MPs

House of Commons

LONDON

SW1A 0AA

You will no doubt have read in the press about the problems Dudley, and many other Local Authorities, are having in producing a balanced budget for the coming financial year. I believe it is necessary for you to understand how these problems have arisen and so be able to put pressure on your Government to help.

I will begin with the Government assessment of our need to spend as represented by the Revenue Support Grant. Having made this assessment the Government then penalises us to the tune of £5.6M by reducing the grant paid to Dudley. This alone represents a 5% increase in Council Tax for your residents.

The Supporting People Programme has assessed the need in Dudley to be £9.3M, a Government assessment, but the Government has decided to reduce this assessment and only give Dudley £6.5M. This is unfair to the residents of Dudley who would benefit from this Programme.

Over recent years the grant for spending on principal road maintenance has been reduced by £1M, but we cannot afford to take this level of reductions as the roads continue to wear out.

While we have been very active in the area of recycling we are now suffering from a major decline in income as the selling price of recyclates has plummeted. The actual cost to our budget is difficult to ascertain at the moment but we have received no help from the Government to plug the income gap.

Every householder knows how the cost of energy has escalated in the last 12 months. This also affects the Council and you will have seen in the press that just on street lighting our costs have risen from £1M to £1.5M and no help from Government to plug the gap.

You will have seen how house sales and industrial/commercial building has slumped in the last 6 months. This trend is reflected in our income from Planning and Building Regulations fees which are 18% down over that period and are not expected to return to the previous level in the next 12 months.

The Government sets the Land Charges fees for personal searches. Unfortunately the Government’s lack of action in keeping these fees up to date will cost the Council at least £200K pa.

Health and Safety legislation in areas of water, asbestos and electrical are being made ever more stringent and costing the Council at least an additional £600K pa; once again totally unreflected in RSG.

With rising numbers of redundancies and short term working we are experiencing increases in the demand for services. In housing benefits, at the same time as the Government has introduced a 5% reduction in benefits administration subsidy, we are experiencing a 3% increase of claims from the private sector tenants. So we are experiencing a cut in Government subsidy at the same time as an increase in demand. A similar pattern is emerging with homelessness with a sharp rise of over 20% compared to 12 months ago.

While many will welcome the recent cuts in interest rates, this is a double edged sword for Local Authorities who traditionally borrow long term but lend short term. These interest rate cuts are estimated to cost Dudley an income reduction in excess of £1M in a full year and again with no Government help.

The Academy programme was originally funded outside local government. The Government has now changed the rules and Dudley is faced with costs of up to £2M to introduce 2 Academies; once again a hidden cost with no Government support.

Last year I made the point to you that we will soon lose the last of our Neighbourhood Renewal Funding which has been replaced nationally by the Working Neighbourhoods Fund. Unfortunately in this change the Government excluded Dudley; we now find that Sandwell attracts £9.7M, Walsall attracts £6.4M and Wolverhampton attracts £7.3M, but not a penny for Dudley.

Like all other local Councils we are facing the consequences of increased dementia in the elderly and adults with learning difficulties without a rise in Government support.

The Government has revised the rules on Food Hygiene Regulations requiring us to inspect a further 220 premises but failed to increase the RSG to reflect the additional costs.

The Government transferred the dog control service to local government from the police but did not simultaneously transfer the grant and we have been left to supply the service without the grant.

The Council recognises the importance of delivering efficient services and the need to re-direct resources from cash efficiencies to supporting spending pressures. We have reduced spending by making budget savings over the last five years of over £10M and, in the last three years of CSRO4 during the Gershon process, have exceeded our Gershon targets by £6.9M and plan to meet the Government’s new 3% target in 2008/9, but this isn’t sustainable in the medium to long term.

All of the above place a significant financial burden on the Council and the Council taxpayers of the borough. I hope that collectively and individually you will ensure that these pressures are brought to the attention of the relevant Ministers and that, if nothing else, a decision is made to pay our RSG in full in accordance with Government assessment of our need to spend.

I look forward to hearing from you.

Yours sincerely,

Cllr David Caunt

Leader of the Council