BCP Council running up £1,315 extra debt for every household; ruling Conservatives pass it off as magic money tree

7 April 2022

  • Younger generation saddled with debt repayments - "spend now, pay off in 50 years"

  • Small print confirms: BCP is living beyond its means

  • Widespread concerns over long list of risks in casino budget

Conservative-run BCP Council is racking up an extra £220 million of local taxpayer debt over just two years. This equals £1,315 more to be borrowed for every single household in Bournemouth, Christchurch & Poole.

Disingenuous local Conservative propaganda to the public avoids acknowledging that new spending between 2021 and the next local election in 2023 is with borrowed money. Instead they try to pass off new pots of money as some kind of consequence-free dividend or windfall. There is not in fact a magic money tree for the local taxpayer, and this borrowing against future Council Tax revenues will need to be paid back with interest by future generations.

"There's good in this budget"

Green Councillor Chris Rigby said during the annual Council budget debate: "There is good in this budget, there is. I particularly welcome the extra £20m for 'green futures'. Is it enough? Probably not. But it's what we've got at the moment.

Cllr Simon Bull speaking on climate actionGreen Councillor Simon Bull also spoke at the meeting, welcoming BCP Council's expanded Climate & Ecological Emergency staff team under a new head of service, adding that he looked forward to seeing how they progress the work underway. He said he was "not ready to give three cheers" for the update on the Council's climate action, but that the progress being made was to be welcomed.

 

"The younger generation will be dealing with the impacts of this budget alongside climate change"

Cllr Chris Rigby speaks during budget debateCllr Chris Rigby also used his budget debate speech to express concerns over the longer-term impact of the borrowing spree: "What I'm concerned about is who's paying for it. It's who you're 'investing' in, it's the children. Because this is being built on borrowing, and it's 50-year borrowing. There are projects like the Wide Area Network which are going to be out of date by the time they're paid off. And I'm concerned that that's going to be the same with other investments here, piled on for the future.

"I really hope that I'm worrying about nothing, but we've got to bring up these concerns - we're here to scrutinise."

He added later: "It's going to be the younger generation dealing with the effects of climate change - and now locally they're going to be dealing with the effects of this budget too. This is a risky budget, full of issues, it's a completely different approach to the tried-and-tested ways. 

"Unfortunately, the new money isn't even cutting to the heart of solving any issues."

Both Green councillors abstained in the councillors' vote on the budget, which the whipped Conservative majority duly pushed through. Councillors are expected to consider responsibility to taxpayers in future as well as year-to-year.

"Councils are not there to be run like businesses"

The Conservative administration is facing criticism for its insistence that BCP Council should be run "like a business" rather than on conventional public service principles. They appear not to recognise that your Council Tax is not like a business' income, and that the impact on local residents and local taxpayers if the Council were to run out of money (as has happened to a number of other councils in recent years) would be far more serious. 

Cllr Rigby commented: "Councils should be there to provide public services, they're not there to be a business. Conservative dogma expects everything to be a self-sustaining business, whereas actually public services give greater value than just generating a profit."

Risks in the budget

Other points generating concern from an assortment of opposition councillors during the budget debate included:

  • The 2022/23 budget relies on BCP's beach huts being sold, out of direct Council ownership to a Council-owned "special purpose vehicle". This complicated equity release-style scheme will generate 20 years of future beach hut income as a lump sum, followed by no beach hut income for the following 19 years. Controversy broke out on Council floor over the Leader's shifty withholding from opposition councillors of "draft" advice from KPMG addressing whether the scheme is even legal.
  • The new budget will lead to the Council having burnt through over 80% of its general reserves - some £137.8m - in just two years from 2021 to 2023. The Council's permanent Chief Finance Officer wrote that "the council's reserves cannot be considered adequate" based on current deficits.
  • An unaddressed funding gap for the subsequent financial year 2023/24 remains of £28.2m. 
  • The budget depends on full achievement of highly ambitious further efficiency savings following 2019's merger of three councils into one - despite barely one-third of last year's savings targets being achieved.

It all comes down to 11 years of Government cuts to councils

The local Conservative administration is openly embracing a "spend, spend, spend" approach - subsequent to the local Green Party highlighting to the public negative effects on local services of 11 years of Conservative Government cuts to councils.

Unfortunately, councils rely so heavily on central Government funding that this kind of 'casino, spend-now-pay-later' council budget is essentially the only way BCP Council's Conservatives can slightly make up locally at this point for their Government's ongoing austerity agenda.






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