In my previous two columns I have written about the financial challenges we are facing as a council.
Challenges we are facing due to our Revenue Support Grant - the main government grant we receive to support a range of council services - being dramatically cut. In 2013/14 we received a grant of £55million and this will have reduced to just £10million by 2019/20 - a cut of £45million over six years.
When you consider it now costs the council £46million every year to provide adult social care to the elderly and those with disabilities in our city - a figure which will only rise further - it’s easy to see the size of the challenge.
Austerity has been in place since the turn of the decade and I believe the council has now reached the stage where we are no longer sufficiently funded to provide the services we need to deliver for residents. As I’ve said previously, we need a fair funding deal from government.
I wholeheartedly agree with the editor of the Peterborough Telegraph who said last week that councils also need to generate income to protect services and to operate more and more like a business.
Recently there was a debate at Council about loaning money to the developer who’ll build the Fletton Quays hotel. This will not only accelerate the completion of Fletton Quays but it also generates income; income which is then used to plug the gap caused by years of cuts to our funding by government.
We are able to borrow money at a lower interest rate, because we’re a council, than the developer can on the open market. We then loan the money to the developer at a higher rate of interest to what we borrowed it at, and then after two years the developer pays back the loan with a six-figure sum of interest. It’s then the profit from this interest which we can re-invest into council services, such as providing social care support to elderly people in their own homes.
Councils have to be able to generate their own income in order to continue to deliver services, a point which appeared to escape some of our opposition councillors recently.
We are also striving to develop other methods of generating income to help close our budget gap. One of the ways we do this is to sell our innovative ideas to other councils. Take for example the way we changed library services a few years ago, by promoting digital self- service. Instead of putting our feet up once it got underway, we developed a framework that other councils could purchase from us to develop the same service in their area. This framework is now being used by around 25 other councils across the UK.
Other examples include selling our officers’ expertise to other organisations, rent from commercial property, selling electricity produced by the Energy Recovery Facility in Fengate from residential waste as well as reducing our costs by sharing services with other councils.
However I believe that generating income will only take us part of the way to meeting our financial challenge and the government needs to recognise the city’s growth and unprecedented demands on our services and give Peterborough a fair funding dealing for our residents.
Following the government’s new approach in determining future housing provisions, we learned this week that less new homes than we previously thought are needed in the city.
This means officers could remove the new settlement to the north of Castor and Ailsworth from the council’s revised Local Plan. This recommendation will now go through the decision making process over the coming weeks and if agreed, will be subject to public consultation by you all in early 2018.
The decision to pause and review the new evidence from government was both correct and important given the significance of the Local Plan on the development of the city and surrounding areas.