Monday, November 1, 2010

Spending review and the city council

Next Monday there will be a special full meeting of the city council to agree the council's annual revision of its four-year rolling medium term (financial) strategy.

Normally the MTS would be approved at a normal meeting of the council but the meeting on the 21st October was presumably deemed to be too soon (one day) after the HM Treasury's spending review. Also given how many politicking motions were introduced at that meeting it's probably a good thing that this important consideration wasn't dwarfed.

The council operated on cautious assumptions when devising the strategy so overall there are, fortunately, no nasty surprises for the city.

One notable assumption was that there would be no compensation for the council tax freeze, but as I expected, the original promise is being kept and the funding will be to match what would have been a 2.5% council tax increase. It would therefore be scandalous for the city council not to take advantage of that multiplier; it does seem that the Lib Dems have at last listened to sense on this one.

The budget for next year won't be set until the spring; I hope councillors can be relied upon to follow through on the council tax freeze. Of course I hope they go further and fund a reduction through councillor allowances.

On the debit side it seems that 'front-loading' of reductions to the formula grant will create a corresponding vaccuum at the beginning of the spending review period, which in the case of an indebted government and a debt-free council is probably the right way round.

Overall this review is undoubtedly the right thing for the country. If we stayed in denial of the need to eliminate the structural deficit we would just be adding more and more to the final cost of fixing the public finances. Some things will be difficult but in the long term welfare reform will be good for our society and a slimmed-down public sector will help the private sector grow.

In Cambridge I urge the ruling group to concentrate on providing good value for money. We are being freed from swathes of government targets and ring-fenced budgets and should be able to afford high quality basic services if we take a good look at what we should and shouldn't be doing. It's time for zero-based budgeting!

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