This is the first budget since the council election, so I propose to measure this administration against the Leader’s confident pledge in its 2018 election manifesto “to ensure every penny of council taxpayers’ money is well spent”.
How are they doing? Not good. Not good at all. The three biggest increased spending costs in the budget are all due to incidents where the council, under Conservative leadership, has made a botch of it.
Top comes the replacement for the Managed Services provider handling the council’s routine payments and staff wages. We are having to pay more for a new contract that does less. It’s the cost for a botched process with a vague contract being awarded to the wrong contractor; we could have saved a lot had we joined the Hampshire Partnership when it was being set up.
Then there is the £1,250,000 additional cost of facilities management now Amey have been dismissed. The hideous underperformance failure of the Amey contract was what made Hammersmith and Fulham Council think again about tri-borough. That links to the fact that when this council took the decision to end tri-borough, it disrupted a wide range of services and landed us with a lot of work converting everything to bi-borough. We have not yet had a convincing explanation for why the council did not try to placate Hammersmith and Fulham Council but instead threw it out, incurring additional costs.
Given those contracting disasters, is it any wonder that the City Treasurers’ department has decided it’s prudent to keep an additional £1,516,000 in reserve, to cover “unplanned contract pressures” across the council?
And in the last month of its life, let’s not forget that City West Homes started to go seriously wrong in 2017, and for a year, Conservative councillors were telling residents that 70% of residents thought it was excellent. At the election they were talking of holding it to account. That approach didn’t survive contact with the electorate when Conservative councillors talked to City West Homes residents. The City West management fee was not being well spent.
This group has been calling attention for years to the scandalously high number of Temporary and Agency staff this council employs, wastefully costing massively more than permanent employees would do. And still the numbers go up. Of 271 current placements, a staggering 67 people have been “temporarily” employed at Westminster council for over a year. Almost all work loyally but let’s remember that Ian Woodall, our chief investment officer who invested nearly £1m into his own bank accounts, was a contractor employed through his own service company, and when he fell under suspicion the records of what he had done to the pension savings of our loyal staff could not be found. Figuratively, agency staff take money which could go to more council staff serving the city; in his case it was literally so.
The Leader of the Council thinks everyone looks at Westminster with envy. Outsiders who know the truth must look at Westminster and shake their heads.
All in all can we congratulate nine people who saved this council? The members of the Monetary Policy Committee of the Bank of England who, by raising interest rates in August, ensured we didn’t overspend last year. But for that decision we would be overspending by £3.3m.
So much for supposedly ensuring every penny is well spent. What about the oncoming serious challenges this council faces? There has never been a bleaker time for local government. For a council covering the centre of the capital city we are exceptionally exposed to the self-inflicted national humiliation if we leave the world’s biggest trading bloc, the European Union.
The prospect is already hurting us in this council. We have not had a major development scheme at the ‘Major Applications’ Planning committee for months. Private housing delivery is stalling. The budget is suffering because developer income is falling. The New Homes Bonus has been cut, and not just because the government has cut the total amount.
Who would invest in property in Westminster now? If you had some money, say £87.6m, to invest in property which would make a profit, could Conservative councillors find properties to buy? As it happens the council did put aside £87.6m in the capital strategy to buy investment property to provide income, but have not found a single investable property all year.
Affecting all local government is the oncoming crisis over social care funding. We all know council tax rises are a sticking-plaster to cover a major wound, and the report notes that it is not even certain the adult social care precept will be allowed next year. Can the cabinet member seriously claim this council has a long-term funding strategy to sustain its social care responsibilities?
Even that is peanuts compared with the ominously euphemistic ‘Fair Funding Review’ which hits us later this year, fundamentally changing government funding. The budget report helpfully tells us this council has lost 51.2% of its funding since Labour left government. Now the best estimates show that the Fair Funding Review is likely to cost us half of what’s left.
The only thing we actually control is the Council tax. But it has been an education watching the council leadership work out what a terrible local tax system Council tax really is – letting those with huge financial resources away with paying tiny amounts. Fundamental reform is needed along the lines of the Mirrlees Review.
There is a very interesting part of the budget report, hidden on page 58. Veteran councillors will remember how Labour councillors used to argue for extra Council Tax on empty homes, and each year the majority would vote against it and say it hardly affected anyone and was so easily avoided that it wouldn’t bring in anything. Then the leader did a u-turn and guess what? It turns out we were right and it brought in £48,000. How much over the years did the Conservatives waste by not doing it earlier?
We politicians sometimes talk as if public money spent under our direction knows the politics behind it. That a pound spent by a Labour council knows it must deliver for the most vulnerable, or a pound spent by a Conservative one knows it must do the most entrepreneurial thing possible. Westminster City Council is the definitive proof that’s just not true.
If we had a council willing to be help local business it would be doing far more to promote social value through procurement. If we had a council determined to build up services, instead of botched facilities management contracts it could do like Labour South Tyneside council which has its own building cleaning team that does work commercially and generates £400k income.
I did like the slogan the Conservatives used last May: “If you value it, vote for it”. I liked it better when it was the Labour slogan at the 2005 general election. But it’s interesting that their manifesto made no specific pledge on council tax level, and the rise they are proposing is in the top half of increases in London in 2019.