The Reading Borough Council (RBC) full council meeting considered weighty financial matters on Tuesday 26 February, which included agreeing to next year’s council tax charges.

Four reports were dealt with at the meeting and these were agreed by 28 (Labour and Liberal Democrat) against 15 (Conservative and Green party) votes.

Two of the financial reports – the chief financial officer’s report on the robustness of the council’s 2019/20 budget and the 2019/20 budget and medium term financial strategy – had already been seen by the RBC policy committee a week earlier but had not been discussed at length. The two other reports were to agree council tax and approve the treasury management strategy.

Council Tax

RBC must raise almost £91 million from council tax which will be spread over the 71,988 properties in Reading (70, 843 properties in 2018). In the esoteric world of council tax calculations, everything relates back to a band D property, therefore band C – Reading’s most common property band – pays 8/9 of band D and band H 18/9 of band D (i.e. twice the amount).

BandNumber of properties2018/19 council tax (£)2019/20 council tax (£)
A6,9071,053.331,084.82
B14,2331,228.881,265.62
C29,1231404.441,446.43
D10,9761579.991,627.23
E5,5351931.101,988.84
F3,2872282.212,350.44
G1,8442633.322,712.05
H833159.983,254.46

Table 1: 2019/20 council tax from 26 February 2019 council papers,
2018/19 council tax from 28 February 2018 council papers

Although council tax will increase by 2.99%, RBC is also responsible for collecting the Thames Valley Police (TVP) and Royal Berkshire Fire and Rescue Services (RBFRS) funding contribution (or ‘precept’) at the same time. The TVP precept has increased by 13.17% and the RFBRS precept by 2.98% since last year. The large increase in TVP funding means that the total collected by RBC from each council tax payer will increase by about 4% from last year.

BandTVP (£)RFBFRS (£)2019/20 council tax (£)Total collected (£)
A137.5244.191,084.821,266.53
B160.4451.551,265.621,477.61
C183.3658.921,446.431,688.71
D206.2866.281,627.231,899.71
E252.1281.011,988.842,321.97
F297.9695.742,350.442744.14
G343.80110.472,712.053,166.32
H412.56132.563,254.463,799.58

Table 2: 2019/20 council tax and precepts from 26 February 2019 council papers

Budget cuts

The budget was introduced by leader of the council Jo Lovelock who explained how difficult local authority funding had become and how this affected Reading. Conservative and Green councillors opposed some of the cost-saving measures set out in the budget.

Councillor Rob White spoke for Green councillors and opposed the proposed cuts to public services but supported the introduction of a workplace parking levy [at 1:06:42] .

He highlighted the £13.6 million cuts to children’s services over the next three years and said he had been briefed but had been told that details were confidential because these services were now managed by an “arm’s length company” (Brighter Futures for Children).

The Liberal Democrat councillor Meri O’Connell supported the budget and said that she was pleased to see that most of RBC’s equal pay claims had been settled. She also applauded the work of council officers in applying and securing additional grants and funding streams from central government for local schemes [at 1:13:09].

Councillor David Stevens said that Conservative councillors opposed the budget, but not because of the proposed increase in council tax, which was similar to that in neighbouring authorities [at 1:14:41]. He said that the Conservative group “… has no illusion about the challenges this administration [the Labour council] faces… “:

Personally, I would rather the government be honest about the need to fund local services. Instead they have required local authorities to fund their income gap from local taxes which are paid from residual income after direct taxes has been paid, and on property, which hits pensioners the hardest. I don’t think that a government of any other persuasion would be more helpful to local government or the tax payer.

Conservative opposition to the budget was based on council spending priorities and they did not agree with the number of cuts within the environment and neighbourhood services budget. This included the closure of public conveniences and increase in green waste charges. They also opposed the workplace parking levy for those who had to drive to work, as this cost would be passed on to employees or to the customer.

Councillor Sophia James at the Black History mural

Katesgrove councillor Sophia James (Labour) countered opposition to the £10 increase in green waste charges by saying it was an excellent service that raised extra revenue to reinvest in council services [at 1:24:12].

Councillor Tony Page lectured the Green party on the risks of not setting a balanced budget, saying “it would result in commissioners being appointed to take over the running of this town and impose arbitrary cuts across all our areas of responsibility” [at 1:25:33].

He said that the Conservatives had made a grudging attempt to justify why they opposed the budget. He expanded on the proposed workplace parking levy and said that no decision had been made and that he would prefer a clean air zone in the town centre. This would also discourage vehicles taking a short cut through the town centre between motorways; this accounted for 25-30% of traffic on the inner distribution road (IDR).

The IDR overpass at the bottom of Southampton Street

What has happened to the 2016/17 accounts?

This year, there are not one but two years of accounts that have not been signed off. Councillor Stevens, chair of the council’s audit & governance committee, was given the authority at their last meeting in January to sign off council accounts on behalf of that committee.

At the council meeting, Councillor Stevens said:

We are close to the end of the story of the audit of the 16/17 accounts. I am confident the finance department is now well-led and capable and a motivated team is in place… I do think we are now close to having the accounts concluded.

[at 1:18:21]

He referred back to the February 2018 council meeting, saying:

I was rebuked for inaccuracy [by councillor Page] and told that I was responsible for smear and innuendo and that accounts were finalised and ready to be signed off by the auditor. Well, 12 months later, and after having spent another half million in audit fees, I do think that we are now close to the end. I do hope that won’t be interpreted as smear and innuendo.

Leader of the council Jo Lovelock responded to a question from Councillor Rob White about the costs incurred by the failure to complete the accounts by suggesting that some issues should have been raised by previous auditors:

If Councillor White or one of his Green colleagues had taken up a place on the audit and governance committee which, as he should know, is chaired by Councillor Stevens, a member of the Conservative group, he would have received regular updates on the work to improve the financial management of the council.

He would also know that the entire committee feel strongly that the historic issues the current auditors EY [Ernst and Young] have required the council to deal with should have been identified by the previous auditors, KPMG.

We have rightly concentrated on putting resources into this in-depth approach to improving systems and practices, but the question still remains. As councillors, we should be able to rely on advice from one of the main companies in the country

When they signed off our accounts year after year why were none of these issues identified?

She went on to say that the total audit bill would be at least £408,938, on top of which the revaluation of the council’s land and buildings had cost £113,000.

Pacioli


Links
  1. RBC council meeting 26 February 2019 papers & webcast
  2. RBC council meeting 28 February 2018 papers & webcast
  3. Reading to receive £210k Brexit funding and other tales
  4. No we are not there yet!
  5. Where are signed off RBC accounts for 2017?