Hounslow Council is considering increasing Council Tax for the year 2020-21.
‘The ongoing impact of a decade of government cuts to its budgets and continuing financial pressures mean that Hounslow Council is having to consider increasing Council Tax by 3.99 per cent for 2020/21’.
Cllr Shantanu Rajawat, Cabinet Member for Finance and Corporate Services said:
“The council continues to face major financial challenges due to austerity, particularly from the ever-growing demand on adult social care and children’s services. We therefore will need to make tough decisions in relation to Council Tax increases whilst protecting essential services for our most vulnerable residents and communities.”
The increase, which will be put to a Council meeting on 25 February, will mean an increase of £48.92 a year for a typical Band D property (excluding the Greater London Authority precept). According to LB Hounslow the increase would have been bigger if they hadn’t been so careful with the accounts:
‘Sound financial management has enabled the council to opt for an increase lower than last year’.
The Conservative opposition within the council, nine out of ten of whom represent Chiswick, does not agree that there has been sound financial management.
Photographs above: Cllr John Todd; Council leader Steve Curran
Failure to ensure sound financial management
Councillor John Todd says:
“Not one figure or example of good prudent practice or effective management is produced to justify the increase suggested”.
In fact, he says, there has been a “significant failure” by the council to ensure sound financial management.
“In June 2019 the London Borough of Hounslow Head of Governance reported to the Cabinet that their oversight of the LBH trading companies was materially wanting”.
The reference to ‘LBH trading companies’ refers to Lampton 360, which was set up in 2012 as a wholly owned subsidiary of the council, to run recycling, housing and green spaces in the borough, and turn a profit for the council in the process. This says Cllr Todd, has not been achieved.
“These entities had then borrowed circa £50m from LBH, had significant running costs and have yet to show any return. The justification to have these separate trading companies in some cases duplicating what’s done by council staff is not readily explained. They’ve been operating since 2016”.
He says he does not accuse council staff or councillors or financial impropriety, but he does accuse them of “slack” and “sloppy” use of public funds.
Lampton 360 Governance Review June 2019 criticised operation of Council owned companies
The report Cllr Todd refers to was a report by Peter Large, Head of Governance, presented to the Cabinet in June. In summary, the report says:
‘Generally, the existing framework has worked well and, subject to some important exceptions, has been applied and followed by both L360 and the Council’.
Among the important exceptions is this:
‘it is a requirement of the Shareholder Agreement that each subsidiary should submit an Annual Business Plan to the Council for agreement. For various reasons, this did not take place in 2018/19.
‘This is a serious omission. The submission of business plans for agreement, and the subsequent reporting of achievements in meeting business plan objectives through the year, is a key component of the governance framework, assists in transparency, and is one of the key mechanisms through which the Council can exercise control over L360 activity’.
‘Each company’s Business Plan should set out the key objectives of the business for the business plan period, how and when those objectives will be achieved, what resources will be required to deliver them, and how success will be measured. Without the opportunity to approve or provide input into business plans, or to approve any changes to business plans if necessary, the Council cannot assure itself that its own or L360 objectives are being achieved’.
Peter Large’s report concluded that Lampton 360 needs to produce business plans for the Cabinet’s approval and that the Council needed to ‘recognise its role as the commissioner of L360’s services’, and develop a proper commissioning strategy.
‘There is a need for more clarity and better understanding across Council (both at officer and member level) in relation to roles and responsibilities with respect to L360’.
‘Savings’ not actually saved
Cllr Todd also criticises the way in which Hounslow Council has identified savings over a five year period, but not delivered them.
“In late 2019 savings which had been agreed by Cabinet members and senior officers over a period since 2014, totalling £16m, were removed or rebased. Put simply, unrealisable savings sitting as IOUs in someone’s desk slowly collectively building up to a huge sum making them making the description of them as being ‘savings’ as utter nonsense”.
Unallocated funds not used
He is also concerned about unallocated funds not being used.
“LBH continues to have unallocated funds, such as funding from the government called New Homes Bonus. Currently £20m plus NHB is available with some of this funding being carried forward unused from the last financial year. Hounslow has a £8.1m council tax shortfall in this budget and it could be eliminated or reduced by using this funding”.
“We’ve yet to see the Council Budget report which is due in February. The Government grant was increased this year by 4.45% with additional funding for adult and children’s services. This Labour Council’s manifesto promises to keep council taxes to a minimum. It demonstrably hasn’t”.
2% increase ringfenced for adult social care
Local authorities have a legal duty to fund care for those who pass centrally set needs and means tests. As the population ages, the need for adult care is spiralling. According to the Institute for Government:
‘Demand for publicly funded adult social care is likely to continue rising faster than money local authorities have to spend on it. Unless local authorities can make further efficiencies, the government will either have to spend more or accept that local authorities will have to reduce the quality of, or access to, care’.
Two per cent of the 3.99 increase is an adult social care precept, an increase which central Government has said it expects councils to make. The adult social care precept is ringfenced to protect adult social care services for the most vulnerable families.
Leader of Hounslow Council Steve Curran’s commented on the proposed increase:
“The council, residents and businesses face significant challenges for the foreseeable future, but despite the cuts to our budgets, we are committed to providing good quality services that are viable and economically sustainable. We must find more innovative ways of dealing with these new challenges, especially with regard to climate change and becoming carbon neutral by 2030. We will continue to put significant resources into improving air quality and green spaces in the borough, and I look forward to working with residents and businesses to achieve this.”