HARD TIMES

Ken Maddock, Leader of Somerset County Council explains why his Conservative administration will have to tighten the purse strings for a while yet:

Every now and then I enjoy a pint at my local pub, The Greyhound. All the talk is of the recession. Times are tough. The news is bad. The era of plenty is over. A time of austerity is upon us. We are all having to tighten our belts. Somerset County Council is no exception. We are all in this together.

There are many reasons why things are so tough.

Of course we all know that the whole world has just experienced the biggest recession in living memory.

Nationally here in Britain, we know that Gordon Brown's government has messed up big time. Our country was the first into recession and looks like being the last out of it. The man who claimed to have abolished boom and bust got it spectacularly wrong. He has let us down. And now we must pay.

Then more locally here in Somerset, the Liberal Democrats who ran County Hall for the last sixteen years have more than doubled the council tax. And at the same time they ran up debts of over £350 million. That is around £2,000 for every hardworking family in the county. Not only was it the old Liberal Democrat maxim of 'tax & spend'. Suddenly there was a new dimension, it was 'tax, spend and borrow'. They did not seem to realise that when you are up to the limit on your credit card, it is time to start paying it off. But they just went on borrowing with no thought as to how or when it might be paid back. And to cap it all they went and blew £25 million speculating in Icelandic banks.

My mates in the pub are bewildered by all this. They have seen their Council Tax more than double in recent years with very little to show for it. Their council is in huge debt. And their nation is suffering from a spending binge such as none of us can ever remember seeing before. Local people are not to blame for it but they are having to pay for it.

So what are we to do? How can we help?

In fairness to taxpayers we cannot in all conscience sting them yet again with even higher taxes to tide us over. It would be easy to do. But it would be unfair. The County Council's share of Council Tax is over £1,000 for a band D property already. We think enough is enough. So we have decided to freeze the County's Council Tax for the coming year. That is only fair. We say it is time to put our customers first.

We cannot borrow our way out of our problems. That is the cause of much of the trouble in the first place. No, we are going to need to work our way out of this unhappy situation. And will be a long hard graft.

But meanwhile we must still balance the books. This is a real difficulty and it is going to mean making some tough calls. But we have to face up to it. So in the budget for the financial year starting in April, we intend to cut spending by over £40 million. This is more than the council has ever reduced its budget by in the past. It is not welcome. But it is necessary and it is just a one year budget as the financial future is so uncertain.

There will be more tough decisions next year. We will have to be much more realistic and businesslike in everything we do from now on. We must try to spend every pound wisely and be more aware of costs throughout the council.

Some of the spending reductions will come from efficiency savings. For example we have reduced the cost of our road maintenance by £5 million a year by renegotiating the contract with our suppliers. This will mean we will get the same service for less money. It will save the council £25 million over five years. But some of the savings will have to be spent on repairing the extra potholes caused by the severe weather we have had recently.

We are also trying various other ways of reducing our costs, eg flexible working practices, reducing staff numbers, outsourcing some of our work to those who can do it more cheaply.

But much of the savings will have to come from cutting down on some of the things we have done in the past, or in some cases stopping doing things altogether. The 'nice to do' things can no longer be afforded.

This will be painful. I understand the difficulties that Somerset people face. We all have to share the pain. And it will take a long time. But we are making a start with this budget. It is going to mean difficulties for many of us. And I am truly sorry for that. But I know that this is the only responsible way back. More will be necessary in the future. But this is an important first step back on the road to reality. The council has been living on borrowed time and borrowed money for too long.

The road back is going to be tough. And it will not be a quick journey. But there is a better path. And we are determined to follow it. Today's budget announcement is an important step on the road back to sanity.

You may think that this is only common sense. You may think that it is the sort of problem that we all face in our personal lives trying to live off our wages day by day week by week. And you may think that the government should be doing something similar. Maybe Whitehall could learn a little bit from the Town Hall.

But one thing I do know. I can feel comfortable when I lift my pint at The Greyhound. I can look the regulars in the eye, knowing that I have done all I can for them in these troubling financial times.