Why we are set to trim our spending even though we’re better placed than many

By Alan Melton

Leader,

Fenland District Council.

This letter is to set out the current economic situation that we now find ourselves in and how it will affect Fenland.

No doubt Jill (Tuck) will be putting out similar messages from the county council.

The Prime Minister, Chancellor and Chief Secretary to the Treasury have all been making us all aware of the dire economic situation the country now finds itself in.

The current situation reminds me of the last time the Conservatives took power in 1979.

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Then the country was suffering from the ravages of the “winter of discontent”, rampant government borrowing and inflated overspending, with ministers chucking money about as if there was no tomorrow.

Well here we go again, this time the Conservatives with their Liberal Democrat coalition partners have to clear up the mess.

The Prime Minister has already told us that interest alone on the current borrowing requirement could hit �70 billion per year and that current borrowing is �155 billion.

All of us, particularly those of us in the public sector have been told to expect the brunt of the cuts and savings to come.

Fenland District Council will not be immune from the measures that we are all expected to take.

At this stage I do not know the full of extent of where the axe will have to fall. We are all in it together!

The Prime Minister has set out a number of questions that need to be answered and acted upon, those include:

Why do we do it?

Do we have to provide it?

Could we do it better?

Fenland has been asking these questions and answering them successfully since 2003.

Our customer satisfaction rates and economic management is one of the highest in the country, praised by inspectors and auditors alike. We have also been praised by former ministers and (then) shadow ministers.

We have a firm foundation from which we start the new process.

We run a tight ship, but it has to be run even tighter now!

In 2009 we set ourselves a target of saving �2 million by 2011, this is on target and will be delivered, and this is on top of the Gershon savings we had already made.

However we now have to move faster and save further.

The announcement that we will be unable to raise council tax next year will cost us �188,000 in 2011/12.

My own suspicion is that there will be no increase in central government grant next year either, taking into account inflation, this will represent a real cut.

In addition we have been informed of the following cuts already:

�78,000 from the Cohesion Fund

61,180 from the Local Authority Business Grant

�855,000 from the Housing and Planning Delivery Grant

A total of �994,000

As ring fencing has been abolished, this is a cut across all services.

However, I can give some comfort to members, because of the steps already taken by the council we have a revenue reserve of �3 million, which is well above our bench mark of �2 million.

Luckily this sets us up for the future; we can manage the current round of reductions in grant and allocations. But there is no room for complacency and we don’t yet know about the medium and long term outlook.

We are constantly reviewing our cost base. The recent changes to the management team have resulted in significant changes and cost savings; those measures included the departure of Tim Pilsbury, Perry Holmes and Matt Taylor, neither of whom has been replaced.

Support staff to these positions has also been rationalized.

Scrutiny committees and staff committee will continue to monitor performance and budgets.

As far as capital is concerned, we shall not have an indication of any changes until after the budget, 22nd June and the Comprehensive Spending Revue (CSR) early next year.

Our partners and joint funders are all awaiting the results of these reviews, these include: the County Council, EEDA and Horizons, consequentially, all spending decisions will be put on hold until the facts are known.

Today, I have asked officers (CMT) to look at budgets and procurement of all departments.

I consultation with cabinet colleagues, I have asked officers (CMT) to look at and review all contracts that may be pending and not to sign any further orders without consultation with me or the relevant portfolio holder.

In the coalition document, local authorities have been asked to review all of their publicity, paid newspaper articles and statutory advertising, which has considerable costs. This will all be rationalised.

We shall be briefing our MP, Steve Barclay to make him aware of the situation. Sandra and I met with him last Friday.

I attended a meeting, also on Friday with all local MPs and Leaders, including Andrew Lansley M.P. who is a member of the cabinet. We were assured that all authorities are in the same boat and that all Conservative and Liberal Democrat Members of Parliament are spreading the same message.

Cambridgeshire has traditionally been poorly treated by central government, we were always at the bottom of the pile when central grants were distributed, when this was rectified, we were then hit by the “floors and ceilings” mechanism.

Cambridgeshire leaders are seeking an early meeting with Eric Pickles (Secretary of State, CLG) to explain our history and current plight.

I hope this letter has clarified our current position. As and when further information is available I will write to you and also brief you in council.

We have been asked by Members of Parliament to ensure that the public are kept informed, so these facts will be released to the press and public.

Members and public should be aware as to whom to blame for the current economic outlook!

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