Council budget for 2020/21 maintains services for families and bridges the social gap

Sound financial management during the period of Government austerity has resulted in money being available to invest into services for families across Merton, after the council agreed its annual budget.

 The council’s business-like approach to long-term financial management has already seen it protect many services in recent years – such as libraries, where councils across the country have closed them down.

The council was recently praised by the national Local Government Association, which attributed good financial management as the reason the council is in the rare position of being able to invest in services despite annual funding reductions which have taken around 60% of its budget away.

Agreeing the council’s budget for next year, councillors signed off on: 

  • Nearly £4m a year extra for children’s services, helping protect and care for vulnerable children;
  • Almost £1m extra a year for the borough’s refuse service, including more to tackle growing scourge of fly-tipping;
  • £150k a year more for emergency planning, ahead of Grenfell Tower recommendations which will impact councils this year;
  • Disciplined financing includes £2.4m a year being saved on the cost of council pensions;

However, the effect of austerity and funding cuts is still a constant issue, meaning a balance has had to be found: 

  • A 1.99% council tax increase is still needed, plus 2% for the government’s “adult social care precept” in line with Government expectations.
  • £16m a year savings will be implemented by 2023, and a further gap of £9m a year still needs to be filled after that;
  • There is a huge shortfall in government funding for children with special needs – council has set aside a further £37m, but the cost could rise to £65m;

Overall, the budget is focused on making Merton a great place for families – with investment into family-orientated services during a year in which its new secondary school building will open, not long after the opening of a new leisure centre last year and a new library before that.

Council tax will rise in line with almost all other councils, with Merton’s element increasing by 1.99% from 1 April 2020, which is below increase in the cost of living (RPI inflation rate in January was 2.7%).

Merton will also collect an additional 2% for the government’s adult social care precept, which will be spent on services for older people or those with disabilities.

There have been complaints, however, about the level of financial uncertainty facing the council as a result of government decisions. Funding from the government has only been secured for one year, and no decision has been made on how much of the government’s income from Business Rates will be given back to the council from 2021 onwards.

The council still does not know if it will be reimbursed by the government for the full cost of providing education to children with special needs, and has set aside a further £37m in case it is not paid, although the full cost could be more than £65m.

Supporting the budget, the Deputy Leader of the Council and Cabinet Member for Finance, Cllr Mark Allison said: “Since 2010, our aim has been to make Merton a great place for families, but thanks to austerity and cuts to the grants we receive it hasn’t been easy.’’

“That’s why we have sought to run Merton’s finances in a disciplined and business like way. Nowadays we budget for the medium-term over four years rather than just one, and that has helped us to plan ahead.  As a result, we’re able to deliver better services.

“We’ve already opened a new leisure centre, and our new school’s buildings will be open in September. Now we’re able to provide an extra £5 million for children’s services over the medium term financial strategy, at a time when, thanks to our decisions, Merton’s state schools are achieving their best ever results – in the top three in the country. And that’s on top of keeping all our libraries running, and even opening a new one in Colliers Wood.

“We’re not out of the woods yet though, and there is even more uncertainty than usual. We’re having to set aside an additional £37 million to educate children with disabilities and special needs, something it’s actually government’s responsibility to pay for. If they did the decent thing we could do so much more.’’

“We’ve budgeted nearly an extra million pounds for the street cleaning and refuse service, including more to tackle the growing scourge of fly-tipping. But if the government treated us right, we would be able to do so much more to help us ensure our community remains a great place.”