At peak, Crawley Borough Council had annual net revenue expenditure of £27m per year. By the time Labour regained control of the council in 2014, that had been cut to £14m. For the last six years, despite ongoing cuts from central government, we have managed to keep it at £14m by finding other sources of income, enabling Crawley to be the only council to have avoided frontline cuts over this period.
We were always going to hit a point where we couldn’t keep replacing the money which was lost, but COVID-19 has rapidly sped up this process. The reason for this is that it hits all the council’s sources of income at once. The share of business rates retained by the council is slashed as companies close their doors, the growth in unemployment means fewer households pay council tax, and all the council facilities people pay to use shut down. Even if the pandemic ended tomorrow, the impact on business rates and council tax will take years to recover.
There is simply no way of making up the difference. For districts, council tax increases are capped at 2%, we don’t set business rates, and there’s nowhere we can invest which will generate a decent return at low risk until the economy recovers. Councils are legally required to set a balanced budget, so unable to close the budget gap through revenue generation, means we have to make cuts.
I’ve made this clear since the first lockdown. While two-thirds of the gap has been closed through back office savings, it’s impossible for a council budget to go from £27m to £12m without some frontline services being impacted. Last week we announced our savings proposals. They reflect the options supported by residents at public consultation and were subject to cross-party agreement on the council, but ultimately we all wish there was an alternative that would leave services intact.
In due course, the construction of new commercial space, a combined heat and power plant and more efficient Town Hall on the current Town Hall site should help reduce the need for further cuts in future years.