This is the archive of 2023 District Matters (January to March), a column penned by the Leader of Stratford-on-Avon District Council, Councillor Tony Jefferson.
We are now some seven months into the 123+ waste collection system and the results are looking really good. We are currently 13th out of 360 local authorities in the English league table of recycling according to the data from Lets Recycle. Falling residual waste figures mean that less is going to landfill. Our figures are well below the target set by Government. It is worth stressing that any waste sent to landfill that rots produces methane, a very powerful greenhouse gas. So, we are making a significant contribution to achieving ‘net zero'.
Greater numbers of residents are using food caddies which reduces waste going to landfill. Many people were sceptical about the introduction of the food waste collection service, but we anticipated the Government making it mandatory. This is exactly what it has now done - it will be mandatory by 2025. Our anticipation of what was blindingly obvious has put us ahead of most other authorities. I suspect that, as most authorities will now have to introduce the service in a very short window, it will cost them more than it has cost us because we were early adopters.
This willingness to think strategically also applies to our decision to collaborate with seven other authorities, in investment in the world class material recycling facility. The total cost of this is about £60million; our share is about £8 million. This will start operation in June/July and be fully operational in September. Because it is state of the art, the recyclate at the end of the process is cleaner and of higher quality. This means that we receive a premium price which translates into a lower cost for the District Council.
This clearly demonstrates the big advantage of thinking strategically and being prepared to take bold decisions. These two decisions combined give us a ‘future proofed' waste service that is very cost effective and makes a significant contribution to ‘net zero'. These two decisions will together lever three benefits; that's the effective way to do things.
Regular readers will know that one of my frequent comments is about the extremely poor performance of the UK economy over the past 15 years. Rather than sit around waiting for ‘someone to do something', we have taken initiatives locally. Together with the CWLEP Growth Hub and the University of Warwick, on 17 February we held a ‘Driving Innovation and Growth Summit' at the newly named University of Warwick Innovation Campus Stratford-upon-Avon. The time and effort we have spent building close working relationships with both organisations is paying off.
We invited 80 people of whom more than 60 attended. It was an excellent half day with presentations from three local innovative and growth companies:
There were then three breakout sessions addressing the most pressing issues facing companies that want to grow:
The scaling up session led by Irene Graham, CEO of the ScaleUp Institute, was fascinating. Scale ups are defined as those businesses growing around 20% p.a. in turnover and employing more than 10 people. There are about 140 scale ups in the SDC area. So, we offer a thriving scale up opportunity, and to fully capitalise on it we need to do more. Critical will be:
There were two specific actions for the District Council arising out of the Innovation and Growth Summit:
We are very committed to these actions and will continue to work closely with the University and the Growth Hub to deliver what is required.
It is fair to say that the event exceeded our expectations. It demonstrates what can be achieved if people are prepared to commit to doing things, fully use the networks we have developed and to work hard to make things a success.
Our first priority is to focus on scale ups, using the knowledge and expertise of the ScaleUp Institute.
We have tremendous opportunities in our District. We need to capitalise on them fully to ensure that, regardless of the challenges our country faces, we remain thriving and prosperous for the long term.
It appears that we ‘dodged a bullet' this winter. It has been relatively mild and windy, so, although National Grid put coal fired power stations on standby, the lights stayed on. As more electricity is generated by renewables particularly wind, the variability of generation becomes a much more significant issue. Interestingly, the Met Office is now exploring the risk of ‘wind droughts' (reported in The Economist 11 February 2023). Such an event could have a catastrophic impact on supply. It reinforces my view that there will be no easy or cheap solutions to the issue of energy security.
There was some very interesting information on demographics in the Economic Impact Group I attended on 2 February 2023. The implications of baby booms in the late 1940's to the 1960's are now beginning to be felt. In the late 1940's, there was a very short and sharp baby boom, peaking at just under 900,000 births in 1947. These people are now in their mid-70's and are beginning to increase the pressure on the NHS and social care.
The baby boom in the late 1950's and early 1960's was much greater. The leading edge of this boom is approaching their mid-60's. These people are now beginning to leave the workforce in significant numbers.
Where this really begins to matter is in the impact on employment and, therefore, on inflation. One of the main concerns of the Bank of England rate setters is the impact of labour shortages on pay settlements. The demographic drivers will, I think, make it difficult to reduce the level of wage settlements. This means that inflation may be much ‘stickier'. In other words, inflation will be higher for longer than a lot of people expect. Interest rates may have to go higher and stay there longer than many expect. This will cause a shock as people are forced to adjust their expectations radically.
There is still some remarkably simplistic thinking amongst too many people that, whatever happens, the Government can ‘ride to the rescue'. I keep pointing out that this simply isn't going to be the case. The ill-fated premiership of Liz Truss brought that home with a vengeance. It will make no difference which party forms the government; the very real constraints remain.
Meanwhile, we have recently seen a tangible manifestation of the constraints imposed on Government. In ‘Levelling Up Round 2', some 111 projects were funded at a total value of £2.1 billion. Of the 111 projects, 62 were funded in Category 1 areas, the priority areas; 29 were funded in Category 2 areas. We in Stratford District are in a Category 2 area. There were 529 applications for funding which means just over 1 in 5 were successful overall. Excluding Category 1 areas, the success rate was much lower.
So, we have to be realistic. We have to accept our chances of success are limited. Perhaps we need even to ask ourselves whether devoting time and resources to bidding is worthwhile.
Closer to home, at the Cabinet Meeting on 6 February we allocated the available Community Infrastructure Levy funds. Funding was sought for 35 projects with a total cost of £44.2 million. We allocated the money available, £2.7 million, to 10 projects.
The clear conclusion is that there simply isn't enough money to do everything, no matter how worthy the cause.
Meanwhile, rather than expect central government to do everything for us, we are busy shaping our own destiny. This is clear from the Cabinet decisions on 6 February where we agreed:
We also received an update on the work to secure the future of Wellesbourne Airfield.
Put these together with the South Warwickshire Local Plan currently out for consultation and we have laid strong foundations for the future prosperity and opportunity in our District. It has taken a lot of time, energy, effort and persistence to get to this point. We have, however, only laid the foundations. A lot more effort and energy will be needed to realise the full potential of these foundations.
Far too many people appear to expect ‘someone to do something', usually central government. They put their time and effort into whingeing and whining liberally about things they cannot do. I think it is far better that the District Council focuses on the issues that can be tackled and the things that can be done, rather than succumbing to a sense of powerlessness and dependency that results in inertia. I'll leave that to others.
It's 2023 already and as usual the first item on the agenda is the budget. Once again, we have only had a detailed settlement with numbers for one year. Although there are indications of the shape of the settlement in following years it would, I think, be unwise to 'count one's chickens', when there are very realistic estimates that the Government will need to borrow a mere £1.2 trillion over the next five years.
Although we have had a better settlement than we were anticipating, we can only remain within our minimum general fund reserve balance of £3 million in the final year of the Medium-Term Financial Strategy (MTFS) in 2027/28 by using reserves. The General Reserve will be reduced from £10.3 million in 2022/23 to £3.04 million in 2027/28 and we will have drawn on a further £2.8 million of earmarked reserves.
This means, I think, that some very difficult decisions will need to be made by the time of the MTFS commencing in 2024/25. It's not that far away.
Not every local Council in the country is in as relatively strong position as we are. Indeed, there is one Council that has reported debts of £650 million. Quite how they arrived in that position, I find difficult to comprehend. In part, I suspect, it is the result of decisions based on ultra-low interest rates when borrowing was cheap. In part, I suspect, it was the result of a lack of grasping the strategic reality of the cost of that much debt. In part, a far too optimistic a view of the returns that would receive on their investments coupled with a lack of realism in understanding the risks to which they were exposing their residents.
Having to manage that level of debt has very real implications for residents. Not least that the council will now be run by government appointed commissioners tasked with restoring financial soundness. What this means for residents is that the following actions will inevitably have to be taken:
The illustration to which I have referred is not the only Council in financial difficulties. There appears to be a steadily increasing number. In my view, this demonstrates very clearly the need for a high level of competence in councillors, coupled with a capability to undertake very careful risk assessments and to understand their Council's strategic position. There is too much short-term thinking and 'kicking the can down the road'. There also needs to be a clear understanding of the reality that resources are limited and massive borrowing to avoid taking difficult decisions usually results in a worse outcome.
It is stating the blindingly obvious that our residents will face a challenging time. Not only is the cost-of-living crisis biting everyone but, because it is food and energy prices that are increasing the most, it will bear most heavily on the poorer members of our society. As Stratford District has a population skewed to the elderly with over 25% of our population 65 or older, this cohort will also be heavily impacted by the crisis in the health care and social care systems. I fear that there will be no quick, easy or low-cost solutions. Given the scale of these issues, there is in reality not much a District Council can do to solve these problems.
As if this were not enough, higher interest rates have made buying a house unattainable for an increasing number of people. Those who have taken out mortgages in the last few years are likely to find finances stretched as they re-mortgage. Housebuilders are already seeing a marked reduction in sales which, given the level of housebuilding locally, will have a negative impact on both our local and the UK's economy.
The hospitality and tourism industry has been hard hit over the past two years. At the last WMCA Economic Impact Group I attended, it was reported that in Birmingham about 50% of hospitality businesses would struggle to pay their bills in the New Year.
In short, as a District Council, we face a list of massive and interconnected challenges. Indeed, Government at every level faces massive challenges without sufficient money, resources or arguably the capability to deal with them all. It really is going to be a time when competence, clear strategic thinking and a willingness to take tough decisions, including saying 'no' far more often, will be the order of the day both locally and nationally. This is not a time for simplistic, quick fix solutions or undeliverable promises peddled by the naïve and the gullible.
I don't think many people are prepared for this reality.
The Chinese curse 'may you live in interesting times' is applicable. We certainly do.