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FBC Budget 2010 / 2011

FBC Budget 2010 to 2011On March 1st, at Lowther Pavilion, Fylde Council sat down to debate its budget for the civic year that starts on 1 April 2010 and runs to 31 March 2011.

The format of the meeting had changed a bit.

According to Chief Executive Philip Woodward, on the advice of Lancashire County Council, they were going to suspend their Standing Orders to allow a presentation to be made by the Leader of each 'political group' on the Council, before starting the budget meeting proper.

The Commissar was ready for this with a laptop and PowerPoint set up at one side to show what a marvellous job he has been doing over the last few years.

Cllr Mrs Oades asked what was going on exactly, and was clearly not prepared for a similar presentation. Sounded to us as though she hadn't been told in advance. If that was the case (although we can't be sure it was) it might show just how far up the colours of some officers are nailed to the Commissar's mast, and how sure they can be that, if that particular ship goes down, they will go down with it, sure as God sends little apples.

That said, Cllr Mrs Oades *was* prepared to debate the budget - and clearly, she had more of a grasp of it than any of the other councillors in the room, including, in our opinion, the 'Portfolio Holder for Finance and Efficiency' who is supposed to be in charge of it.

Queen Elizabeth is a growing force in the Council.

As the Commissar's star starts to wane, hers is in the ascendancy.

Had it not been for her proficient exposing his scandalous plan to introduce the tax con known as Special Expenses, we would all be facing stage-one of that scheme today.

Despite what she managed to achieve with that, we were still half-expecting the Commissar to introduce it as a last minute amendment to the budget at this meeting. But it didn't.

That doesn't mean it's gone away altogether of course. And it's quite possible it could resurface - at least to some extent - at the next Council meeting on 22 March. But the worst of it should have been seen off  - at least for another year, thanks to Queen Elizabeth.

But now the St Annes Pool issue was vexing councillors.

Since we published the news that the St Annes pool was going to re-open, this budget meeting was always going to have that as its central theme, so we'll deal with the pool debate first.

As we predicted, the Conservative majority had undoubtedly decided the pool was going to re-open. And we can confirm the information we gave you in our last report was right.

There is to be a capital cost of £475,000 to put it into order. This will be borrowed, and the loan will give an annualised interest cost of £48,000 for 25 years. As Saint Paul Hayhurst declared "There are people not yet born who will be paying for the incompetence of this administration with St Annes Pool"

In addition to what has already been spent this year by way of (unbudgeted) emergency work to arrest deterioration of the pool structure, in 2010/2011 there will be an £80,000 one off 'premises cost' and a subsidy cost (which includes a part year borrowing charge) of £39,000.

In future years, the full year operational subsidy and interest cost will be £98,000 a year according to the estimates in the budget papers.

The Conservatives were quick to say this was less than half the cost when they were in charge, and it was now all very good value.

We think that claim depends a bit what you count as being the real cost when the Council was last running it - for example, they had a sort of theoretical depreciation charge of over £100,000 a year that was set against the pool but contra'd off elsewhere in the accounts, so it didn't really exist as a cost, it was just a paper charge.

In our view, this and several similar expenditure items for the bloated overheads that characterised this administration, had artificially inflated the operating cost for the council, especially in it's final year.  See 'Sink or Swim.'

We think that was done so it was easier for the Commissar to justify its closure.

That said, the annual cost will now be about the same as the YMCA offered to run the pool for before it was closed (assuming the £98,000 a year is the accurate cost of the subsidy required by the present bidders). There is some doubt about this and we will have to wait to see the final figures.

This was the central issue in the pool debate.

Opposition councillors led by Queen Elizabeth claimed they had no real figures on which to base a decision. The Cabinet had not decided which of the tenders to accept, so there were no firm costs.

counterbalance had previously heard that one of the tenders only wanted £200,000 or so to do the repairs, but £475,000 was in the budget being debated. If the gossip we heard is correct, that would mean the budget item was more than twice the real cost, so it's not surprising that opposition councillors couldn't support the budget as it was put forward.

Queen Elizabeth had bigger worries as well. She said "This council is facing a turbulent future with great uncertainty that is largely outside its control. The scheme they were being asked to support meant borrowing of £475,000 to put the pool in order because it had been closed,  not mothballed,  as had been promised". She continued that this meant capital repayments of £48,000 a year - which was £1.2m over the term of the loan, and she was very concerned that the plans were unsustainable in the longer term. She didn't want the pool to open in a blaze of glory just before the local council elections next year, only to have to close after them.

She quoted the words of the Council's Finance Officer in his report which said "The level of risk in the medium term financial strategy and its financial forecast is high in terms of its significance and probability. At the levels forecast, the reserves provide only minimum comfort to the Council. With this in mind, a longer term commitment to re-open St Annes Pool will inevitably restrict the Council's options, should one or more of the significant risks identified materialise in future years. If this were to happen, remedial action would be required by the Council"

She said the Finance Officer then went on to say "I can confirm that the recommendations contained in this report provide the Council with a robust financial position over the life of the forecast on the basis of the assumptions set out in this report. However, should one or more of the high level risks materialise, the overall financial forecast may not remain robust and in making any final recommendations, both Cabinet and Council must carefully consider and monitor the risks set out in this report."

She said there were very serious warnings there, and unless she could be given an absolute assurance that the pool proposal was affordable and sustainable over the period of the lease, then she was unable to support the budget proposal.

Independent Finance spokesman Cllr Linda Nulty said "No one has seen the proposals, we have none on the table, we can't make a decision."

Cllr Kevin Eastham asked the Finance Officer to explain how much risk there was that the budget in future years would not be sufficient to allow the pool to stay open if it was re-opened now.

In reply, Cllr Roger Small said of course the budget was robust. The finance officer was sitting there and he would not allow the Council to approve a budget that was not robust. But he did not invite the officer to respond to Cllr Eastham's question.

In effect, like a credit junkie on a maxed out Visa card his report had said: you can just about afford the repayments now, but if the mortgage rate goes up, or interest rates go up, or you go on short time, or if there is a big rise in inflation, you'll be up that well known creek.

Given that his 'forecast' was for three years, we thought - as he had said himself - if one of the high level risks materialise, the overall forecast may not remain robust. For which you can read "we are skirting disaster". But the Commissar knows that if he doesn't re-open the pool, his party believes they have no chance of being re-elected.

The opposition councillors had proposed two slightly differing amendments to support the opening of the pool, but to defer the decision until they had proper financial information.

One amendment would have seen St Annes Town Council and Lytham residents being asked to pay a bit more, as residents in the rural area are currently doing to support Kirkham Baths. The other was simply to defer it until they had proper figures.

Both amendments were defeated by the Conservative block vote, with results of 27 or 28 against the amendments, and 16 or 17 for them.

The debate moved away from the pool onto the main budget proposals, and Saint Paul Hayhurst proposed an amendment to cut £40,700 from the Public Relations budget and the proposed Tourism Reserve of £30,000. He said in these difficult times, the Council should be reducing the budget not increasing the burden, especially on the large number of retired people on fixed incomes that Fylde has, and these two measures alone would save £2.40 on the Council tax.

His amendment had 15 votes for, and 27 against, with two abstentions. Our readers will understand this was the Conservative block vote at work again.

Cllr Janine Owen (who is 'Individually non-aligned' - which is a special sort of independent) said she wanted to see the pool open but was worried they were proposing to cut £30,000 out of the planning appeals budget at the same time as creating the £30,000 tourism reserve fund. She would support the budget, but wanted to add an amendment that, if there was a saving because the pool tender turned out to be lower than the amount they were putting into the budget, then that saving ought first to go toward the planning appeal budget that was being reduced. Her amendment attracted 5 votes for, and 33 against, with 6 abstentions. Shame really. She deserved better, but the tight financial pressures mean everyone's pet scheme is competing for the same space.

But for us, the biggest shock of the evening came in the debate on the main budget.

As a prelude to that, Cllr Tim Ashton said that the old pool was costing us £350,000 a year. He asserted that the opposition councillors were against spending money to open St Annes Pool, and that Independent Cllr Liz Oades was a Labour Councillor in all but name (A charge she subsequently denied). At this point he was interrupted by an irritated Mayor who told him his five minutes were almost up and he shouldn't be discussing the County Council budget in this arena. The Mayor also (sensibly) used his discretion to disregard a call from Cllr Ashton that the debate should stop and they ought to take the vote on the matter.

In response to Cllr Ashton's outburst, Cllr Elaine Silverwood said "Councillor Ashton, we are not against the St Annes baths re-opening, we'd love to see it re-open, so either you choosing not to listen, or you must be dim - I can't make my mind up which it is"

There was a swell of "hear, here" from her side of the room, and we wondered where she might have got the idea he was dim from.

Cllr Buckley, on the other hand, is a very rapidly rising star in the Commissar's Cabinet. She has risen so fast, and now positions herself so close to Deputy Leader Roger Small, that we're inclined to believe she's heading to be an heir apparent in the Conservative ranks. Given the exceptional progress this  lady has made, counterbalance is going to re- christen her 'Princess Karen.'   It's a name that does seem to suit her style.

Anyway, she read out a prepared speech, the essence of which suggested that the Business Community and Town and Parish Councils and the 'People's Panel' (Dear God that  really *is* what they call it gentle reader) all supported Fylde giving value for money and proceeding cautiously with the budget. So everything was alright then.

In response, a clearly livid Cllr Elaine Silverwood tore a strip off Princess Karen Buckley saying "First of all, you didn't attend the Non-domestic ratepayers meeting in November. You weren't there. There weren't any minutes taken. The Councillors that were there - and I was, wearing my Chair of the Business Group hat at the time - were Cllrs Small, Pounder, Eaves, and Fazackerley, so I'm afraid you've been given the wrong information because I'll tell you exactly what was discussed that night"

She then rhymed off the list of topics the meeting had discussed, none of which seemed to tie in with what Princess Karen had said. Cllr Silverwood concluded: "I suggest in future Cllr Buckley that if you're going to quote the business community, either attend the meetings and hear first hand, or get correct minutes, or do the favourite thing and actually consult with the people who were there and know what they are talking about"

There were a couple of other quotes we thought our readers might like. There was frequent reference to a Czar (or Tsar, we're not sure from the phonetics used). This is a newish post, supposedly to support economic development generally, and town centres in particular. It had been in the list of topics Cllr Silverwood referred to.

Cllr Ashton said in response to her comment "... The Czar - this is something this administration is keen on"

We were not surprised.

But we *were* surprised when, with (what at least we thought was) good humour, or at least irony, Cllr Coombes said "Well. we've already got a Commissar, so we might as well have Czar as well"

Saint Barbara Pagett spoke to recall the days when the Council had committees and each committee would spend a day going through the detailed proposals so they understood, and were sure about, what they were voting on when the time came to approve the budget.

She contrasted this with the present policy of not providing anything except the most general of information and being expected to vote for things that councillors were not aware of.

Cllr Linda Nulty spoke well, saying "As I started to look at the budget proposals, and wade through the treacle of this draft budget book, one statistic was at the forefront of my mind. It won't be found in these papers but it is a judgement on this Council from the 'One Place' survey, and it is a score of only one out of four on 'Managing Resources' [this was the exclusive story we broke in 'They Don't Come Any Worse in Lancashire'].

'Inadequate. An organisation that does not meet minimum requirements. Performs poorly'.

On the whole organisational assessment, which includes Use of Resources, Governing the Business, and Managing Finances, we score only nine out of twenty - 'Meets only minimum requirements'"

She said she was looking for value for money. She said savings targets from last year had not been achieved.

She asked what has been saved over the past 18 months since the pool closed that isn't having to be spent now to allow the baths to re-open.

She referred to the warnings in the Finance Officer's report and said "Will this budget help us with our 'Management of Resources' score? Will it move us from 'Inadequate'? I think not." She went on to pick out several other expenditure items in the budget that she said did not offer value for money.

When Queen Elizabeth spoke on the main budget item, she was a star performer. She began by asking how many councillors has seen (let alone read and understood) the budget book. This contains the detailed level of expenditure breakdown.

We saw one hand out of 51 go up.

Cllr Small said the budget book was provided just to party leaders, but it was on the internet and anyone could see it if they wanted to (We've seen it there, but it's usually only there for a short time and not easy to find, and worse, no one tells you when it's been published, so you need to be a real anorak to find it).

It was clear that few, if any, councillors had seen it.

Then she turned to the Finance Officer's report in the agenda paper and asked how many councillors had read and understood it. Again there was little response. She said she had spent considerable time going through it (as she obviously had) and had asked a lot of searching questions.

She wanted to know if the Conservative councillors even understood the fact that in voting for the proposed budget tonight, they were authorising the Finance Officer to incur debts of up to £11 million on their behalf.

She said "I asked the Finance Officer a question which he hasn't answered, and I go back to what he wrote in the Medium Term Financial Strategy where he has said it is robust *but* if one of more of the high level risks materialise, the overall financial forecast, it may not remain robust.

The risks are fairly probable in some cases and therefore I do have worries, and I certainly can't sign up for the residents of this Borough being asked to borrow a possible £11 million with the revenue implications of the borrowing so I'm afraid I can't support the budget"

What she was referring to was Table 3 in the arcanely named "Prudential Indicators" section of the Finance Officer's report which showed that the need for capital finance is £5.7m next year and £5.6m for each of the subsequent years. Added to this is the councils "Short term borrowing" for cashflow purposes of up to £1.5m a year and then the gloriously named "Contingency" of £4.5m or £4.6m. Together these add up to £11m next year, and are expected to carry on at this level for the subsequent two years at least.

They expect to fund this £11m partly from selling assets (Stand by for the existing town hall site to go up for sale) and from grant income, and from cash borrowing. But if the income from other sources doesn't live up to expectations, then the borrowing would be greater, and the Council was being asked to approve that situation.

£11m is a potentially huge sum. It represents £157 for every man woman and child in Fylde. At 5% the interest charge alone would be half a million pounds a year.

So what do they want all that capital money for?

Well, some is for routine capital schemes and replacements, like the grants to help the disabled adapt their houses so they can continue living in them, and for the cremator works, and so on, but the greatest part is the plan to raise £5m for the White Elephant New Town Hall scheme.

So we're not surprised that Queen Elizabeth couldn't support a budget that planned to open the pool without knowing how much it would cost them.

It was the same budget that sought authority to incur external debt of up to £11 million, and, oh yes, she forgot to mention that the Finance Officer seems to have applied off his own bat to capitalise another £900,000 of housekeeping spending. This time it's to pay some statutory redundancy and pension costs - probably of the latest batch of staff that have been made redundant. Or in some cases probably have left with benefits by 'mutual agreement'. We understand the IT chap who blew the whistle on inappropriate images on a councillor's laptop computer might be one of the latter.

At present we understand they have only taken up just over £600,000 of the permission.

We suspect that means most of the £400,000 capital receipt they got for selling the Heeley Road site will have been used to offset these redundancy and pension costs (because they are classed as a priority by Government edict) so Fylde will probably end up with another £200,000 or so on its already bulging credit card, and having to borrow the £475,000 to open the pool. That means we'll all be paying for the next 25 years.

The scandal of this latest capitalisation is that it appears to have been done without a report to either Cabinet or Council (except the present Finance Officer's report which simply tells them it is a fait accompli).

We believe this demonstrates that officers have been allowed to run out of control with delegated permissions. A situation that will have to be clawed back by politicians that are better able to understand the Council's finances than the present bunch of incompetents.

Starting the wind up of the debate, our esteemed Commissar made reference to much of what had been said. He said that the Car parking charge at North Beach Car Park "would in a roundabout way, support the proposed windsports centre there and the budget we're putting forward tonight"

He also said that anyone who voted against the budget was voting against the Conservative proposal to open the pool.

He concluded by saying (and we thought this part was very telling) "So there we are Mr Mayor I think we've had a full and frank debate. I think this budget is clear. Very clear. It has the support of the Section 151 Officer [That's the Finance Officer] but there are some tough decision that may come in the future. We still think these are affordable, but we don't know what any future Conservative or Labour or Liberal Democrat Government will do. But at this current moment in time this is a robust budget. This is a budget for the future of Fylde Borough Council, for the residents of Fylde, and it needs to be supported tonight Mr Mayor."

So there we are, the budget went to the vote. We suspect hardly anyone in the room properly understood what they were voting for, but this was the result of the vote as we recorded it.

For the budget as proposed on the agenda paper
Cllrs: Aitken, Ackeroyd, Ashton, Bennett, Buckley, Clarkson, Coombes, Cornah, L. Davies, Douglas, Eaves, Fazackerley, Fiddler, Fieldhouse, Fulford Brown, Halewood, Hyde, Jacques, Little, Pounder, D S Prestwich, P Rigby, Singleton, Small, Threlfall, Wilson (26)

Against the budget:
Cllrs: Chedd, Chew, Collins, J R Davies, Eastham, Hayhurst, Nulty, Oades, Owen, L Rigby, Silverwood. (11)

Abstain:
Cllrs: Beckett, Ford, Hardy, Harper, Pagett (5)

Not present or left before the vote:
Cllrs: Ackers, Caldwell, Greening, Henshaw, Hopwood, Mulholland, W J Prestwich, Renwick, Speak (9)

Dated:   5 March  2010


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