Up and down the country town halls will be preparing their election year budgets. Many Tory councils facing yearly or all-out elections (like in London) will be pledging populist two- or even four-year council tax freezes to their electorates.
How any pledges of this sort can be made without even more savage cuts to local services than the ones being developed now in council finance departments should be a matter of real concern. At the moment we know that many local services will have to take the pain of the banks’ bailout by making some challenging efficiencies.
So a Tory policy of long-term freezes would mean deeper cuts to swimming pools, libraries, safeguarding vulnerable children, youth and community safety projects.
But local Tories are able to say this because of a little trick they played on the electorate two years ago.
At the Conservative party conference in 2008, shadow chancellor George Osborne revealed that a Tory government would give ‘financial aid’ to any council that could limit its council tax rise to 2.5 per cent for two years and help turn it into a tax freeze. Osborne said the £1.5 billion cost of the policy would be met by cutting spending on “advertising and consultancy”, a traditional populist target.
Sadly for the Tories, and local people, the figures just don’t stack up.
At yesterday’s New Local Government Network Conference John Denham blew the policy out of the water when he accused the Conservatives of having a black hole of almost half a billion pounds. Official costings worked up by the Treasury showed the overall cost of Osborne’s pledge would in fact be £1.97 billion, £470 million more than the Tories have claimed.
Moreover, there are serious question marks over the Tory figure regarding when the policy will kick in.
While £500 million and £1 billion could on paper be saved in 2010 and 2011 from reducing advertising, savings of just £350 million per annum will be possible in the years after. That means if the council tax freeze starts in 2011-12 instead of 2010-11, the shortfall will be even larger.
Where’s this extra money going to come from? With Tory finance chiefs promising immediate cuts to local services, in all likelihood the costs will be found locally by either cutting more services or hiking up lucrative fees and charges like after-school clubs, meals-on-wheels or parking.
So if your Conservative councillors are pledging long-term freezes this year at your town hall you need to ask them how it’s all going to stack up without our stretched services being hit even harder.