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Cabinet agrees budget proposals that give Medway cheapest council tax in Kent - again

Date: 22/02/2012           Category: Finance

Medway’s council tax will remain Kent’s lowest under proposals to keep it frozen for a second year.

The charge for an average Band ‘D’ property will remain at £1,119.15 a year – around £130 cheaper than anywhere else in the county - if the proposals are agreed.

The council tax freeze forms part of Medway’s plan for a balanced budget, which went before the council’s Cabinet yesterday (Tuesday, 14 February) and will now go before Full Council later this month.

The budget proposals for 2012/13 have taken into account a shortfall of £14.3million from increased demands and a reduction in government grant of 8.3 per cent. This follows an unprecedented cut in government funding last year of 11.9 per cent and an overall deficit of £23.5million, which had to be found.

The government has stated that extra cuts to funding will take place for two more years after this budget until 2014. And it is widely expected there will be more reductions after this date.

The proposals for next year’s budget aim to safeguard frontline services while proposing where savings can be made.

They reflect the fact that staff are one year through a three year incremental pay freeze – saving the council £1.6million a year.

And they take into account that the council's Better For Less efficiency programme is on target to make cumulative savings of almost £14million over three years.

As well as proposing a budget to fund all the vital services the council provides - such as schools, highways and weekly waste collections - the proposals include funding for numerous other important initiatives.

These include an extra £100,000 for the council’s apprenticeship scheme, geared towards helping young people get a foot on the career ladder in these difficult times.

Money has been put aside to support the Medway Youth Pass – which provides bus travel at a reduced cost, and £68,000 has been found to provide one-to-one tuition for around 600 primary school children at Key Stage 2 level.

In addition, an extra £2million is being provided on last year’s budget for children in care and £75,000 will go towards improving leadership and governance in schools, under the proposals.

Money has also been allocated to fight the Mayor of London’s Thames Estuary airport proposal and free swimming for under-11s and over 60s will continue in council pools.

There will again be free parking days in council car parks across Medway in the run up to Christmas and the area’s 19 Sure Start children centres are safeguarded, under the budget going before Full Council.

In addition, car parking charges will be frozen for another three years until 31 March 2016 following a 20 pence per hour rise from 1 April, under the proposals.

This follows a three year freeze to the cost of car parking from 1 April 2009, which was put in place to help local businesses and traders by encouraging shoppers to use Medway’s town centres.

Following that three year freeze in 2009, there has been a VAT rise to 20 per cent – as well as rising costs in maintaining car parks - and the council now reluctantly has to propose to put up car parking charges.

But this rise still means that Medway will have cheaper car parking than many other authorities in Kent.

And longer stay parking in Medway - which shoppers seek – will actually be significantly below most other areas in the county, with three to four hour parking costing £1.50 or lower in council car parks.

This is less than half the price of some of the most expensive districts in Kent and compares favorably with many local councils who have proposed steeper increases or even doubled the cost of long stay parking.

There is no proposed rise to residents’ or business’ parking permits in Medway.

Libraries, parks, greenspaces and festivals are provided for in next year’s budget proposals.

However, some savings need to be made to cover the huge £14.3million hole in the council’s finances due to government cuts and increased demands. The draft budget in November had identified savings that reduced this gap to £6.2million.

These additional proposals to close the gap include proposed savings made to the council’s supporting people budget, the government programme for funding, planning and monitoring housing related support services. This reflects the fact that there is now no longer a dedicated funding stream for this from government, and that council funding overall is significantly reduced.

A review of Special Education Needs (SEN) transport will also take place, under the proposals, with officers examining all individual journeys over £40 a day - including those by taxi - to see if savings can be made while ensuring transport arrangements continue.

Elsewhere, the council will continue to take away bulky waste for residents – such as furniture – but, in line with other Kent authorities, proposes to only waive the fee for one item a year, charging £17.50 for each after this. Many councils charge for removing all bulky waste.

Cllr Alan Jarrett, the Deputy Leader and Portfolio Holder for Finance, said: “The council received an unprecedented cut to its funding last year, and we face another huge reduction this year.

“But I am pleased to say that these budget proposals will allow us to make efficiencies while maintaining the vital frontline services we provide for our 257,600 residents every day of the year.

“We have also found funding to keep free swimming for under-16s and over 60s, bring about one-to-one tuition for primary school children where needed and to ensure our popular apprenticeship scheme, aimed at getting young people onto that vital first step on the career ladder, continues.

"We are also able to continue with the Medway Youth Pass, along with other important and popular measures, and the increase in car parking charges will help to fund our overall commitments."

The council’s budget proposals will go before Full Council for a decision on Thursday, February 23.


How the figures add up?

Councils are mainly funded through a combination of council tax, grants paid by central government (mainly from business rates) and locally raised income from charges

The total proposed revenue budget for next year is £333.440m, of which £127million is a government grant for schools.

Medway Council traditionally receives less than other similar sized unitary authorities in funding, but ministers have not taken this into account yet again, and have failed to make a proportionate cut in Medway’s government funding for next year.

This means the council faces tough decisions as it has even less money to provide services than many other local authorities in England – even though it has been continuously judged as providing value for money.

Medway Council’s total formula grant, which has now been cut for a second year running, stands at £78,280million for the 2012/13 financial – or £304 per person - as opposed to £85,402million in the previous 12 months.

This is in stark contrast to other similar sized councils, which still get far more than Medway Council gets in its government grant for the 257,600 residents it serves

For example, Kingston-upon-Hull – which has a population of 271,000 - gets nearly £145million in its grant settlement, which is £534 per person.

And Brighton and Hove, with a population of just 260,000, gets £101million or £390 per person. Plymouth – with 265,334 people - is given £105million – just over £396 a head.