We got details of the provisional Local Government Finance Settlement this evening, the money that the government gives Basildon Council every year to help fund local services such as our sports centres and rubbish collection. It wasn't very good. The three-year settlement gives Basildon an increase above the CPI measure of inflation of 2% in 2008/9, 1.32% in 2009/10 and 1.55% in 2010/11, which sounds fine until you realise that the spending increases caused by government policy are well above that, most notably Labour's failure to fully fund concessionary fares for the over 65s. Basildon got less than many other Essex councils; for example Castle Point gets a rise next year of 3.1%.
This settlement gives Basildon a shortfall of £751,000 over the three-year period against our very conservative projections and the Labour government has coupled this with an announcement that Councils will be capped from making council tax increases above a certain level...which they won't tell us. So, we may end up having to make service cuts as a result, which could mean putting people out of work in the middle of a recession. The Labour members on the Cabinet resorted to bluster and then downright dishonesty. We were told that this shortfall in revenue funding was is some way made up for by the capital funding that we had received for regeneration projects, but of course they are not in any way related. We were told that it would be worse under the savage cuts of a Cameron Conservative government, but the Shadow Chancellor has already made it very clear that a rapid and imprudent reduction in government spending would not occur. We were told that the money could be made up from Council reserves, which made me wonder if they had been reading the same financial reports as me. The Labour deputy leader in particular seemed to find the situation amusing.
What is going on is that Brown's economic failures are coming home to the British people. Because government finances are in a mess then Britain is badly placed for an economic slowdown and a debt-ridden and high-taxing government is running out of both ideas and cash. That is why Basildon is feeling the pain and why the local Labour party had no option but to talk nonsense in an effort to defend the indefensible.