A key policy of the Welsh Conservatives’ manifesto for the Senedd election is a Council Tax freeze for at least two years. A chance to give hardworking taxpayers help against excessive Council Tax rises, writes Councillor Adrian Robson.
People will have more money in their pocket to spend in our towns and cities once the economy can fully reopen which, as a Cardiff Councillor, I know is vital to our capital city. The proposed tax freeze follows other Conservative announcements which will help residents during these difficult times.
At the start of March, the Chancellor Rishi Sunak set out his budget proposals. It was a budget clearly aimed at helping all UK residents, especially after the financial troubles many experienced due to Coronavirus. Amongst other measures, he increased the minimum wage, widened coronavirus help to an additional 600,000 self-employed and extended furlough until September.
The following day Cardiff Council set its budget. The approach of who to help could not be more different. Cardiff Labour voted through an inflation-busting tax-rise for Cardiff residents of 3.5% or approx. £5.35million in money terms. A budget for the few.
As a low-tax Conservative, I have always favoured low Council Tax rises and Cardiff Conservatives proposed an alternative budget with a tax increase of just 0.8%, a touch under inflation. This is in line with our group’s view that any Council Tax rise should usually be around the inflation mark. It also is in line with our view that every Council taxpayer should receive value for money, regardless of how many or how few Council services they use. But it is at complete odds with Cardiff Labour’s budgeting, which follows the strategy of an assumed tax rise, usually at 4% regardless of whatever inflation is doing. As I said during the budget debate Cardiff Conservatives put the people foremost in our people’s budget, Labour look to see how much they can tax them.
The reasons for backing every Cardiff taxpayer becomes clearer when the Council finances are considered. The Council has money available in several pots including:
- Over £48million in the earmarked reserve (including a £3.6million strategic budget reserve and £390K in the Resources budget)
- Over £14.2million in the general reserve
- £3.8million in the Financial Resilience Mechanism
- £3million in Budget Contingency Fund.
These are serious sums of money. The reserves are there for a rainy day (and if impact of the Coronavirus on people’s pockets is not a rainy day, then I do not know what is). The strategic budget reserve could have been removed in full in this budget and the Financial Resilience Mechanism is only there in case there is underfunding in the Welsh Government Grant. Yet this year the settlement was actually better than the Council anticipated and the additional expenditure/lost income caused by Covid has predominantly been reimbursed to the local authority by various Governments.
But the greatest scandal is the Budget Contingency Fund. Eight years ago this fund was introduced under the pretence of assisting with efficiency savings/income generation which Cardiff Labour were unsure they could make. Then set at £4million, I see it for what it is – sloppy budgeting! It is a get out clause for departments if their proposed efficiencies or income generation ideas are not properly implemented. It is of great concern that the Council’s administration still proposes budget savings or income generation which they lack confidence in, especially as the budget contingency is now up to £27million of wasted money since its inception – imagine how much that could have offset the Council Tax rises after all these years.
As well as highlighting unnecessary budget lines, Cardiff Conservatives again put forward ideas to help generate income. Post-covid, the Council’s estate is not going to be fully utilised as many will choose to work from home for part (if not all) the week leading to space available in the Council’s buildings. The Council already has workshops and a business technology centre to assist start-up businesses, so there is no reason why this new spare office space cannot be utilised for new companies. It could help Cardiff’s economy whilst also generating an income for the authority and, if successful, I am sure would be embraced by other Councils.
There is much else that could be said about Cardiff’s budget, far more than would fit in this article, but sometimes it is the smaller proposals which have the greatest impact. This budget included a part-time post being deleted from the economic development team as well as a post going in the tourism team. These proposals only amounted to £50K, a small amount in the scope of Cardiff’s finances, but were accepted by the administration. Cardiff Conservatives felt this was a peculiar proposal to make when reviving the capital’s economy is going to be so critical over the next few months. We proposed reversing this saving, but it was surprising to see it in the budget and sends out a signal that restarting the local economy is not high on the list of Cardiff Labour’s priorities.
But the strongest way to help rebuild Cardiff’s economy is to ensure that residents have more pounds in their pocket. It is a shame that Labour have chosen to raise Council Tax so much when the finances are available.
Adrian Robson is the Leader of the Opposition on Cardiff Council and a Conservative Councillor for Rhiwbina..