Plymouth City Council must chop £17.8million from its spending next year – or go bankrupt.
Council tax rises, job losses and scaled-back services are all on the horizon as the city grapples with its biggest funding cuts for a generation.
The full impact of Government cutbacks has been laid bare as city finance chief Councillor Mark Lowry prepares to announce his draft budget for 2013/14.
Amounting to £62 of savings per resident, plans include everything from selling off assets to hiking cremation fees – and even pulling out of the South West in Bloom flower-growing competition.
Cllr Lowry, the council’s Cabinet member for finance, told The Herald: “If we don’t make these cuts the city would go bankrupt.
“It’s not going to be easy delivering them, and nor are people going to necessarily enjoy it, but I’m not a magician I’m afraid and I don’t have £18million.”
He added: “We need to make sure that whilst we’re making these cuts the impact is minimised on those most vulnerable.”
The council has already been forced to make savings of £20million over the last two years, as central Government funding dried up in the economic crisis.
The indicative budget, which will be debated by Cabinet members next Tuesday, sets a revenue budget totalling £198.3million for 2013/14.
The proposals will not be approved until February, after the Government has revealed how much cash it will be handing to town halls next year.
Chancellor George Osborne is widely believed to be planning a reduction in settlements for local authorities. That would likely be offset by the first council tax rises in years.
In his report to councillors David Northey, the council’s head of finance, said Government cuts would have a “drastic impact” on services.
“We are experiencing the largest public sector reductions in a generation, with the Government set to announce yet further reductions to local authority funding,” he said.
“We cannot escape the fact that the Government’s deep spending cuts will have a drastic impact on our council and the services we provide.”
Mr Northey said on top of funding cuts passed down from Westminster, council income had also dropped.
The authority is finding it more difficult to collect council tax it is due and has seen a fall in revenues from areas such as commercial rents and car parking, he said.
As The Herald has previously reported, 100 council workers face redundancy as it bids to shave its workforce.
Another 100 roles are to vanish through natural turnover – and 200 further employees could be transferred to other organisations as part of an efficiency and skills-sharing drive.
The council currently employs around 3,400 people, who are in their third year of a pay freeze.
However, those who escape the chop can expect a 1.5 per cent wage rise next year, when a nationally-agreed pay award is set up.
Many of the council’s savings will come through raising fees of services such as allotment and beach hut rental, or cremations and burials.
New parking meters could also spring up in areas where there is currently a mixture of free and paid-for spaces.
Some services will be scaled back, such as grass-cutting, garden waste collections and potentially the Chelson Meadow Recycling Centre.
The council is also trying to save cash by helping vulnerable adults, including the elderly, get support in their own homes instead of going into care.
The city faces huge rises in the number of elderly residents over the next 20 years and, at £71.5million, the allocation in the draft budget for adult social care is by far the largest chunk of the council’s overall revenue budget.
It is hoped a further £2.1million can be saved by simply procuring goods and services more efficiently.
The removal of council tax rebates for second home owners and charging the landlords of empty homes could also bring in some much-needed cash.
Cllr Lowry said city people should be under no illusions about the scale of the looming cutbacks.
“A lot of councils across the country are potentially going to go bankrupt,” he said.
“It needs the council to think imaginatively and people to start using services – or the same could happen to Plymouth.
“These cuts are £62 per person in Plymouth, that’s the scale of them.”
Council leader Tudor Evans was on holiday yesterday and unavailable for comment.
But Cllr Lowry said the Labour group had inherited an unhealthy balance sheet when it swept to power in the May elections.
“The Conservative administration have left me a legacy of £6million additional cuts they didn’t deal with,” Cllr Lowry said.
“We are experiencing the biggest cuts to the city’s finances in a generation and sadly I don’t think we have seen the worst of it yet.”
DELAYS IN SELLING CIVIC CENTRE COST £750,000
DELAYS in selling off the Civic Centre look set to gobble up £750,000 of the council’s budget next year.
The landmark Grade II-listed building was put up for sale in October 2010 – but a bidding war is still in full swing.
The £750,000 has been set aside to help the council keep up with spiralling maintenance costs, finance chief Councillor Mark Lowry said.
A report Cabinet members will see next week warns there is a “significant backlog in maintenance obligations” across the authority.
The draft 2013/14 budget lists “uncertainties” over the future of the 1962 tower as one of the council’s key risks for the year.
The £750,000 has been allocated to the council’s accommodation strategy from a £1.77million chunk of cash set aside to offset several ‘one-off pressures’ forecast for 2013/14.
More than 20 organisations eyeing the building attended a bidders’ day in the summer and several are due to meet with council chiefs again this week.
The authority wants to sell the freehold with the vision of the upper floors being turned into a high-end hotel.
Most of its 1,000-strong Civic Centre-based workforce would move out, though the council would seek to lease back 4,100 square metres of the building.
It hopes to agree a contract with a developer in June.
“We have a number of pretty attractive solutions we’re currently working through,” Cllr Lowry added.
CHANCELLOR PLANNING MORE CUTS
THE Government was braced for protests today over a fresh wave of spending cuts.
George Osborne was expected to announce a series of new austerity measures in his Autumn Statement today.
The Chancellor was also poised to unveil a £5billion investment in building new schools, funded by Whitehall spending cuts.
Departments must slash their spending by one per cent – or £950million – next year and two per cent – or £2.5billion – in 2014/15.
Plymouth City Council and other local authorities will be exempt from the first round of cuts – but must find a way of making the two per cent savings in 2014/15.
Unions were last night warning of a “triple-dip recession” and the loss of another 13,500 civil service jobs.
The council expects to find out by December 21 how much central Government funding it will get for next year – and fears further reductions.
FINANCE CHIEF SETS OUT POSSIBILITIES
HARD-UP households face a rise in council tax next year as Plymouth bids to plug a multi-million-pound funding gap.
Finance chiefs are planning a two per cent rise in the tax, which had been frozen for the last three years.
A raft of austerity measures proposed in the council’s draft 2013/14 budget also include hiking fees of some services – and ditching others.
The proposals hinge on the Government’s final settlement for the authority, due to be announced in the run-up to Christmas.
But it is widely believed the city’s handout for 2013/14 will shrink for the fourth year running.
The city’s Cabinet member for finance, Councillor Mark Lowry, said the two per cent rise was “modest” considering the city had by far the lowest council tax rates in Devon.
Residents living in a Band A property would pay an extra 38p per week under provisional plans.
“The Conservatives budgeted for a two and a half per cent rise,” Cllr Lowry said.
“I’ve reduced it to two per cent and, if [Chancellor] George Osborne doesn’t cut in his budget later this month, it will be frozen.
“Hopefully we won’t get a further reduction in budget allocation.”
Residents with allotments or beach huts will also be hit in the pocket under the savings plans. Fees for allotments are set to go up by between 15 and 25 per cent.
“But we’ll also be creating more allotments,” Cllr Lowry said.
“We’re looking at all our fees across the council to make sure they are fair and reasonable.
“We’ve got some of the cheapest allotments in the whole of the UK so we are going to be increasing fees.”
Keen bowlers and croquet players are unlikely to welcome increases in fees of up to 50 per cent, however.
Plymouth has six bowling greens, run by around a dozen teams, and all cost cash to prop up.
“We’re got the cheapest bowling greens in the world, it would appear,” said Cllr Lowry.
“Very few people actually play, they’re not open to everybody and they’re heavily subsidised by council tax payers.
“Hopefully by everybody paying a little bit more we can begin to balance the books.”
Hire prices for other council-owned sports pitches will not increase, he added.
But grassy areas across the city will only get a trim nine times a year, rather than 13.
And the city appears unlikely to repeat its successes in the South West in Bloom contest.
Plymouth will not be entering the Royal Horticultural Society-backed annual flower show this year.
“At a time when we’re all having to pay a lot more and struggling it doesn’t seem to be that sensible to spend £17,000 on it,” Cllr Lowry said.
There will also be a “modest” rise in fees for burials and cremations, the city’s finance chief said.
All libraries will be kept open despite the cutbacks, though savings will be made on staff and stock.
Cllr Lowry said he wanted to “make them pay for themselves” by adding more cafes and other services inside.
A full-scale review of car parking and car parks will also take place.
“Average capacity is about half so there is the potential for us to look at selling land and developing it,” Cllr Lowry said.
Meanwhile, council workers face departmental reviews and changes to their terms and conditions in Labour’s first budget since returning to power in May.
“We were all aware of the fact things were difficult,” Cllr Lowry added. “But we didn’t realise the scale of the mess that had been left behind.”
BUDGET SQUEEZE: THE PROPOSALS
JOBS: 100 council workers are to be made redundant and 200 others, mainly in adult social care, could be transferred to other organisations or social enterprises
DEPARTMENTS: Every single council department faces a fundamental service review
PARKING: Under-used car parks could be sold to developers and charging introduced in some streets
GRASS: All verges and green spaces to be cut nine times a year – down from the current 13
ALLOTMENTS: Fees set to rise by between 15 and 25 per cent, with beach huts to follow suit
FUNERALS: Burial and cremation fees face “modest” hikes, and the deputy coroner role will be reviewed
RECYCLING: Operating hours at Chelson Meadow could be slashed, while one garden waste collection crew and their vehicle are to be dumped
LIBRARIES: More staff cuts and efficiency savings in a bid to reduce the £500,000 spent each year on books and DVDs
BOWLING GREENS: All six face a 50 per cent rise in fees
CLEANING: Authority will ‘redefine’ the scope and level of caretaking and cleaning, as well as all its insurance policies
DEBTS: Cash owed to the council could be sold to a factoring company
AWARDS: Plymouth to pull out of South West in Bloom contest