£14m deficit that may bankrupt Southend is Labour, Lib Dem and Indie’s creation

Review of the Policy and Resources Scrutiny CommitteeThursday, 5th October 2023 at 6:45pm 

The tension between Labour and Tories was clear throughout the discussions scrutinising the numbers.

The crux is that Labour’s budget that the Tories are now using from before the previous election in May, has landed them with a £17m deficit less £3m in reserve money to take it down to £14m.

Whilst it was agreed that adult and child social care was the primary reason, no one mentioned that it was the Labour-led policy to pay the living wage as the actual cause.   For the Tories, it seems an obvious point to make, however, no one wants to be seen to take money away from carers and so this elephant lies quietly in corner.

Clearly, the Labour, Lib Dem and Indie Coaliton could never afford the increase otherwise we wouldn’t be in such a deficit now.  Whilst we would all want everyone in the public sector to be paid more, there are limits as to what can be done.

To clarify then, the reason Southend Council is in danger of potential bankruptcy, is because of this decision. 

The reason the capital budget had to be slashed was because of this.  The reason services will be getting cut is because of this.  And what’s worse, the people that benefitted from the pay rise are likely to see their extra money wiped out due to the  5% to 10% increases in council tax, council fees and charges, parking charges, and so on, that the coalition were forced to do.

The Tories mentioned ‘difficult decisions’ would have to be made, which sounds like services and capital investment will be cut somewhere.  Yet, instead of shedding jobs and costing people their living and depriving Southend of vital services, it may be prudent to consider adjusting people’s earnings until the budget balances - starting with the Directors of Southend.  Instead, at Full Council last night, Councillors have voted in favour of giving themselves a 4.5% pay increase.  Difficult decisions indeed!

Anger

Members of the Labour, Lib Dems and Indies were incensed at how their budget was being torn apart by the Tories, pointing towards extras that the Tories have spent such as the Bike Race, retaining the Jazz Centre and reversing the 6pm to 9pm seafront parking charges.  But all they do when they argue in this way is remind residents just how bad the budget was.

Ultimately, their leadership led to the ‘largest level of reported overspend since becoming a unitary authority.’

It is true to say the Tories have inherited a catastrophe.  Labour will argue that grants have been cut by the national Tories, but that is no excuse to break the boundaries of the money they had.

Labour spent £12m acquiring and fixing Victoria Shopping Centre.  Initially, I thought great idea, but it turns out they did not have a successful plan to attract businesses into the units.  Wilkos' recent departure, albeit out of their control, leaves a huge gap in revenues.  The plan now is to move the offices from the Civic Centre, which is essentially an acceptance that it is not going to work as a shopping centre - at least for the Council. This is aside the £10m they had earmarked for the doomed Seaway development.

Inherited Problems

Further problems the Tories have inherited are: the £2m loss in business rates; Fusion (who run Garons) have failed to pay any fees at all after agreement to pay half; the potential write-off of £8m in capital expenditure after the failure to find a partner for Queensway, the massive cost of agency staff whom many were on £300 per day, and the strange loss of £150K after no one would take up the contract to charge us to go to the toilet.   

Still, Labour et al, defended their record.

And they really did get angry when it was publicised that they were considering bringing in some kind of congestion charging akin to ULEZ.  They know how unanimously against most people are so they certainly didn’t want to be tarnished with that brush.  The Tory Portfolio Holder for Highways and Transport said the officers he was in a meeting with recently were looking to bring it in, and specifically as a revenue stream. 

What was really odd was when the Chairman of this meeting (who just so happened to be the former Portfolio Holder for Highways and Transport in the Labour, Lib Dem and Indie coalition) said “I would like to come clean”, and admitted that he’d seen proposals to bring it in.  In his own defence, he said that proposals do not mean policy.

I’m saying the Tories are necessarily going to do any better - who knows? but it is absolutely true that this Labour-led coalition was responsible for the problems that we have today.

The last problem they have (well, within this meeting) was that their own Tory party had stopped paying the hotel bills for Ukrainian refugees and so it was down to Southend Council to do it.

Hypocrisy

All in all, there is bitterness and vengefulness between the parties.  Outside this meeting, Labour have started a petition blaming the Tories for the 85,000/40,000 soil truck movements going down a different route that they had chosen, without highlighting that some of their own councillors, (alongside councillors from all parties) voted for the development in the first place!

They wanted to prove the Tories had failed to fulfil an election promise.

The hypocrisy is rife though, as I know firsthand that Labour failed to fulfil hardly any of their manifesto pledges - most, except increasing the living wage, the policy that created the £14m deficit that the Tories now need to clear up.