Estimating for 2007/08 Fylde's draft budget plans for next year have just been published, and they have some shocking implications for Fylde Council Tax payers. This first level of budget preparation is the main item on the Politburo agenda next week, and despite the Commissar's £340k excess profit from last year, he now suggests they need an extra £841k to spend, over and above what they would normally plan to raise. Dedicated number crunchers amongst our readers can see the full report on FBC's website.

They need the extra money because:

The will pay an extra £200k in salary and wage increases.
They expect to pay an extra £250k in bus fares for OAP's (having already snaffled a sum like this from the extra cash they were given in the first place - see 'Budget Busting Bus Blues' )
They can't charge some of their staff salaries to capital schemes because these schemes have now ended (£193k)
They need to provide for future pensions - £90k
The Government is cutting back payments for doing some of its benefits work, reducing Fylde's income by £57k
They will have to pay interest on borrowing for future capital works, (their money from council house sales has now more or less dried up). The estimate this will cost about £30k next year
They want to spend on what they call "Investing further resources in beach safety." This follows the money they spent on the "Safer Sands" consultancy last year, and will cost an extra £21k next year.

Trying to find an extra £850k in a budget already stretched by ineffective spending, mushrooming overheads and consultancy costs, is not an easy job when the Government has said it will limit you to no more than a 5% increase.

Fylde has two alternatives to sort the job out.

The first proposes changes to working arrangements that would further cut expenditure and increase income. They think this would produce between £850 and £980K.

The proposed changes are graded as high, medium and low impact.

Losing an accountant (saving £24k) is considered high impact, and increased income from swimming lessons (also £24k) is considered low impact.

The cuts include £80k savings on property maintenance, and several small sums achieved by not filling staff posts, including the accountant, benefit fraud investigator, pest control officer, several trainee posts, and a conservation officer.

However most of the 'savings' are theoretical expectations of increased income. This is notoriously difficult to predict with accuracy.

Notably their extra income includes £150k of easy money from (yet another) a raid on reserves.

It also includes £100k in theoretical income from the new trading company (more about this in a future article, but it's not such good news); and more income is expected from sandwinning (54k).

They also considering increasing the Council Tax by 6.4% (raising £70k), charging election expenses to parish councils (which means Parishes will have to charge their residents an extra £40k), and raising another £30k from sponsorship income.

Mums can expect to pay at least another £24k in swimming lesson charges, and Dim Tim plans to raise another £25k from parking charges. You can hear the groans building up from here.

Amazingly, one of the quotes in this section of the report says ".... those savings rated as high impact would place severe strain on the Council's corporate capacity and ability to maintain its financial competence". (Implying it is financially competent now!)

The second option is to use what they describe as low and medium impact savings (like those listed above) to get most of the savings, then to implement a variation on the Commissar's beloved 'Equitable Taxation' scheme.

It seems that nine or so parish councils have been hoodwinked into believing they will be better off if they charge a parish rate for looking after parks and open spaces.

Most of these parish councils own their own parks, but currently they get paid to maintain them from a communal pot funded by FBC (so everyone in Fylde pays in an equal share from their Council Tax)

Under the Commissar's plan, Town and Parish Councils will charge people the cost of looking after the parks in their own patch, and they will expect Borough Council to reduce its charge to them by the same amount - so their residents will be no worse off overall.

There are two fallacies in this belief. First, FBC won't reduce its charge - it is only implementing the scheme so it can create itself some spending headroom beneath the Government's imposed capping limit.

counterbalance has no doubt Fylde plans to continue to charge the maximum Council Tax it can get away with.

Secondly - as we have said ad-nauseum here, 60% of FBC's income comes as Government grants arising from national taxation, and only 40% comes from the local Council Tax. Fylde BC is not going to pass on any of these grants, and parishes are not eligible for them directly, so spending £1 costs their taxpayers £1 (as opposed to Fylde spending £1 which costs local taxpayers only 40p)

However, the nine parishes that have been conned don't really amount to a hap'orth of beans in FBC's scheme of things. The real money rests with St Anne's, Lytham and Kirkham. Here FBC has a problem. It already owns the parks itself, and it already pays for their maintenance directly.

So in order to charge the people extra in these areas, it plans to implement something called "Special Expenses".

There are significant legal complications with this, and counterbalance has a friend who is likely to challenge the legality of what is planned, but basically, Fylde plans to charge a council tax that it calls "its own". After that, (it thinks) it can charge the "Special Expenses" as a second tax in St Anne's, Lytham and Kirkham where it does the parks itself.

(The implication here is that Fylde Council clearly doesn't think it should provide parks, they should be provided by Parish Councils, leaving FBC to get on with the real work of paying consultants for useless studies on the beach).

It also says it plans to implement the Special Expenses scheme in those parishes who have said they won't levy the second tax themselves.

So in St Anne's and Kirkham, for example, we have the prospect of three charges on the Council Tax bill, one for Fylde BC, one for FBC's Special Expenses scheme, and one for the local St Anne's or Kirkham Town Council precept.

The only people who think that overall, these charges will be within 5% of last year's council tax bill are those fortunate enough to have regular sightings of flying pigs!

Adding insult to injury, the report to next Wednesday's Cabinet meeting says "This approach would more than balance the budget as it would result in total savings to the budget of £1,117,240. Should Members wish to implement this approach and take some of the total savings to fund some of the revenue growth requests listed in Appendix 1 ........."

So it becomes obvious that the supposed savings (although they will be buried in accounting smoke) are being planned for spending even before they have been agreed!

Even if the Commissar is shamed into producing a some mini-savings for the few parishes that have helped him this year, you can bet those savings will evaporate before next year's budget.

So much for the deluded who thought there would be an overall saving if they implemented double charging for FBC.

counterbalance is watching all this with interest, but we think we might be watching the death throes of the idea.

The legality is dubious; Fylde's external auditors are already looking into what is being planned. It is election year (and even Dim Tim will see the sense in not charging double tax just before you ask people to vote for you).

However, the most significant reason to abandon it is that only those parishes conned into double charging will be outside Fylde's capping limit.

Special Expenses count as being within the capping limit, so Fylde will get no benefit from implementing them on the lion's share of its spending on parks and so on. The whole process was simply to put the frighteners on the wavering Parish Councils. There is no financial benefit whatsoever for Fylde, and there is considerable hassle. (That's not to mention the gross waste of time and money on what will probably become yet another aborted crackpot scheme)

So overall we suspect it will probably die quietly, but you can never be sure with the Commissar.

We'll bring you more after the meeting next week.

Dated: 8 February 2007