UPDATED: The Island’s MP, Andrew Turner, has raised the financial crisis the Isle of Wight finds itself in during Prime Minster’s questions in the House of Commons this afternoon (Wednesday).
Speaking about the Isle of Wight Council’s challenge not only this year but in the years to come, Mr Turner said:
“The Isle of Wight council can balance the books this year, but fear they will be unable to do so next year.
Article continues below this advertisement “Would my Right Honourable friend confirm the Government is willingness to work with them over coming months to help them access existing sources of finance, or find new ways to address the Island’s unique circumstance?”
Prime Minster David Cameron responded by saying:
“We are very happy to work with the authorities on the Isle of Wight. I think I’m right in saying that when it comes to spending power, actually the spending power is increasing slightly in the next year – but what we are doing with this settlement for Local Government is because overall it’s a relatively flat cash settlement over the five year period, we’re allowing council to use their Reserves and also to sell unwanted property and use that money directly to provide services to bridge over the period of the next five years.
“We’re very happy to look at the circumstance of the Isle of Wight, but I believe this is a fair settlement”.
A video of the exchange in the House of Commons can be found at https://parliamentlive.tv/event/index/a8519088-8f4c-4b92-90ab-5bebaf6099e9?in=12:23:57&out=12:25:05.
UPDATE FRIDAY: The Isle of Wight Council has today said it is grateful to MP Andrew Turner for raising the issue of the council’s finances and the potential effects of the draft financial settlement on the Island.
In welcoming the undertaking to work with the council, the council is disappointed that the Prime Minister asserted that the settlement is fair in his view. The council contests this view, given the disproportionate impact it has on authorities providing adult and children’s services and the flawed reliance on the concept of Spending Power as justification.
The council’s Leader, Councillor Jonathan Bacon, wrote to the Prime Minister and other senior ministers at the end of January and pointed out that the Government’s ‘Spending Power’ calculation fails to take account of increased costs that the council faces in the years covered by the draft settlement. These costs include the effect of the national living wage (£7.2m), adult social care need and inflation (£9.2m) as well as other increased general costs (10.2m). While there is an increase in income projected of £20.8m, this is assumed by government to come from a 3.75% increase in council tax and from a growth in business rates. This all has to be balanced against the increased costs of £25.6m and the grant losses proposed of £25.6m, meaning that the net result for the Council is a loss of £31.4m over the period of the settlement. The councils operating budget is £124m and the statutory services that have to be provided cost in the region of £106m, so the Government’s figures actually take the authority below a level of income where it can operate those essential services.
As such the proposed settlement, in the council’s view, is not fair and its terms need to change if the Isle of Wight Council is even to be able to provide statutory services in the future. It is expected that the government will be making a final decision about the settlement next week, so it is to be hoped that these points are taken into account by then.
Councillor Jonathan Bacon, Leader of the Isle of Wight Council, said:
“While I was pleased that the financial situation of the Isle of Wight Council was raised by our MP at Prime Minister’s Question time this week, it is very disappointing that the Prime Minister has either not read or has chosen to ignore the information provided to him, his fellow ministers and civil servants. We can only hope that this position will change by next week or the council will have to consider taking radical action to contest the government’s attitude to the Isle of Wight”
