Budge over big spender

I spent many years teaching A-level Accounting and what fun it was. No really. I am not sure the students enjoyed it, but I had a whale of a time. That was until the final subject on the syllabus came round each year; the dreaded Budgeting. Even I hated that bit.

Fact is though, budgeting is one of the most vital financial disciplines in life, whether corporate or personal, and don’t forget even Mr. Micawber had a sage word of advice on the subject. Interesting then that your County Council is agonising on such matters as we speak.

On 22nd January our finance committee stalwarts scrutinised detailed proposals put before them by the cabinet and our financial professionals. As one who sits on that committee, I am still having dreams (no, I didn’t say nightmares) about the 250-odd pages of intricacy, which we studied and debated throughout a thrilling afternoon.

So let’s remind ourselves of some fundamentals: Budgeting is all about looking at the coming time period and calculating four broad points:

A) How much money will we start with?

B) How much will come in?

C) What will we spend?

D) What will we end up with?

Mr. Micawber’s wisdom related to the dire consequence for D), if C) exceeds B). Something about Misery, wasn’t it? There is also another element, of course, and that is how much one borrows, which, as many folks know only too well, can magnify misery in the longer term.

So is doom upon us?

Well, residents will sleep much easier when they know that at County Hall careful calculations are in hand to avoid misery in the strict financial sense. Through no specific fault of local authorities, however, Westminster has been slashing the amount of money being passed down to fund local services. The reason for this, is that the UK is in dire fiscal straits, despite the spin to persuade us otherwise. All the austerity during the life of this Government and still our financial position is, to put it kindly, ragged.

This coming financial year, West Sussex is likely to be trimming back its expenditure by yet another £39m – similar to the net amount we donate to the EU every 17 hours, by the way, but let’s not squabble over taxpayers’ petty cash. In four years’ time, we’ll be well over £120m light annually compared to the present level. So telling West Sussex folks not to worry about Dickens’ misery, is rather like a dentist telling the patient that the wisdom teeth have to come out and there is no anaesthetic today. Try and spin that one.

Of the local services provided to the public, well over three-quarters come via the County Council, including social services, highways, refuse disposal and libraries to name just a few. One of our biggest challenges, of course, will be caring for an ever-growing elderly population.

Government Grants – Extinction Coming?

As Westminster funding gradually dries up, surely there must be somewhere else the County can derive income? Well, yes of course. The old saying goes something like: “You can have whatever you want, as long as you are willing to pay for it” - and in research carried out in West Sussex last year, a sizeable minority of respondents said they would actually be willing to pay more in council tax to protect front line services. Not surprisingly perhaps, the majority do not want to pay more and even if the County Council were to raise council tax, there would be a loss of a £3.9m annual Government grant for not freezing our council tax level. Tricky one.

Clearly, local budgets in free-fall impose the need for more efficient ways of operating and much progress has been made in recent years. There comes a time, however, when the machine is indeed lean and further cuts must lead to painful reductions in front line services. I feel that time is now upon us and it will – for each of us – highlight our own underlying political attitudes. How much can we or should we expect from the state? What level of taxation do we accept? How willing are we, as individuals and communities, to fall back on our own resources?

These are the philosophical ingredients, which will boil over in the next three months on the run-up to 7th May and the cooks will doubtless turn up the gas burner to maximum. Hope the smoke detectors are working.

Meanwhile, watch out for the full meeting of the County Council next Friday the 13th(!), when the forthcoming West Sussex budget is formally debated and agreed. I wonder what sort of budget amendments the minority parties will come up with!