Tuesday, 28 June 2011

The ticking time bomb under Frodsham Town Council

We had something of a row at FTC last night about the Council's budget and the ticking time-bomb beneath the Council.  So what is the issue:

Spending Plans - £157,000       Income from Council Tax £114,700
                                                 Other Income                   £   8,000
                                                 Total                                £122,700

Shortfall to be met by around £34,400 of reserves.

Clearly no Council, no business and no household can continue to run itself dipping into its reserves - it is unsustainable.  Most Councils and businesses seek to run themselves with spending plans running beneath income - and that is the model we will have to move to at Frodsham Town Council.

Now when a Council has 'excess reserves' it is right that they are paid back to Council Tax payers by way of a reduction in the Council Tax and that is the position FTC is in right now.  The old Town Council through budgeting errors, through a failure of ambition and through a failure to identify projects and proposals until almost the last moment of its existence had not earmarked its existing reserves for anything - hence having 'excess reserves.'

The new Council is different - it wants to see things change and wants FTC to be active and engaging.  It wants to invest in Frodsham - it wants to see the reserves used for things of benefit for the community - not just for paying the running costs.

So what is the ticking time bomb.
Well lets pretend the reserves weren't being used this year.  Assuming the same spending plans the Council Tax would have to rise from £30.77 per band D property to something closer to £39 or £40.  For every £10,000 in income you have to raise the precept by around £2.88.  So a £34,400 lift in income raised entirely by the Council Tax would add about £9.90 to the Council Tax.  Any additional resources required on top of the existing plans would require additional rises in the Council Tax.

This is the legacy we have been left - the sure knowledge that even to stand still we are faced with Council Tax rises.  It also shows you just how bad the old Council was and the false position we have now with a Council Tax as low as £30.77 per band D.

Now the average Council Tax for parish councils in England is around £42.  That's where Helsby Parish Council have their Council Tax.  They are a quality council ... if only FTC was too... but that is another story.