Report from Newport Ward District Councillors Neil Hargreaves and Anthony Gerard.
Currently UDC is well funded because it receives the New Homes Bonus (NHB) of £8,000 per house completed in the district. Its gross annual expenditure is £35m, but internal income such as council house rents and charges, such as parking, brings the net external funding need to £12m. Of this, council tax brings in only around £5m. The rest is funded from the NHB, about £4m, business rates £2.5m, with other grants and movement in reserves making up the remaining £0.5m
However the government is ending the New Homes Bonus and has stopped the rate support grant. It has also failed to deliver its promise made to the last Conservative Party conference to allow councils to keep all of business rates. The UDC finance officer has planned on the basis that there will be no more business rates than currently received. So there will be a £4m hole in the council’s annual budget.
UDC holds significant cash balances (validly) on which it gets very poor interest. It can also borrow from the Public Works Loan Board and other lenders at very low interest rates. So it has decided to invest £45m in a commercial venture to secure an income to fill part of the funding gap. It set up a company called Aspire (the logo is now on UDC vans) which is buying a 50% share in the Chesterford Research Park. This has existing tenants in the pharmaceutical business.
R4U supports the council in its efforts to mitigate funding cuts in order to maintain our services. However we have expressed concern that this is a very large concentration in one asset and in one business sector. Commercial property generally provides a stable income, but it is illiquid. If you need your cash back quickly you can’t have it. This was demonstrated after the Brexit vote when commercial property funds were immediately devalued by their managers and were frozen – investors could neither buy nor sell. This risk to tax payers’ funds is illustrated by UDC having to provide a guarantee allowing the lenders, should there be a problem with Aspire, to ignore the property assets and come straight to UDC for reimbursement. Advice was taken and it may be most unlikely the guarantee would be called on, but the existence of this type of guarantee means the lenders consider it a possibility. The council also has £31m of long term liabilities for the deficit in the pension scheme.
UDC may be offered a further share in the Research Park and may intend to make other commercial investments. At the Council meeting in May following the public announcement, R4U requested that UDC consider appointing an investment committee of external experts to advise on any future investments. The Conservatives and Lib-Dems voted unanimously not to take this advice.
The council recently had to withdraw all ten of its 32 tonne bin lorries. A structural fault was found on one during routine maintenance. All the other vehicles were inspected and the same fault found. The manufacturer has taken responsibility and sourced temporary replacement smaller vehicles while repairs are done. This meant rounds having to be altered. The ten lorries were bought at the same time and only a small number of these vehicles exist in the UK. UDC has now changed its policy and will replace them on a rolling basis despite this being more costly. The object of course being to reduce the risk of all the vehicles getting the same faults at the same time. An example of why it is not a good idea to put all your eggs in one basket
More Committee Seats
Every May the council takes the opportunity to readjust memberships of committees and working groups. Seats on committees are allocated to parties according to how many councillors they have, so there was a need to adjust for the R4U by-election wins in Elsenham & Henham, and our new councillor for the Newport ward, Anthony Gerard. R4U has three seats on each committee. Anthony is on Licensing and Environmental Health, and is a substitute on the Planning Committee. Substitutes must have the same training as full committee members and Ant has already been attending planning meetings in preparation. I remain on the Standards committee and Governance, Audit & Performance, which among many other things monitors the efficiency of bin collections
Anthony Gerard are available every Thursday morning from 10.30 to 11.30 in Dorrington’s in Newport, and we take it in turns to attend the parish council meetings, which are the second Wednesday in the month (except 7th June 2017) at 7.30 in the village hall
Uttlesford District Council