Since April, I have been warning that due to the impact of COVID-19 on local government finances, Crawley Borough Council will be forced to make its first cuts in six years. While the focus nationally has been on the immediate costs of tackling the pandemic, these cuts aren’t just about getting through the next year, they reflect the long-term impact of the virus on council funding.
Over the last decade, grant funding from central government has essentially ended, meaning councils can only spend what they raise locally. By 2014, Crawley’s revenue had dropped from it’s high point of £27m to just £14m, a level we maintained it at despite ongoing grant cuts throughout my time as Leader by finding new income streams.
Crawley’s funding essentially now comes from three sources: business rates, council tax and income generation. With Crawley’s economy the hardest hit in the UK, there are fewer businesses paying businesses rates, increasing numbers no longer liable for council tax due to unemployment, and no real opportunities for the council to generate new income.
The end result is we’ll be £2m worse off next year. It’s not possible for a council which had a £27m budget to maintain all the same services after a 55% cut in its revenue and over a decade’s worth of inflation. Local government is being asked to run a quarter of the UK’s public services on a shoestring. Not to depress people too much, but this is the best case scenario. Another lockdown or changes to the funding formulas and things will get even worse.
In July, both parties on the council agreed to work together to get through this crisis and we’ve already found large back office savings, but it’s not enough. As there aren’t sufficient reserves to tough this out and any council which fails to balance their budget has Government commissioners sent in to do the job, there is no alternative to frontline cuts. The options aren’t great, but they are the least harmful cuts we can find and we’d like people to let us know what they think by going to: https://crawley.gov.uk/council-information/how-council-works/consultation