As part of the Government’s Austerity drive, the Isle of Wight Unitary Authority has had and projects to have, reductions in Government funding. Now there is a forecast for a budget deficit of £20m over the 3 year period 2017/18 to 2019/20.
The Government has prepared a neo-liberal agenda for the devolution of local authorities, which is in reality centralisation. Apart from this where there is no absolute possibility, or in tandem with the existing local authority, a strategy has been prepared for business and capital centred authority to replace existing Councils like the Isle of Wight Council. It is intended to posit the opposite to human centred governance. The distinction is between elected pro-community Councillors and business monopoly oriented arbitrary authority.
The devolution proposals, post Brexit, have taken in the EU inspired enterprise partnerships that replaced the regional development agencies, unelected business run organisations like the Solent Enterprise Partnership. These have taken more or less control of all funding and investment arrangements for the entire region. The intention is also to create localised investment zones, supposedly for regeneration, but intentionally to derive added value from the locality in favour of the monopolies that control such bodies as the enterprise partnerships and newly created regeneration committees. Government and neo-liberal austerity has forced the situation to reduce the remits of unitary authorities away from providers of services and community schemes to purely business interests. Over a period of time the government and local quislings have engineered a coup in the Council resulting in a recent coup in order to implement the central policy of corporate control of the local authority in order to transform its role. Austerity measures have taken the local authority to near bankruptcy and local ruin. They have introduced finance and sustainability as the excuses for its actions.
The Isle of Wight Council has developed a Medium Term Financial Strategy (MTFS) to describe the pathway to meeting that financial challenge. Detracting from government cuts and abdication of responsibility for people’s services. They have slashed, undermined and outsourced services to Private Finance Initiatives (PFI) like roads and pathways. They have issued contracts for waste disposal and given away whole bus routes and wound up council run services. These are now well and truly in the hands of monopolies like the “Go Ahead Group” that runs “Southern Vectis” buses, “Amey Waste” and “Eurovia” (PFI).
The MTFS described the financial challenge as the single biggest risk to sustainable public services on the Island. They say that the Council needs to resolutely maximise the deployment of the resources that it does have (Revenue, Capital, Property and Staff) towards driving additional income, funding and cost savings to secure Council Services for the future. They refer to labour as a “cost” thus making Council workers redundant giving the impression that labour is a burden and not the source of added value, which it has traditionally been.
The Strategy emphasises improving the economy and growing the income and funding base of the Council. What they mean is attracting big business through lucrative schemes, matched funding for specific capital projects and business incentives. At the end of the day it facilitates the claim of the monopolies on the returns from the social product and on the added value so as to fill their own pockets rather than any claim being made by the people towards funding services.
The government inspired authority talks about, “creating a prosperous and sustainable Island community built on the pillars of regeneration, growth and productivity”. Yet it is growth and productivity for whom? Prosperity for whom? All of which is to be funded out of the Council Tax Payers’ purses.
The funding base comprises Business Rates, Council Tax and Government Grant. Without the government grant the funding of the new style business authority means that it must ‘Become a more entrepreneurial and commercial Council as a means to generate income’ and they are saying that this is the only way to ‘avoid service reductions’. They appeal to people’s desire and sentiment to sustain services. It is their corporate benefactor’s manipulative logic.
At the same time the politician’s are pushing their, ‘Public Service Transformation’ to coincide with their transformation to a business authority. They want private agencies to deliver and outsource as much as possible so that service is no longer within its remit only business transactions and deals. Here “duplication and cost” are referenced but knowingly handing the running of essential services to companies that pay dividends to shareholders and claim added value more easily for themselves. Duplication is a red-herring as there has not been any need to set up alternatives to Council run services in the first place. Using the people’s hard earned cash they advocate a fund to “pump prime” as they call it supposedly to get their schemes started and get them up and running whatever it takes. “Spend in order to Save” will be their mantra “Invest to Save” to increase Capital schemes the fund will be called their, “Transformation Reserve”.
The next scheme to fund their business Council will be the Government’s intended, ‘Retained Business Rates system’, used driectly to assist the monopoly oriented business Councils instead of direct funding. This is similar to devolved councils who are to be funded in the same way.
The complex formula includes the following retention of 50% of all business rates instead of direct government funding and saving the central government money. Of course business rates are capped with promises of reductions and are not based upon claims on added value. For 2017/18, Isle of Wight, ‘Retained Business Rates’ are estimated at £19.5m. The government and the state have estimated the future of business rates which is to increase by the rate of inflation only (as estimated by the Office for Budget Responsibility). It is understood by the Monopolies that to attract them they will not pay towards local government any more than they themselves are prepared to offer. This is because there is no foreseeable connection to the added value of the product they make and claims made to assist funding to communities. Any form of corporate taxation is only a concession made by business executive choice not on their ability to pay.
Council Tax currently represents 49% of the Isle of Wight Council’s total revenue funding. Council Tax for the average Council Tax payer on the Isle of Wight (Band C) currently amounts to £1,382.78 (excluding parish precepts), of which £1240.15 (89.7%) is the Isle of Wight Council element. As residents aren’t all subject to the full amount of Council Tax with some exemptions and discounts (such as the single person discount) and residents receiving Local Council Tax, the authority is now extending its arm to take in more of the poor and those who have difficulty in meeting payments. There are 52% of all properties that are subject to the full level of Council Tax. The Council Tax Base (i.e. the number of Band D equivalent properties paying the full Council Tax) has been determined as 52,137.1 for 2017/18, having taken account of the Local Council Tax Support Scheme and the changes to Council Tax discounts and exemptions for the coming year. The provisional Local Government Finance Settlement for 2017/18 confirmed a Council Tax increase limit for general purposes (i.e. referendum threshold). The level of Council Tax increase for the Adult Social Care precept for 2017/18 and 2018/19 has been confirmed at 3%, this tax will be directly passed onto householders locally because the government has abdicated its responsibilities, particularly to the aged.
The business council is becoming dependent on taxing local people for its transition and capital investment plans.The authority has decided how to profile the available 6% increase over the 3 year period 2017/18 to 2019/20 within an overall cap of 6% and an annual cap of 3% (for example 2%, 2% and 2% or alternatively 3%,3% and 0%).
The decision to save £7.5m each year for the next 2 years, the Council are to increase the level of Council Tax by 1.99%. The Collection Fund is the account into which are paid amounts collected in respect of Council Tax and out of which are paid the Council Tax precepts to Isle of Wight Council (90.1% share) and Hampshire Police & Crime Commissioner (9.9% share).
The business council’s conclusions, which they say are confirmed from public “consultation” are that the Council should seek to generate income to pay for services rather than make cuts. Paying for services is a fraud because they do not intend or wish to retain them within the authority. Outsourced services will be pumped up by expensive over inflated costs that serve the business community. Therefore it is key in their belief system to secure investment and funding for business growth and “work with others” to improve services and reduce “costs” such as creating business partners. Of course the Council investing in the island economy to grow business is their main plank and sell it to the Public by saying that they will “create jobs”.
The plan for the Isle of Wight Council to become a business, rather than a community authority, is a fundamental schematic to implement their neo-liberal ideology. It is to add value and increase their ability to claim against it. The fight is now against the government and their authority who are implementing austerity. It includes the fight against transformation into a monopoly serving business authority operated by the local politicians acting in cohorts with the state and Government. It is a fight for the rights of all to Public Services in a democratic and pro-human and community centred Council.
Isle of Wight Council Committee report.
BUDGET AND COUNCIL TAX SETTING 2017/18 AND FUTURE YEARS FORECAST