Merton takes first step towards council tax freeze

Merton Council’s cabinet last night agreed a series of proposals in relation to the budget. Cabinet considered papers which took into account the decrease in government funding and complete loss of some grants, but also recognised the need to keep council tax at the same level as last year.

The proposals show that Merton has already found £10million worth of savings but that its budget gap has increased for 2011/12, consequently leaving a £13million budget gap still remaining.

At the beginning of this financial year Merton set a savings target of £14million to reach a balanced budget in 2011/12, but taking into account the current climate, impact of the Comprehensive Spending Review and loss of some grants, the gap has widened to approximately £23million. The gap over the coming four years up to 2014/15 is now approximately £70million, therefore difficult initial budget proposals for next year 2011/12 have had to be made.

Although just over £10million worth of savings have already been identified, Merton will face a number of very difficult decisions to ensure it can reach a balanced budget for next year. The council is facing a reduction of approximately 16% on its net spend of £150m from the general fund for 2011/12. This assumes an average 7.5% reduction in overall government grants; however, some grants such as school sports, Every Child a Reader and extended services, valuing almost £1million, have been cut completely.

With numerous central government departmental decisions yet to be made, the full extent of Merton’s financial position will not be known until these and the local government settlement figures are announced later this year in December. In the mean time Merton is continuing to review where it can make savings through efficiency measures and staff reductions so to limit the impact on front line services. Consultation with all the other parties and with the council’s Scrutiny panels will also play a crucial role in ensuring the situation is dealt with a joint and fair approach.

Councillor Mark Allison, Merton Council cabinet member for finance said:
” With such large government funding cuts it is inevitable that we are facing a number of difficult budgetary decisions over the coming four years. However, our aim at this stage is still to freeze council tax in 2011, because we think the cost of living is already high enough for Merton’s hard-pressed residents.

” It is impossible to say precisely how much funds will be cut for Merton’s local services, as there is still a lot of information and detail to come from the government. Unfortunately that does mean we will need to further reduce staff this year and in future, but we will try to ensure the services our residents need the most are protected as much as they can be.”