Watch the above video here.
Cllr Andy Wilson is the Cabinet Member for Finance and Performance, and is a councillor in Larkhall ward.
In December, Lambeth Council’s Financial Planning Report came to cabinet, painting a picture of the Council’s finances in 2020/21 and over the medium term.
It will come as no surprise that there has been a financial impact on the Council because of the pandemic. Since March, the Council has needed to make essential extra spending to support vulnerable people, while at the time seeing a loss of income due to the Covid-19 crisis.
Despite the upheaval we all faced in our lives, I am proud to report that some disruption aside, essential services were continued to be delivered by Lambeth Council during this challenging time. Performance of Borough Plan key performance indicators presents a broadly positive picture with more green rated indicators than red.
This should be commended not only considering the public health crisis we are still living through but also the consistent reduction in funding from successive Tory governments over several years whilst corresponding demand across many service areas has increased.
However, our ability to deliver this support in partnership with our communities whilst maintaining essential services comes at a cost. This cost cannot be ignored, yet this government continues to ignore the calls from councils to provide proportionate funding to match the scale of the crisis.
Since March, an estimated £52m has been spent to protect our residents and support them through lockdown and beyond. Since their grand rhetoric, imploring councils to do “whatever it takes” to get through the Covid-19 crisis, this Tory government has returned to type when it comes to funding local public services.
They have reneged on their promise to local government but more importantly to the communities they serve.
This, added to the impacts of a decade and counting of Tory-led austerity leaves us needing to find new savings within our budget to cover these costs. Under best-case scenario modelling Lambeth is facing a budget deficit of £13.4m over the next five years.
However, this depends on the severity of a second wave, continued lockdowns, and if government does not provide sustainable, long term funding.
As London and England has faced enhanced restrictions over winter and with the months ahead likely to be a particularly challenging moment in this fight, we cannot be complacent about the best-case scenario being realised.
Many councils will be facing a more perilous situation with their finances but due to our prudent financial management, we will be able to absorb this budget deficit through a mixture of income generation, savings and use of reserves.
The Greens’ budget wanted to cut reserves, making us less prepared for a situation such as this. Our policy of modestly increasing reserves to build them back up to prepare for Brexit, an uncertain economic outlook and government cuts, was exactly why we took those decisions.
Many of those uncertainties have not been resolved by a succession of Conservative-led governments. Yet again local government faces one of the most precarious moments in its history as the full social and economic impact of Covid-19 remains unclear alongside our long-term funding position from government. All this whilst we transition to a new UK-EU trade deal, with all the disruption and near-term consequences that will have.
The Chancellor of the Exchequer, in his Spending Review announcement, continued the piecemeal tradition of one-off funding that councils have had to contend with for years, restricting their ability to plan for the long term. Fundamentally, his Spending Review does little to change the fact councils will be forced to make cuts in 2021 onwards to balance their books.
Almost half of the Chancellor’s £2.2bn increase on the core settlement for councils assumes that they will raise taxes locally. As government grants fail to keep up with long term rises in demand for essential services, councils will increasingly be forced to fund services from tax revenues, exacerbating a squeeze on local budgets and taxpayers since 2010.
Council Tax and the Adult Social Care precept are sticking plasters, long-term pressures require longer term funding solutions and no clear plan on the future of social care and how we pay for it has been forthcoming from this government or any of its Tory predecessors.
To add insult to injury, and a reminder if needed that Tory austerity is not over, there will be a pay freeze for public sector workers, including the care workers the Chancellor, the Prime Minister, and millions up and down the country clapped for just a few months ago and will be doing so again under the current lockdown.
This is par for the course from Tory-led administrations: devolve the axe and the tough decisions. But as we’ve demonstrated during this crisis, it will fall on local government, and our partners, to pick up the pieces. Despite these uncertainties, as a council we have sought as best we can to do what is needed during the pandemic and will continue do so in the future by supporting our communities through a recovery that works for everyone.
Cllr Andy Wilson