Prudence with a Purpose

12.00.00am GMT Tue 13th Mar 2001

Last week Liberal Democrat-controlled Islington became the only Borough in London - and probably the only Council in the country - to cut its Council Tax this year. Just two years ago Islington had the highest level in London. Now, after the Liberal Democrats took control in January 2000, and a fall of 25 last year, and 10 this year, more than half of London Councils will have a Council Tax higher than Islington. Other levels of Government - national, and regional - have done their best to throw in new obstacles to prevent us. Despite being one of the most deprived Boroughs in the capital, Islington had a lower increase in our SSA than almost every other Borough. We have also had to absorb the additional 28 added to every Council Tax bill in London by Ken Livingstoneís additional police precept. Our baseline level - excluding the precept outside our control - has now fallen from 791 in 1999 to 722. Neither was the financial legacy we inherited very promising - total Council debts were not far short of a billion pounds, and with gaping holes in the Pension Fund, in the Insurance Fund. Our cuts in tax levels have not been at the expense of front-line services. In fact, Social Services will benefit from a further increase of nearly 2 million next year (following an extra 2.5million put in last year), Environment around 1m extra, and Education an extra Ö We are also embarking on a huge 77m programme of capital investment next year, and over the next three years we will be putting 30m desperately-needed capital investment into Islingtonís schools. We are also successfully building up our reserves to a sensible level - something which the District Auditor severely criticised the previous Labour administration for failing to do. How are we managing to do all this? Firstly, we are crystal clear about our goals. Islington Council under Labour charged an enormous Council Tax to provide poor-quality services - and their solution to everything seemed to be to raise the Council Tax to plug another hole. We campaigned clearly on a platform of cutting the Council Tax and we are rock-solid in sticking to this. Secondly, we are unrepentantly forcing the Council to re-focus on providing good quality basic frontline services. A more strategic approach from Councillors to managing the Council allowed us to cut 5m of waste and bureaucracy pretty much immediately. As a new Liberal Democrat administration with a fresh approach, we were also able to tackle robustly ësacred cowsí that Labour would never touch, across a whole range - from providing a constant supply of sandwiches in the Membersí Room, and personal secretaries for a dozen senior Councillors, to merging the anti-racism unit, the anti-disability unit, and the womenís unit into one central Equalities Unit which was able to punch at a higher weight. We have recruited several new good quality senior staff, particularly in financial management across the range of Council departments - and this has been helped by our Groupsí reputation for rigorous management. This is sorely overdue - for example, on taking control we discovered a recurring annual overspend in Social Services which last year cost us 5.5m, and which previous financial systems had apparently failed to pick up. Combined with a vigorous programme of Best Value reviews this is yielding results in progressively raising standards across the Council. The roots of our difficulties are financial problems going back to the loony left era of Margaret Hodge - the days of the red flag flying over the Town Hall, and banning ìBaa baa Black Sheepî in schools. Labourís financial strategy - which Lib Dems at the time called ìlive now, pay laterî - had something of the nursery rhyme about it too. Council reserves, and in particular the pension fund, were raided to fund extravagant services. Throughout the 1990ís, Labour were forced to pour money into these holes, a little at a time, solving every ad hoc problem on a one-off basis - usually by slicing something else off Social Services, or by putting up the Council Tax. One-off costs were constantly having to be met by revenue spending - so itís hardly surprising that the Council Tax went through the roof, and the underlying problems were still not addressed. We have taken a clear view that one-off problems - such as building up reserves, plugging holes in the pension and insurance funds, and making some provision for bad debt - needed the investment of significant sums of one-off repayment to solve them. This is exactly what we are doing, and by doing so releasing revenue from the Council Tax, to pay for the core services which it is the basic business of Councils to be providing. The Council we inherited had a huge inherited property portfolio - and in areas which it is simply not the business of modern Councils to be involved in. How many derelict cinemas and disused pubs does your Council own! And these ìassetsî were not even bringing in revenue to the Council. 10m worth of assets we have realised to date were bringing in annual rents in the region of just 3,000. We have sold a number of sites and properties, raising revenue for the Council, and allowing private sector cash of a magnitude the Council could never hope to match, to regenerate long-disused sites in the Borough. Determinedly re-focussing the Council and its activities on providing the core basic services - housing, education, social services - which our residents desperately need, we have streamlined the Council, as well as unleashing significant resources to invest in services. Weíre not there yet - but Islington Council is well on the way to providing decent quality public services, at a sensible level of local taxation.