Labour accused of introducing ‘home-grown austerity’ by Lib Dems in Cambridge City Council budget
Cambridge City Council’s Labour group have been accused by the Liberal Democrat opposition of introducing “home-grown austerity” as it tackles a budget gap from the coronavirus crisis.
The Lib Dems urged the ruling party to dip further into the council’s financial reserves - and said they are at three times the required level.
But Labour has warned that the Conservative government is not fulfilling its funding commitments to councils.
The city council has estimated that the pandemic has left a £9.8million hole in its budget for the year.
Council documents show a number of causes for the deficit, including spending more than £1million on providing temporary accommodation for the homeless, and reduced income of £8.5million, including a forecast drop of £2.6million in parking revenues this year.
The council said it proposes to reduce and defer planned projects totalling £3.7million, and make £2million in other savings to mitigate the impact.
Even after an extra £2million in emergency funds from the government, an estimated gap of £1.8million is left to be covered using the council’s reserves, said the executive councillor for finance, Cllr Richard Robertson.
The Liberal Democrats proposed an amendment to see an extra £370,000 used from the reserves, which they said would go towards paying for projects to help the environment and tackle climate change, rather than see them deferred or reduced.
The leader of the Lib Dem group, Cllr Tim Bick, said the Labour administration had voted to declare a climate emergency and has declared that preventing environmental breakdown is a priority.
“The whole notion of an emergency is that you have limited time to act,” he argued. “The whole notion of a priority, when you are deciding what to maintain and what to postpone or cancel in a time of resource adversity, is that you determine to protect and deliver your priorities.”
But the Labour leader of the council, Cllr Lewis Herbert, said the government is not fulfilling commitments made to councils that it would pay the cost of keeping people off the streets during the pandemic, and meeting other emergency budgetary requirements.
He compared the recent impacts on the council to a “systemic attack” and stressed: “We do need government support.”
He said: “It’s been a grave disappointment that some of [the government’s] promises are not being kept.”
It was “appalling”, he suggested, that the government’s latest announcement of £208,000 support for the council would not cover more than a month’s worth of additional costs for assisting with homelessness during the crisis.
“We are just not being taken seriously,” he said.
The financial impact on the council beyond this year was still unknown, and the ramifications could last for years, he warned.
“It isn’t true that we have somehow slashed our commitment to tackling climate change - that is a fabrication. We are continuing on with our work on the climate change strategy. There are some unavoidable projects that you may have noticed are not able to be delivered because it is not possible for a lot of projects to be done.
“Building work has been slowed down and a number of these other projects have slowed.”
Despite the disruption, the council has brought forward a proposal to decarbonise its vehicle fleet, which Cllr Herbert described as a “major change,” even if new vehicles are not bought in this financial year.
Cllr Robertson pointed out that the reserves may be needed in future years, and that even before the crisis, the council was facing the need to make savings.
Labour intends to invest some of the council’s reserve funds to generate revenue for services in the future.
“If we have to use too much of the reserves now, there will be less to invest for income in future years,” he said.
Independent councillor John Hipkin said the Labour administration had come up with “an ingenious solution to the inevitable deficits which have been caused by the coronavirus outbreak”.
But he suggested Cllr Herbert was “whistling in the wind” in calling for more support from the government, adding: “The government itself is entering into the straights of austerity because they have spent so much money.”
He accused Cllr Bick of being “really quite out of order in talking about this unnecessary austerity”, adding: “The austerity, such as it is will be in the coming years, is absolutely the product of the emergency actions that have been taken by the government so far.”
But the Lib Dems also criticised underspending on the council’s housing stock.
Cllr Anthony Martinelli said in a statement ahead of the meeting that “financial mismanagement” had led to the council underspending by £6million last year and “millions more this year” on planned improvements to council housing.
He said it was “extremely worrying” to see underspends on planned repairs and fire safety work.
“This is a huge and growing problem. This is revenue that should be invested in the city’s housing rather than left idle,” he claimed.
Labour’s executive councillor for housing, Richard Johnson, said the council’s underspend on its housing capital budget was 16 per cent of the allocated £46million last year.
He said: “While of course we would prefer to spend every penny and complete every project on time each year, it is usually not possible to do so – sometimes for reasons beyond our control.
“For example, an important project to install new fire doors across our housing stock was delayed because the government similarly delayed confirming new safety standards, and several key projects were delayed as a result of the coronavirus.
“The majority of outstanding works due to be completed last year will likely be completed this year.
“We will take no lectures from the Lib Dems on financial management.
“In the final year they were last in charge of the city council an eye-watering 41 per cent of the housing capital budget was underspent.”
Cllr Martinelli told the meeting: “I’m not particularly interested in prosecuting budgets from a decade ago.
“We have council tenants told that they will have to charge their mobility scooter with an extension cable through an open window over the winter whilst money sits unspent.”
He said he recognised the issue relating to fire doors, but argued: “There is no reason why heat alarms or heat detectors should take two further years to replace whilst this money remains unspent.
“If the council is not willing or able to spend this money, it should be honest about that in the budget-setting process.”
Cllr Johnson told the meeting: “Our commitment to tenants remains as strong as it was when we took control of the council six years ago”.
That commitment was borne out by the budget, he argued, noting that the council would be investing £60million in improving and maintaining its housing stock this year, as well as building new council homes he said the Liberal Democrats had opposed.
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