Council accused of painting overly bleak picture of financial future

JPCT 050412 New Saxon Weald housing scheme in New road, Horsham. Photo by Derek Martin
JPCT 050412 New Saxon Weald housing scheme in New road, Horsham. Photo by Derek Martin

The opposition leader of Horsham District Council urged members not to ‘exaggerate’ the council’s financial prospects as they agreed a medium term strategy last night (Wednesday).

Following several press releases on HDC’s financial position, the Conservative majority has come under criticism from David Holmes, leader of the Horsham Liberal Democrats, for being too negative with the public over the true picture of council finances.

He says the council is being “pessimistic in every direction” about the future and that the council has not had a 28 per cent cut in Government funding as it continues to claim.

Since 2011/12, for each new home which is built or empty home brought back into use, HDC receives the New Home Bonus (NHB).

This is 80 per cent of a year’s council tax every year for six years and West Sussex County Council receives the remaining 20 per cent. For each affordable home, councils receive an extra £350 a year for six years.

Based on 285 homes added to the housing stock in October 2011, HDC received £378,803 in 2011/12 and will receive £769,382 for 2012/13 and £1,119,387 in 2013/14.

These figures do not include NHB for any homes built after October 2012 or for any which have planning permission.

In the Medium Term Financial Strategy Report presented to the council last night by director of corporate resources Katharine Eberhart, she assumes there will be no increase in the NHB after April 2014.

Resident Paul Kornycky drew attention to this in a question before members received Ms Eberhart’s presentation. He said: “As proposed it seems quite correct to include the full amount of New Homes Bonus in the revenue budget for 2013/14 as much of it is already being top-sliced from the formula grant.

“However, I do not understand why the amounts for the following two years are apparently being projected at exactly the same value.

“For this to be true the total housing stock in the Horsham district would be static after October 2012, i.e. no more homes as from now.

“It seems totally untenable to see houses being built today which are not apparently being acknowledged in these projections.

“Yes, do make them on cautious figures, but please also ensure that the figures themselves are inherently fair and credible.”

Before the meeting Dr Holmes (Horsham Park) had said: “Not allowing for future NHB is not wrong in isolation, but my concern is that they are being pessimistic in every single direction. The council has to respond responsibly to the financial situation but must be objective.”

Last night he urged members: “We must not exaggerate the financial situation. An exaggerated situation must not be used as an excuse for cutting the good things this council does in favour of a belief that the public sector should be kept small and instead things should be done by the private sector, the voluntary sector or even not be done at all.

“Paragraph 5.3 [of the council report] refers to a reduction over two years of £1.5m, the 28 per cent cut much mentioned by this council in press releases.

“In reality the reduction has only been £352,000 (£1.527m less £769,000 NHB and £406,000 Freeze Grant).”

Andrew Baldwin and Jim Rae (both Con, Holbrook East) commended Ms Eberhart’s work on the report and said the council was not being pessimistic about the ecomonic climate.

In an interview with the County Times before the meeting Ms Eberhart said she was not prepared to present a report based on funds which were not guaranteed.