How does a council survive when the Government takes away its entire grant and then prepares to take over £1.3m more?
They could make cuts. That’s what the Conservatives did when they ran Crawley, what they’re doing at West Sussex, and at Conservative-controlled councils across the UK. Alternatively, they could find the money elsewhere.
Only 11% of your council tax goes to Crawley Borough Council, that’s under half the council’s budget and, because household incomes haven’t improved in a decade, as Leader I’ve limited council tax increases to at or below inflation. So we’re not finding the money there.
Next there’s business rates, yet from £120m collected in Crawley we keep just £6m. So while we’re working hard to grow Crawley’s economy, we only benefit financially from 5% of what we deliver.
We also get a bonus for building new houses, a share of the sale value of Crawley’s recycling–although West Sussex is ending this, and fees and charges from things like licenses, planning applications and venue hire. However, that’s small change compared to the budget gap.
What about reserves? Because the Government bans councils from using capital reserves to pay for services, we’re using them to buy properties and redevelop the Town Hall so rents from the new commercial space we’re delivering can pay for the services instead, in addition to a new Town Hall being far cheaper to run.
We’re also using existing assets to generate new income. Some of that is through creating new leisure attractions, but it also comes from the rents on properties like shopping parades.
When a business’s lease is up for renewal rents are proposed based upon what the market is bidding for vacant units, businesses can successfully appeal this by showing how the rent does not reflect the value of the property. This is the standard market approach and it has worked this way for over a decade. What the council cannot do is subsidise profit-making businesses by keeping rents lower than their market value, it isn’t in the public interest to do so when it means cutting services or increasing council tax.