Below is the text from a letter sent last month to the new Chancellor of the Exchequer, Alastair Darling MP asking that Southampton receives its fair share of government funding.
In the 2007-08 budget round, the government gave Southampton City Council £90.1m in grants - just 54.7 percent of the money it needs to serve the people of Southampton - equal to £403.20 per head. The rest has had to be made up from council tax.
Every year Southampton faces a severe financial squeeze as the government puts more obligations on us than it pays for in its grants. This means our council tax is pushed up and we are forced to identify millions of pounds in savings in every budget. In comparison, northern authorities receive considerably higher settlements than southern authorities such as Southampton.
This year we are planning for a zero percent increase in government grant. We may in fact get less. If inflation goes up again inline with the current trends our wage bill could increase by £2m. The grants will not. As Chancellor you cannot continue to put this pressure on local authorities, while expecting us to deliver safer communities, better transport networks and higher standards of education.
In essence it is a stealth tax. Increased public spending driven by the government is being engineered through council tax increases. As well as highlighting the unfair pressure upon the tax payer I call for you to look again at how local government grants are calculated.
As well as cutting our funding year on year, the government is also not taking into consideration our rapidly increasing population. Between 2003/04 and 2007/08 we estimate between 10,000 and 12,000 migrant workers have moved to the city. However, Southampton’s official population, which the government uses to calculate our grants, has only increased by 6,000 residents in the same period. That is up to 6,000 people who we are providing services for without adequate funding.
I estimate that just these two issues - inflation and inaccurate population calculations - are costing the city council, and ultimately the tax payer around £5m a year. This would be equivalent to a seven percent increase in the council tax bill. With this sobering fact in mind, I urge you to give Southampton its fair share.
Cllr Jeremy Moulton