Council Tax Rise 2009/10 - What's behind it?

A 4.9% rise in Elmbridge Council Tax precept for 2009-10 was pushed through by the Conservative majority group on Elmbridge Borough Council on 25 February 2009.  Following two years of freeze, which last year was based on inaccurate estimates of car parking income,  there was a major shortfall in budget.  Hence the Conservatives' 4.9% rise, together with major savings and cuts in services. 

A fully costed alternative involving a 3.7% rise and fewer cuts in frontline services was put forward jointly by the Residents Groups and Liberal Democrats, but was outvoted.

Budget shortfall 2008-09 — how did it happen?

The biggest gap in Elmbridge's 2008-9 income, compared with original estimates, comes from car parking charges:

• £450,000 shortfall from the failure to receive expected income from a 'draft contract' over The Heart car park
• £320,000 shortfall because of lower than expected off-street car park income

There was also a shortfall in land charge income of £275,000, reflecting the economic downturn. But the car parking shortfall is rather different.

Missing income from the O&H agreement

Most disturbing is the £450,000 shortfall in expected income from an agreement with O&H concerning The Heart car park.

When the leader of Elmbridge BC was asked about this by Cllr Macleod in Council on 25 February 2009, he at first said that O&H had 'reneged on the contract'. He then admitted on further questioning by Cllr Courtney that it was a 'draft contract'.

The issue here is the quality of budget projections. We would expect this particular budget projection either to be backed up by a signed contract, guaranteeing payment of what has been agreed, or to factor in a reduced sum to reflect the risk of not receiving the money. 

Is this any way to run a budget?

Without a signed contract, then surely it is unsafe to base a budget on the hope of receiving money?  Yet that appears to be what happened -- that the Conservative administration were so keen to have a zero council tax increase last year that they created a budget based on hope of receiving income of £450,000 from O&H, and £320,000 from other car parking. It's not just the opposition who think the administration have shot themselves in the foot.

The result this year?  A big hole in the books, necessitating:

• Extraordinary rises in council charges in January for long stay parking, social services and community facilities
• A 4.9% rise in council tax for 2009-10
• The council being forced to make numerous small savings and cuts in front line social services in an attempt to balance the budget.

The parking background and Surrey CC role

It would seem that there has simply not been enough income generated from The Heart car park, because many people prefer to look for parking spaces in residential roads instead of paying (no surprise, but sadly inconveniencing residents and traffic flow).

One reason? Surrey County Council being long overdue in implementing the planned Controlled Parking Zone in Walton. This has been followed by the unusual circumstance of EBC making an exceptional payment of £30,000 of EBC money to Surrey CC. This is apparently towards the cost of carrying out the CPZ work, despite the fact that Surrey CC is responsible for funding the work.

The Elmbridge element of Band D Council Tax in 2008-9 was £189.89
Surrey County Council element was £1,058.04, and Surrey Police £187.92

Despite the rises, Elmbridge Borough Council delivers services very efficiently! 
According to the Audit Commission, Elmbridge is Excellent, but Surrey is inadequate.

 

Car park price hike

The second big factor in the budget shortfall is car park pricing. The Conservative Elmbridge BC administration somehow believed that big price rises in car parks would deliver a big increase in income. In reality -- and very predictably -- when there are big price increases people choose to park park elsewhere. Hence the income doesn't meet projected level. The result? As described above, a big gap in the budget. And residential roads clogged with long-stay commuter parking.

When station car park charges were raised 42%, car park use fell by the same amount - with parking displaced onto residential roads. Many residents believe there will be a similar effect from the rises in town centre and village car park charges.

But the Leader of EBC has a different view. When he was asked on 3 Dec 2008 about the anticipated impact of long-stay price rises in town centre car parks he said "We don’t anticipate any displaced cars in places like Weybridge North..."  Read the full response to the question.