May I answer the correspondent in last week’s Newton News who asked me to explain why I supported the 1.99% increase in Durham County Council’s Council Tax, and why DCC are cutting services.

The answer lies in this table:
DCC Budget                                      A                    B                         C
.                                                      2010-11          2015-16             2018-19
Gross budget                                   £1,390m         £1,363m           £1,297m
Income (rents/ fees etc. )                 £896m           £946m             £950m
Shortfall – to be found in the
main from:                                        £494m            £417m              £347m
•    Govt grants                                 £292m            £181m              £95m
•    Business rates                             –                    £55m               £59m
•    Council Tax                                 £199m            £174m             £186m

FACING THE CUTS
Column A shows the situation of DCC in 2010 – an enterprise supporting almost £1.4 billion of statutory and discretionary services to the people of County Durham.  Some of those services were chargeable, giving the Council an income of £896 million from rents/ fees etc.  The shortfall was covered by £199 million of Council Tax, and £292 million in government grants.
The new government in 2010 changed everything.  It has slashed government grants to the Council.  It also withdrew 10% of the Council Tax rebate grant (for the 65,000 Council Tax payers on benefits) which has hit DCC’s Council Tax yield.  The government has given councils half of the local business rate, but in County Durham, which is economically weak, this does not amount to much.
Column B of the table reveals how all of this has affected DCC.  Since 2010:
• the amount of grants the Council receives has fallen by £111 million (38%)
• the amount it receives in Council Tax has fallen by £25 million.
(For data geeks, this is before inflation, so ‘in real terms’ the reductions are much greater than 38%.)  Thus the Council has been forced by the government to make unimaginably huge cuts.
MAKING THE CUTS
So far, most of these cuts have been to ‘back-office’ functions, and not front-line services.  Nearly 2,000 people have been shed from the DCC workforce.  However – just as DCC is running out of ‘back-office’ functions to absorb such huge cuts – the government has announced a further £86 million of cuts to the council’s grant-funding over the next three years (Column C).  That will mean that government grants will have fallen from £292 million in 2010 to £95 million in 2018.
I wonder if people fully appreciate what it means to cut such huge sums?
Consider the following three recent very difficult spending decisions the Council has had to make:
1.  the closure of the Council’s last five care homes … saved about £¾ million pa;
2.  the green waste bin charge … will save less than £1 million pa;
3.  the street light reduction /removal programme … will save £2 million gross pa.
All these proposals have angered the public.  So if these cuts have caused such reactions, what is going to happen when the Council has to set about cutting £86 million from services?
SURVIVING THE CUTS
A council by law cannot declare a deficit budget – it has to balance the books.  So DCC cannot ignore the cuts in government funding.  The government has found the perfect victim – DCC has to implement the government cuts, and then takes the blame for implementing them.
Column C summarises the Council’s Medium-Term Financial Plan for the future.  It envisages a reduction in gross activity of £66 million, 2016-2019 – the cuts will be eye-watering.
You will see in the Plan that there is the presumption of a rise in income from Council Tax. Without it, the cuts will be even worse.  Indeed, this year’s 1.99% rise will raise £3.4 million pa – almost as much as the three recent spending cuts above – i.e. the rise will save us having to make cuts of that magnitude.  That is why I voted for the rise.
I am happy to explain issues-arising if people wish to raise them.  May I also stress that this is my own explanation of my own decision, and that I am not speaking on behalf of DCC.
John D Clare