Financial Discipline and Raising the Tax Base

The Treasury Management Strategy and Capital Strategy report went to Audit committee on Friday 22nd February where its recommendations were noted. Questions were asked on preparations for a financial crash and management of group accounts.
We were mindful too of External Audit making high level points on –
– medium term financial strategy;
– governance in relation to management of capital;
– arrangements for governance and monitoring of subsidiary companies.
The Audit cttee got no press coverage – even with a double sized agenda – and I’m aware that the glamour and reputations come with spending; the notoriety more often comes with discipline.

People proclaim that no-one wants to pay taxes or levies; and indeed Gordon Brown set out to say he was against tax and spend. I saw Barbara Castle take him up on it.
But you do want a framework to bring sense to the spend.
Betty Higgins told stories of how committees found out on their individual budgets on a special day, implying they weren’t part of the financial planning process at all.
Michael Cowen – once Labour, then defected to the Conservatives (and infamous for losing Ashfield), was tax and spend in 1981 – “What do you need”.
Cowan wrote a paper on financial planning in 1973. Decrying “budgets set around the calculation of rate poundage and simple control of expenditure than than of policy”.
Of course, post 1985, budgets have had to be balanced by law. 

Much of budgeting was already set against a policy framework was in place when I arrived on the City Council.
But it was certainly a big theme whilst under a Labour Gov’t – they wanted to see returns for the extra money they were providing.
And we did have to work on a spending discipline – expecting departments to keep to their budgets.  

Zero-based budgeting was a fad, so as to avoid salami slicing. 
But it was so much easier under a Labour Gov’t. Whilst in five years, I cut an average of £5 million extra each year, all of the budgets saw an increase in spending to meet the challenges of improving schools, helping people in need and cutting crime.

I feel no envy for colleagues who have had to work at finding £23 million of cuts,
– massive cuts
– growing social need
– financial sector not offering easy wins.
Must be hard to make strategic changes in such an environment.
But still we strive for new ideas and aims in the new manifesto.

Maybe the Conservatives will have something to say about new ideas – or even previous ones such as privatising Nottingham City Transport.
(They said they wouldn’t.)
Instead, it was mitigating the council tax increase by 1% with one off-spends? 
And proposing a £3 million investment package on social services by raising money from selling 50% of Robin Hood Energy shares. Yep, announcing as share sale with a price months in advance.
All those Conservative lectures on how to do finances!
Nationally, as bad –
– Grayling losing £2.7 thousand million;
– desperately late preparation for Brexit on March 29th
The Conservatives’ explicit national policy was to reach zero deficit and then cut debt;
– cuts to do it.
National targets on deficit, dropped and replaced by a new target twice time and now on the third time, no target at all
National debt doubled.
“Austerity Now over” – except it plainly isn’t.
The strategy has always been –
– put people back on private services;
– break manual labour’s terms and conditions for easier profit;
Meanwhile Conservative councillors say – “What about the capital rich and revenue poor”!
Out of touch with the needs of our city. In part cos they won’t measure poverty properly anymore.

I think McDonnell could add to his finances ambition, and the existing ways of showing how extra money will be found. 
By embracing financial planning and consultation over the priorities.

1945 ain’t a bad place to start
– full employment;
– and end to homeless;
– quality education for all;
– quality health and care for all;

And now –
– proper jobs, terms and conditions;
– meet the challenges of the global economy;
– meet the challenges of climate change;
– equal opps. 

I meanwhile am proud to have been part of Labour Group who fundamentally understand the key elemental priority of boosting the base to pay for the services that help those most who are most in need.
It may be the most basic element of financial strategies, but I’m proud we’ve done it.

(Based on a speech I made at full Council.)

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