Social Media campaign launched to raise awareness of city budget challenge

Liverpool Town hall

Liverpool City Council has today (December 10) launched a social media campaign to raise awareness of the challenges it faces in balancing its budget.

The city faces its biggest budget challenge to date, with a total of £156m in savings needed in the next three years. This follows £173m cuts already made over the last three years. By 2016/17, the city will have seen government funding cut by 56%, in real terms, since 2010/11.

Budget 2

A series of ‘infographics’ – detailing the challenges the city faces, how it is allowed to spend its finances and where it currently spends its cash – have been developed for release on Twitter over the coming days and weeks.

The aim is to give residents a greater understanding of how the budget is pieced together and why the city has been particularly impacted by government spending cuts.

It follows the launch of the budget simulator last month – which has already had nearly 6,000 visitors and more than 1,000 people completing the budget.

Mayor of Liverpool, Joe Anderson, said: “We are facing some tough decisions in the year ahead, as we work hard to balance our books. That’s why it is more important than ever before our residents feel involved in and understand the decisions we are making.

“We launched the budget simulator last month to bring alive the very difficult decisions we are faced with to balance the books. Nearly 6,000 people have already visited the site and I would encourage everyone in the city to visit it to understand more about the scale of what we are facing.

“This is the next step we are taking to raise awareness. I hope by delivering this information in bite sized chunks on social media, residents will gain a greater understanding of why we are facing some really tough decisions.”

He added: “One of the ways we have been tackling the challenges is by investing in things which can generate an income for us – like our plans to buy the Cunard Building. By making innovative decisions like this – along with attracting new business to the city like H2 Energy and BAC Mono, bringing jobs and growth – we can generate additional cash which can be directly ploughed back into much needed, essential services for the people of Liverpool.

“It’s important that people in the city understand how this works, and this campaign will help us explain some very difficult concepts around how council finance works. People assume that because we are building schools and have money in reserves that we have a drawer full of cash which we can use to plug the gap. The truth is that Government imposes all sorts of restrictions on the spending of different pots of money which prevents us from doing this.”

To follow the progress of the campaign on Twitter, follow @lpoolcouncil

The budget simulator can be found at http://liverpoolcc.budgetsimulator.com/

FINANCE MYTHBUSTER

Why don’t you cut the number of staff and managers to save money?

The senior management team has been halved, saving £6 million per year. We have also reduced the size of our workforce by 1,600 through a voluntary severance scheme.

What are you doing to collect unpaid council tax?

Liverpool City Council’s Council Tax collection rate is as good as other large cities, at around 96 percent. However, unlike many other councils, we do not write off old arrears, which means that the amount of council tax debt that appears in the accounts is far higher than other councils. But any comparison is meaningless as they treat their debts differently and have written off any chance of recovering the money. Last year, the council brought in £8.5 million in historic council tax arrears and £381,000 of poll tax debt, which was then invested in services. This is money that the council would not otherwise have had.

Why don’t you dip into your reserves to cover the gap?

The city council has reserves of £115m, which will halve over the next three years as we pay bills such as legal claims and other committed future expenditure. Some of the reserves are held on behalf of other organisations, for example schools. Councils are not allowed to use reserves to plug holes in the budget as it is a one-off fix which just causes more problems in the future – once it is spent it is gone altogether.

You’ve recently announced that you’ve bought Everton FC’s training ground and the Cunard Building. How can you afford to do that?

The council is not allowed to borrow money to pay for day to say services, but can do so if it is an investment that generates a return, such as rental or lease income. The revenue stream can then be ploughed back into providing essential services. The council will only invest in schemes when it is confident it will generate a return, and the risk is minimal.