nearly £20 million to balance its books.

Plans to close the gap rely on making ‘efficiency savings’ of nearly £14 million, and collecting nearly £5 million from ‘fees and charges’; like controlled parking zones, or CPZs. But there is still £3.2 million left to find.

Back in the 2010-11, eighty per cent of the council’s income came directly from the then-coalition government, with just 20 per cent of council income collected locally.

As austerity bites further, that proportion has skewed to the extent that now more than half the council’s income comes from local sources.

Speaking exclusively to the News, Councillor Victoria Mills (pictured), whose portfolio oversees the finance, performance and Brexit, denied the Council was pursuing a policy of actively creeping more CPZs into Southwark to raise much-needed cash.

She said consultations only occurred when there was resident demand, but could not promise this would stay the case in future.

Southwark’s buoyant economy has, to some extent, cushioned the impact of a decade of cuts. But the council is still grappling with austerity-led policies, economic uncertainty, and rising inflation.

As the News reported last month, Southwark is raising council tax by 2.99 per cent – council tax had been frozen since 2009 – and has set up a £2 million Brexit fund as part of its deal-or-no-deal scenario planning. 

One of the biggest pressures is the seemingly disastrous move to Universal Credit as the latest figures show 7,365 people in Southwark have now moved onto the new system, a number expected to soon double. Already, they have racked up £4.7 million in rent arrears – cash now missing from the council’s housing budget.

By the end of the 2018-19 financial year, the council is expected to have accumulated an £11 million deficit in its education spend, as government funding fails to cover the costs ranging from needing specialist schools, facilities and support for children with special educational or other needs.

The Liberal Democrat opposition says more savings can be found, arguing cutting the council’s spend on ‘propaganda’ and press officers would save £320,000, but Cllr Mills defended the ‘small and nimble team’, arguing “the Lib Dems are always asking us to improve consultation and the work of the press team is a really important part of talking to our local residents.”

She also said the property licensing scheme the Lib Dems believe could net the Council an extra £415,000 is backed by the council, but is unlikely to get government approval before the financial year is out.

 

Key budget details

  • In 2019-20, the Council has £8 million of cuts to its government funding, but has to find an extra £25.9 million to cope with rising costs and demand for its services.
  • Adult social care has to save £5 million, but £4.7 million of funding is committed to make sure homecare, and bed-based care packages are protected
  • Children’s services will get £2.2 net increase in funding, but have to make £300,000 savings in education  At the end of March 2019 the dedicated schools grant deficit is expected to hit £11 million
  • The environment and leisure department will save £340,000 by ‘rationalising our litter picking schedules to focus effort where it is most needed’. Eco-friendly street lights will save £0.1m.
  • Agreed CPZs will bring in £0.5 million, and a further £0.7 million could be netted by zones yet to be formally approved.
  • The Council expects a £4.7 million overspend finding temporary accommodation for those in need, with costs only expected to rise with the next stages of Aylesbury estate demolition.
  • Council staff are in line for a two per cent pay award – adding an extra £4.5 million to the annual pay bill.
  • Free swimming and theatre trips for children, reopening the Blue youth centre, and a community toilet scheme are all earmarked in the budget.

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