By Cllr Peter Graham
The man who thinks he got Barack Obama elected was interviewed
in last week’s Chronicle. Stephen Cowan unveiled a string of Labour spending commitments, but completely failed to explain how he would pay for them.
He did announce a U-turn on extra
funding for the police, saying he would now simply “replicate the
current administration’s financial commitment”. And his “unequivocal no”
to selling expensive, council-owned street
properties would guarantee a big rise in rents for council tenants.
The rest of the interview, however, was a lengthy shopping list.
“When we say we will do something, we will do it,” he claimed. Borough residents had best hope he never gets the chance...
COWAN’S SPENDING COMMITMENTS
1.
“scrap homecare charges”
We have been
reluctant to follow Labour boroughs in charging, have frozen the
homecare charge and still have one of the most generous schemes in
London. If Cowan
scrapped all charges from 2014, it would cost over £400,000 annually.
Over the four years of the council term, the cumulative cost would be
£1.7 million.
Annual cost: £0.4 million
Total cost: £1.7 million
2.
“revise parking prices”
Revisions can
be upward, but it’s clear from the context that Cowan anticipates a
reduction in revenue. We have frozen parking charges and are well below
the London
average. If Labour were to cut all parking charges by 10% in their
first year, and freeze thereafter, the annual cost would be around £1.5
million. Over a term, that would cost £6 million.
Annual cost: £1.5 million
Total cost: £6 million
3.
“don’t need to penalise motorists with box junctions and cameras everywhere"
This isn’t a
commitment to remove every box junction and camera, but it implies a
significant proportion. Box junctions exist to stop congestion and
revenue is used
to make improvements. Nevertheless, assuming Labour removed two-thirds
of box junctions (with any additional junctions being offset by the loss
of cameras) that would create a shortfall of £4 million a year. The
total over four years would be £12 million.
Annual cost: £4 million
Total cost: £12 million
4.
“fund the ward budgets”
There are no
ward budgets at present, so this isn’t a straightforward calculation.
However, it’s clear that the budgets are intended to involve
discretionary, optional
spending. The panels will have a choice about what to spend money on
because they aren’t required to fund essential services. Cowan says he
will “provide money for it to happen” and says a ward might decide: “We want
extra police, another youth club, cleaner streets”. It would be
difficult for a ward to fund all three for less than £250,000. That
produces an annual cost of £4 million for all wards and a total of £16
million over the term.
Annual cost: £4 million
Total cost: £16 million
5.
“reinvest in youth services”
The Youth and Community
section of the Children’s Services budget includes children’s centres,
but Cowan is already committed to reversing changes made there, so it is
fair to take them together.
Net spending is up significantly because central government grants have
reduced. However, if Cowan’s plan is to restore peak 2010/11 gross
expenditure levels, it would cost around £7 million a year.
Annual cost: £7 million
Total cost: £28 million
6.
“cut council tax”
We have cut tax, on average,
by 3% each year. Cowan is on record saying he would cut it by much
more. Although no-one believes him, let’s take this seriously for a
moment and assume reductions
by Labour of 4% a year. That produces an ongoing loss of around 2.1
million for every reduction. If Labour reduced tax by more than the
Conservative average every year, that’s an annual loss of more than £8
million by the end of the term. The cumulative cost
across the four years would be at least £20 million.
Annual cost: £8 million
Total cost: £20 million
These are just the spending commitments from his interview, as others have been given at Council meetings.
TOTAL COST
The
Chronicle reports Cowan as thinking that all this can be paid for “by
eradicating what he says is more than £20million in unnecessary costs”.
The estimates above suggest an annual cost
of £25 million, not £20 million.
Cowan’s figures
Annual cost: £20 million
Reasonable estimate
Annual cost: £25 million
Total cost: £84 million
So he is already some £5 million adrift each year. But where would that £20 million actually come from?
PAID FOR BY?
There are
three policies in the Chronicle article that Cowan claims would save
money. Helpfully, we know exactly how much he thinks two of the three
will save, as
he provided figures on his own blog in 2011.
1.
"cutting millions spent on glossy leaflets and consultants fees”
Ignoring the facts and looking
exclusively at Cowan’s figures, he claims he will save “at least £1
million by getting rid of high paid consultants” and “at least £1.25
million by
cutting the council’s press office, shutting down the three glossy
council magazines and ending the council’s controversial propaganda
budget”. That’s a purported annual total of £2.25 million.
Cowan’s figures
Annual saving: £2.25 million
Total saving: £9 million
2.
“far too many officials employed on huge salaries”
In the same post on his 2011
blog, he claimed he would save “at least £600,000 by cutting council
directors, super tri-borough directors and assistant directors jobs”.
Ignoring reality
once again in favour of his figures, that provides an additional £0.6
million annually, and £2.4 million over the term.
Cowan’s figures
Annual saving: £0.6 million
Total saving: £2.4 million
3.
“Neighbourhood improvement panels will strip out costs”
This is a new claim, so it’s impossible to know
what figure Cowan has in mind. However, given it involves creating an
additional tier of decision-making for new, discretionary spending, it
is very difficult to see how any costs would be
removed. At best, officers would try to accommodate the extra workload
without adding to overheads.
Annual saving: £0 million
Total saving: £0 million
LABOUR’S £80 MILLION BLACK HOLE
Having identified those dubious savings of around £3 million, Cowan has a £17 million annual shortfall
on his own figures. That would mean borrowing £68 million and
taking the Council’s debt back up to near where Labour left it. Judged
against the estimates above, the annual shortfall would exceed £22
million. And because his savings aren’t, in reality,
credible...
Labour would need to borrow at least £80 million over four years, redoubling the debt.
Amusingly enough, one of Cowan’s many pledges in the Chronicle was to
“bring down debt”. The truth is that his Labour Group doesn’t have a clue.
“People will have to work out whether they trust us
or not,” he says. That isn’t much of a struggle for anyone who
remembers debt at £169 million and average Council Tax rises of 7.7 %
each year the last time he was in power.
“Importantly, when we say we will do something, we will do it and when we can’t, we will admit we can’t.”
My advice, Stephen? Fess up now.