Council in bid to save £1m

10:40am Friday 10th October 2008

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Voluntary groups face closure after a decision by Craven District Council to withdraw funding.

Groups including Craven Voluntary Action and Hellifield Village Well had been relying on a slice of £67,000 extra funding.

But despite attempts by some councillors on Tuesday to press ahead with that, most voted to withdraw the money.

The council meeting also agreed to cancel other projects, totalling £710,000, including £95,000 for the delivery of broadband access across Craven and £315,000 for recycling.

It also agreed to set up a team of officers to look into ways of saving £1 million for at least the next year.

Councillors heard that instead of a predicted £500,000 underspend, the council had overspent by £792,000 – leaving it with a £1.3 million shortfall.

Interim chief executive Brian Dinsdale said the financial problems were due to insufficient control of the budget and the credit crunch.

He said the council’s income was falling after a decrease in car parking income and land searches because of the declining property market.

“There was an inadequate level of financial control last year. Reports were not put to members throughout the year on the level of spending,” he said.

“The council is now faced with a number of problems and, not least, the credit restrictions. Our costs are also rising.”

Mr Dinsdale said the council would be able to cope this year, as it could use reserves, but next year it would be about £1.4 million down if it continued to spend at current levels.

“My recommendation is that gap is filled to the tune of £1 million next year and there will also be a further gap in the following year.”

Representatives of Craven voluntary groups urged members against withdrawing funding and warned of dire consequences.

Milton Pearson, from South Craven Community Action, said now was not the time to cut funds to the voluntary sector.

And he predicted the cost to the council would be more because groups would not be able to help the most vulnerable.

Sylvia Merrett, manager of Hellifield Village Well, said the delay over council funding had meant the withdrawal of the promise of other funding and the imminent closure of the charity.

Many councillors argued strongly for grants to be maintained, with an amendment for scaling them down narrowly defeated. An amendment calling for £60,000 for community transport to remain was also lost.

Councillors eventually agreed to suspend £710,000 spending and to make £1 million savings, with the addition of an amendment by Coun Carl Lis that the council prioritise grant funding once it gets on top of its finances.

Council leader Coun Chris Knowles-Fitton, who is also chairman of Craven Domestic Violence Service, said the council faced difficult times and would have to make cuts – however painful.

He said: “Nobody has a greater respect and admiration of the voluntary sector than I do and I’ve had to think long and hard about these recommendations.”

But he said there was no point promising money when it was not there and that it was foolhardy of community groups to rely on money before it had been fully agreed.

“If the applicants have been spending money they were not awarded, it was not a very responsible thing to do.

“At this stage we can’t accept anything other than suspension. If, in three months, things are not as bad as we thought, then we can re-visit it at that time,” he said.

Coun Robert Heseltine suggested maintaining the grants, but at a reduced amount. He said he supported suspending other expenditure, but not community grants, which he felt would hit the most needy.

“I would propose re-visiting the grants to voluntary organisations and maybe we can get it down to £40,000 to £45,000.”

Coun Polly English said the council should look elsewhere for cuts. “I am ashamed to be a member of this council,” she said. “I just can’t believe we can take this money away when it has been agreed.”

But Coun David Crawford said the £67,000 was additional funding, separate from around £70,000 already given to community groups.

“This was a growth item; the existing grants have been paid,” he said.

And Coun Helen Firth, chairman of the overview and scrutiny committee, which had recommended the additional grant, said: “I would like to support Robert Heseltine’s amendment, but I don’t think that would be being realistic.”

Coun Paul Whitaker said: “We must not go into denial; somewhere we have got to save money. Even if we ask tax payers next year for another five per cent, the money will still not be there.”

After the meeting, Coun Knowles-Fitton said: “There is no denying that the council faces a difficult time, especially in the light of the economic climate.

“Our current financial situation means we will not be embarking on ambitious new projects next year and possibly for the year after while we take sensible steps to make savings and concentrate on maintaining current services.

“We are in the process of rationalising next year’s corporate plan so we can deliver within our budget constraints.

“Many councils will be finding themselves in similar situations in the forthcoming months and I hope that, by introducing these improvements now, we will be able to make Craven a more efficient, streamlined and focused authority that works to improve the quality of life for Craven residents.”

A meeting of Craven voluntary groups is due to take place on Monday when cuts in services are expected to be discussed.