There was been much talk over the past few years about the high levels of financial reserves held by the RBKC and during this time the Council have frequently been accused of hoarding tax-payers money and of being “the richest borough in the universe” . However, despite these claims, on Thursday 24th November 2016 the Council suggested that they would be forced to raise Council Tax rates by 2% or face the prospect of having to cut services for vulnerable residents.
It has long been the belief of the Grenfell Action Group that RBKC are motivated to raise Council Tax for their own nefarious ends and delight in nothing more that being able to threaten the poor and vulnerable with the removal of vital services to achieve this goal. RBKC has a long history of overtaxing residents in order to create a big piggy bank for vanity projects such as Holland Park Academy, Exhibition Road, Holland Park Opera, Leighton House Museum, interest free loans to developers for projects such as the Design Museum and the purchasing of an abundance of expensive artworks to name but a few……
In this blog the Grenfell Action Group will forensically analyse the figures surrounding the total level of investments (including reserves and cash surpluses) at the disposal of RBKC and question whether our Council has legitimate reasons to raise Council Tax.
At the end of 2015 the total investments and reserves of the Royal Borough of Kensington and Chelsea amounted to £327 million (that is just under 1/3rd of a billion pounds) while, at the same time, the Council is reputed to have long-term debts it is required to service of £154 million. To the layman this would suggest that our Council (which is currently pleading poverty and threatening to remove services from the most vulnerable) actually has a balance surplus in excess of £173 million!
It is a sad fact that the RBKC manages these reserves in the most unproductive of ways and it is quite obvious that if these finances had been invested in a more competent and professional manner then there would be no need to suggest that an increase of Council Tax was necessary at all. The majority of the Reserves are kept almost entirely in low interest funds or the Debt Management Office, and the return averages just .38% . Given that inflation is now circa 2.5% it does not take a rocket scientist to work out that the Council investment strategy is actually losing tax payers money! Further analysis of the RBKC ineptitude with handling large scale investments and the cost this wreaks on local residents can be found on a recent blog posted by the Hornet’s Nest:
The RBKC claims that it is the impact of Central Government cuts to local authority funding that has provoked the current suggested increase in Council Tax but in the case of the Rotten Borough, this is simply not applicable. While Central Government have been systematically cutting back the money that they have been providing to Local Authorities the RBKC has responded by making savings of their own. In fact RBKC have been so over zealous with their cut backs to vital services that they have managed to save considerably more that the reduction of revenue imposed upon them by Westminster.
While citing ‘austerity’ and ‘tough decisions’ the Council have cut back on services so much that residents are feeling the pain – particularly the most vulnerable who can least afford such cuts. Backroom staff are cut unnecessarily, and remaining staff are often over-worked, leading to a rise in sickness due to stress. Added to this, the RBKC have been coming after our most cherished institutions, Adult Social Care and Children’s services, voluntary organisations and libraries in the name of balancing the books.
And yet, most of this is simply unnecessary. Here’s why. Below you will see a table of government funding cuts to RBKC since 2010 and how the Council has managed these cuts so they are matched by savings. So, in the second column we can see that Central Government was responsible for cutting £11.6 million from it’s grant to RBKC in 2010/11. In the third column for each year is the total of UNDERSPEND across the Council for that year. So in 2010/11 the RBKC under spent it’s allocated spending reserves by a total of £9 million. The fourth column shows how much of these under spends have been moved to the Council’s Reserves to be used as a slush fund for future spending. All these figures are publicly available and have been taken from the Council’s own documentation. What is plain to see is that despite years of consecutive Government cut backs the RBKC has systematically managed to save money and move this money away from paying for front-line services and into a fund for rainy days. The ‘usable Reserves’ from which capital and other projects are funded look like this, according to the annual Statement of Accounts:
A large proportion of the Revenue underspends every year are put into the Capital Reserve, to fund major projects. However in the past six years, the difference between ‘essential’ cuts and ‘realised savings’ is a whopping £30m. That means that c£30m has been cut unnecessarily, and added to the Capital Expenditure slush fund.
Now let’s look at four years of UNDERSPENDS in essential services:
These cuts in services have impacted on the poor and the vulnerable in a highly disproportionate manner. For example the cuts to the Council’s budget to the Homelessness Prevention Team in 2014/15 has seen a direct decline in services offered to rough sleepers and no one will forget how RBKC blamed a lack of finances for the reason behind the closure of the much loved Maxilla Children’s Centre back in 2015.
So while the Council bleat on about austerity and the need to cut vital services let’s have a look at what Paget-Brown and his cronies consider are legitimate expenditures. Over the past few years they have decided that offering cash incentives to voters at election time and the purchase of elitist Pre-Raphaelite art, is more important than providing care for the homeless or the provision of children’s services in the North of the Borough.
So, let’s look in detail at some of these so-called PRIORITIES:
In 2010/11 (election year) £4.2m was spent on an ‘efficiency dividend’ of £50 paid to to all RBKC residents registered for Council Tax.
In 2013/14 (election year) £7.5m was spent on an ‘efficiency dividend’ of £100 paid to all Council Tax PAYERS (ie those not in receipt of Housing Benefit).
Other so called priorities include lending Sir Terence Conran £2 million, interest free to fund his plans for the new Design Museum, the £28 million spent on granite imported from China for the Exhibition Road and numerous other vanity projects that do nothing but massage the self aggrandisement of those occupying positions of power in Hornton Street.
Here are some more very dubious ‘PRIORITIES’:
The Grenfell Action Group believe that the RBKC are acting in a vicious and unprincipled manner as they plan to raise Council Tax by threatening that they will have to cut services to the most vulnerable if they do not do so. The information contained in this blog clearly shows that the Council have in excess of £172 million sitting in reserve and that they have managed to increase their savings despite recent cut backs from Central Government funding. The Council have accrued over £84 million into a “slush fund” by clamping down on essential services while at the same time crying poverty.
We have to ask how much money do these charlatans need to accumulate before they stop raising taxes and cutting services to the most vulnerable. It seems that the Council’s plans are not driven by fiscal concerns but rather by a seemingly endless need to hoard our money and punish the poor.