Somerset Council outlines plans for savings

Last year the Conservatives gained Somerset County Council from the Lib Dems. Unfortunately the legacy included £350 million of debt scheduled to rise to £400 million. But some radical measures are being brought forward to save money. Rather than close libraries they are looking to keep them going run by volunteers. To help cut debt (and the resulting interest bill) they are selling most of their County Farms - probably generally being bought by their tenants. I have written about County Farms before and what Somerset is doing is good for farming as well as for the Council's balance sheet. Other councils should follow. So should the MOD which owns lots of farms - over to you Liam Fox.

Anyway here is statement from the Council leader, Cllr Ken Maddox, which offers a bold and open explanation of his plans. Rather than just reciting a lot of officer speak he gives it straight.

The national financial picture is bleak. We know that like every other council in the country, we all face huge cuts in our funding from the Coalition government.

In Somerset, the situation is even more dire. We have a debt level at this County Council of more than £350m with projections that will reach £400m before it can come down.

Servicing debt is our second biggest bill, Not fixing roads: Not looking after vulnerable people: Not improving schools - but debt.

This can't go on. Change is essential and we are bringing a New Approach to what we do and how we do it at this council.

We are going to have to stop some of our services and we have to be a smaller and better-run authority. There is no wriggle room here - they are blunt facts. Smaller, leaner, more efficient.

It is not my doing, but it is my responsibility.

Despite the touch times ahead, I don't want to lose sight of the fact that there are a lot of great people at this council doing a lot of great work.

*I mentioned roads just then - but we have fixed 19,000 potholes since the February storms. We have taken down nearly 400 signs cluttering our roads, and we are increasing investment in our roads.

*I also mentioned vulnerable people - but an unannounced, and I'd like to stress that because in my view it doesn't happen enough in the public sector - an unannounced inspection of children's social workers last week gave us an excellent and really positive health check.

*and I also mentioned Schools in my introduction - but across Somerset our GCSE results are up 5 per cent, great result and my congrats to all our school students and their teachers for all their hard work.

But my opening sentence outlined the bleak national picture....we know we will not be able to carry on doing all we do now in the future. We are counting on private enterprise and hard work to get us all out of this fix. That's why here in Somerset we've made the local economy our priority so I'd like to make some very positive announcements.

1) I can now announce a second year commitment to a zero per cent increase in Somerset County Council's council tax bill.

Always hoped to be able to achieve this, now able to say we intend to deliver it. These are tough times for everyone and its important the Council does not increase the financial burden on the residents.

2) There's only a limited amount any council can do to encourage enterprise and businesses but here in Somerset we are committed to do whatever we can -

Our priority is to make Somerset as business-friendly as possible.

That will sometimes mean thinking creatively and going the extra mile;

•Here's an example from last week; we were able to announce our help for a world famous company in West Somerset. Snazaroo is a flagship manufacturer in Minehead with a worldwide reputation for face and body paints. I'm delighted that following negotiations with Somerset County Council this expanding company was able to use some of our business space to remain in Somerset when it had looked like it might have to move outside the county. That's 50+ jobs saved for the local economy.

•I'm delighted to be able to highlight a decision taken this week that will pull public and private sector together to encourage more small firms in Somerset. Somerset County Council has a stake in around 70 business start-up spaces on industrial estates around the county - worth several million pounds. For the first time we will now stop acting as just landlords, and instead ask a private company to run "end-to-end" support. I hope this will attract new businesses into Somerset and, importantly, help people in Somerset with their own great ideas to turn them into new start-up companies.

This partnership might involve capital to help start-ups, business advice, mentoring or helping like-minded companies talk to each other. It will be led by the private sector and will help to boost the local economy across Somerset."

So help for council tax payers, and help for business. Now for the really tough decisions that we have had to make.

So how big will the cuts have to be?

We're working on an assumption that our main government grant will be cut by between 25 and 40 per cent and that means we have to reduce our own spending.

We have boiled it down to one simple fact.

We anticipate the gap between what we currently spend and what we get from government grants and council tax will be £75m over the next three years.

A gap between our spending and our income of around £75m over the next three years.

At the same time as we face massive cuts in government funding, we also have increasing demands on our services.

An aging population:

More vulnerable people living for longer and with more complex - which also equals more expensive - needs:

Stricter national regulations following cases like Baby P that quite rightly have a direct impact on the numbers of children in care.

It all adds up and up (and up).

And it's already started. We are currently dealing with a £10m cut in funding this financial year.

The government will clarify our position with its spending review on October 20th and our budget will be presented to full council early next year when a detailed breakdown of our how our services will be funded is published - but one thing is clear:

Much less money, much more demand.

Something has to give. It will inevitably mean cuts. We will have to stop doing things - we just can't afford to carry on as we are.

These cuts will impact on everyone and we will be working with local communities, voluntary groups, charities and other public sector partners to see how we can continue to deliver services locally. If other organisations or local people can get involved in running some services they feel are important and want to keep - we will listen, and we will help.

County Council jobs

£75m is a huge figure to deal with and will have a significant impact on the number of council jobs.

Our current workforce - excluding schools - stands at around 6,500. We expect this to fall to close to five thousand over the next three years.

That may mean fifteen hundred fewer people employed at this council over the next three years.

How are we going to achieve this?

We've already carried out a trawl for voluntary redundancies with more than 1,000 people interested, and we are working through that process now.

We've had a recruitment freeze in place for over a year that has delivered more than £1.5m in savings to date.

Sadly though, the scale of these cuts means that there will have to be some compulsory redundancies. We will try to keep these to a minimum but inevitably there will be pain as a result of the decisions we have to take.

You'll understand that we cannot have exact numbers on this at this time, but I will be as upfront and honest as possible on this issue that affects so many people.

So what can we stop doing?

I can tell you now that we are stopping the vast majority of our planned building projects.

I was going to give some examples, but before I do, its worth pointing something out - nationally, locally, individually.

We just can't go on borrowing, putting everything on the tab, on credit, on the Never Never. Building invariably means borrowing and we just can't go on putting millions and millions of pounds on our overdraft.

So what are we stopping?

We have had to look again at all building projects we had hoped to achieve:

1) I can announce that one of these projects is the new school that had been planned for Yeovil amalgamating Grass Royal, Reckleford and Pen Mill. Cost is £8m. I hope that funding can be found in the future so that we can do something to improve the schools but it's unlikely that the entire project can go ahead now.

2) We had hoped to be part of a £6m scheme to pedestrianise Taunton Town Centre - we can't afford this now. Although disappointing, we hope to revisit this in the future if money is available from developers.

3) We had hoped to buy the doctor's surgery in Castle Cary to create a new Children's Centre there. This is now unlikely to go ahead, with a formal decision expected next week.  A saving of £300k of public money.

All this of course on top of major announcements made earlier this year about other projects such as the decision to cancel the planned park and ride extension at Silk Mills in Taunton - a £750k saving.

These examples give an idea of the difficult decisions we are facing. We have to work out what we CAN afford - and what we CANNOT. But what is clear - there is no more borrowing.

Everything this council does is being reviewed. Does it really need to be done? Does it provide value for money? Are we the best people to be doing it? Key questions but with our funds slashed at a national level we have to find the answers and make difficult decisions.

Wherever possible we want to put our residents at the heart of these important decisions. One of these areas is our library service. We are about to hold a series of Focus Groups to discuss ways in which we could deliver the service differently. The results will feed into a formal review of the service. There are no results as yet as the review is underway and will take a while to complete. But what is clear is that we are keen to see if voluntary groups, communities and charities can get involved and help us with the running of some of our libraries.

For local people who are interested, these are exciting opportunities and we want to make it easy for people to come forward and talk to us about how to get involved.

While the review is underway however I can tell you that some libraries will be temporarily reducing their hours from next month directly because of the financial squeeze on this council. These are Priorswood, Minehead, Porlock, Watchet, Castle Cary and Wincanton - and Bruton library will be temporarily closed.

Arts Grants - I anticipate that we will have to make major cuts to our arts budget although no decision has been formally taken as yet. However, we are likely to move away from just giving grants to groups across the county but instead look to focus our financial help on specific projects.

One of the most heartfelt debates we have had over the past few months has been the decision to review our holding of County Farms. We have listened carefully to the passionate lobby from farmers and their supporters. We promised a farm-by-farm review published the first results in July, and showed that we had listened. The recommendation was to keep one farm in council control and extend the lease of two others for an extra year with a view to sell after that, giving tenants the time to organise and plan for their futures.

We have now completed the latest phase of that farm-by-farm review and of the remaining 60 farms it is clear that the recommendation will be that the council should retain around one third. Of the other two-thirds that the review concludes we could sell, the majority of tenants have expressed an interest in purchasing some or all of the farm holding. The next phase of the review will see detailed consultation with the farmers - this is an on-going process and no formal decision has yet been taken.

I'm also really interesting in talks we have been having with larger farming concerns such as Crown Estates to gauge their interest in buying the remainder.

My personal view is that there is an extremely good chance that the vast majority of the County Farms will remain as farms. It's very early days but we are working hard on this and will publish decisions as and when they are taken.

So, in summary:

We are facing a huge cut in funds from government and will have to cutback on many of our services.

This council faces a deficit of £75m over three years.

We will have to deal with losing 1,500 posts at this council over the next three years.

We will have to stop almost all our major building projects and examples I have given include a new school, children centre, and pedestrianisation scheme.

And we already have to look at cutting services including temporarily reducing some library opening times and closing one down.

But...

We are committed to boosting the local economy to help private enterprise lead us out of this national financial crisis.

We are committed to work with local community groups, volunteers, councils and charities to help them take on some exciting projects to protect services they think are important to their own areas.

We are in talks with big farming groups about the future of our county farms.

And finally, we intend to deliver a zero per cent council tax increase to help our residents.