Friday, March 07, 2014

My council budget speech

I have been having some interesting correspondence with some residents of Blaydon constituency about the council budget and where the blame for the current economic and financial state of affairs rests. So, to explain where I believe the problems lies, I have posted below my budget speech to Gateshead Council from 27th Feb when I seconded our amendment. To summarise, my view is that as a nation we have been living beyond our means for decades. That was what caught up with us in 2008 when the financial meltdown happened. I therefore do not specifically blame Labour for the financial meltdown. What I did not say in the speech (it had to be time limited and relevant to the council budget), but which is my considered view, is that Labour messed up big style by allowing the economy to become too reliant on financial services. Ed Balls, then the Labour City Minister and guardian of "light touch" regulation, defended the financial sector as (in my words) the goose that lays the golden eggs. The problem was that the gold was of the fool's variety and the goose ended up crapping all over the place. Nevertheless, the Labour government fed the fool's-gold-laying goose extremely well in their time in office, a decision that has left the Coalition an enormous mess to clear up. Hopefully that will answer some of the points raised by local residents.

Meanwhile, here is my budget speech:

Mr Mayor, at the risk of going head to head in a battle with Cllr Martin Gannon on who can raise historical issues the most in council meetings, I think a short history lesson is appropriate at this point on why we have the current state of affairs in this country.

I am not going to waste our time on whether or not the last Labour government was to blame for the economic crisis.

The problems go back much further. As a nation we have been living beyond our means for decades.
And at some point that catches up with you, when the burden of debt is so great it starts pulling down the economy.

It’s a bit like these sink holes that have been opening up recently.

And that’s what happened in 2008 when the financial system all but collapsed into a gigantic debt sink hole. It will take years to recover. The Coalition Government believes that a balanced budget can be achieved by 2019.

Ed Balls differs from that by only one year. He says that a Labour government would aim to balance the books by 2020.

In other words, five years of austerity cuts, rather than four in the next Parliament.

 And he has coined the phrase, “zero sum game” in which there will be no additional spending over and above what is currently planned.

On Tuesday, I was quite surprised by the naivety of some cabinet members who expressed an expectation that all the spending problems of Gateshead will be solved by a change of government.

Dream on because it ain’t going to happen.

Ed Balls has already made it explicitly clear that the money taps are not going to be turned back on.

We are, where we are. Nobody in this room likes it. But that is the reality of the situation in which we find ourselves.

Mr Mayor, the underspend on this year’s budget is somewhat surprising given that Labour members opposite last year described the cuts as terrible and unacceptable.

A year on, and you have spent £3 million less on services that you described as already cut to the bone.

I hear from various sources that Monday’s Labour group meeting was rather interesting, to put it mildly.

But there was a recognition within the Labour party that alternative provision for children’s services is needed.

Hence the last minute amendment to spend £250,000 on investigating those alternatives.

In recent years we have reviewed some of our services and set up alternatives before reforming or ending the Council’s direct provision.

Libraries and community centres are a model for how we move from being a direct provider ourselves.
Indeed, that is a model this authority can be proud of and promote with other councils.

The underspend on this year’s budget gives us the opportunity to do the same with children’s services. In other words, we can keep some of the current provision for the year ahead during which, the investigation into creating alternative provision can be carried out and then implemented.

If we didn’t have this underspend, our amendment would not be possible. We are not proposing to spend the entire underspend this coming year. Half would go into reserves.

But it has given this authority the opportunity to be ready with alternatives before the existing provision is ended.

And in many ways it complements the amendment that came out of the Labour group on Monday. Mr Mayor, it may come as a surprise to members opposite that I don’t eat babies for breakfast or joyously spread famine, pestilence and plague in my wake.

Like every other member of this authority, I want what is best for the people of Gateshead.

Sometimes we will differ on what is best. But what we can’t differ on is that we have to be realistic.
These are difficult times and austerity will continue regardless of who is in government.

And regardless of who ends up as Leader of the Labour group after the May elections, we on this side of the chamber will continue to put the case with ministers, as Cllr Hindle has already done, for the best deal possible for Gateshead given the reality of the circumstances we as a country are in.

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