Sunday, October 11, 2009

Facts and Fiction in the Twilight Economy

Skimming through the comments on Thanet's other weblogs, such as From 'One End of Kent', 'Eastcliff Samantha' and the 'Thanet Star'; I never fail to wonder, at the 'Flat Earth' approach to the political and economic situation that we read in Thanet. Many people confuse Central Government, Thanet Council and Kent County Council budgets and responsibilities and wildly inaccurate, misleading or anecdotal figures may be presented as 'facts' and much like the good news coming from an embattled Gordon Brown, are somewhat distant from the truth.

It's a personal opinion but why so many people struggle to grasp the scale of the country's economic problems and indeed, forcefully deny them, I don't know. Britain now has close to £200 billion of public sector debt. We can claim the highest levels of personal debt of the developed economies and our public sector pension schemes are tottering on the edge of collapse, with a black hole threatening to swallow them by 2012. The money that you and I pay in Council tax barely covers the costs of essential services and for everything else, local councils rely heavily on central Government funding, which has, to all intents and purposes dried-up to a trickle; the Treasury instructing Local Authorities to sell their assets in a 'fire-sale' in order to try and plug the emergency funding gap. Once the car-parks and isolated empty spaces have gone, nobody really knows what will happen and many if not most local councils can no longer afford the maintenance burden of 'legacy' sites, buildings, parks and museums which lose money.

I warned you about 'facts' earlier but the other week, I roughly estimated from one set of figures, given in a presentation to local councillors, that every man, woman and child in Thanet receives, in terms of the total public service provision a figure close to £7,000 a year.

Britain is heavily reliant on revenues from the Scottish oilfields and the financial services economy. In fact, if you remove these and the city of London from the national economic equation we couldn't punch our weight in the G12 economies at all. The last twenty years has seen an enormously successful economy build-up around de-regulation and 'The Big Bang' to the point where we became over-dependent on a single sector; ignoring the decline and loss of manufacturing, research and more. Today, rather like the Rome of 2,000 years ago, we are principally consumers and export our language and customs, act as a global hub for financial transactions and watch helplessly while businesses move to the Pacific Rim or even the Irish Republic in search of new opportunities or a favourable tax regime.

Here in Thanet, as elsewhere in the country, every penny of public money is being scrutinised with an attention to detail which is possibly unprecedented in modern times. You've heard it from Gordon Brown and you've heard it from David Cameron and harsh fact #1 is there isn't enough to go around and maintain what the public have been comfortably used to for the last twenty years. In a deprived and highly leveraged benefits dependent environment like Thanet, the challenges for local Government are going be proportionally greater than elsewhere. So when people talk in terms of their council tax paying for x and y and z it only works when Central Government, like a generous uncle, make-up the difference each year. If that doesn't happen, local Government is no different to any working family with rising bills to pay and where the principal wage-earner is suddenly facing a dramatic cut in take-home pay, with no hope of an 'Ocean Finance' loan either!

This is where I suspect the differences between Labour and Conservative policies will polarize over the next five years. On a local level I suspect there are two quite distinct views. The first of these involves making every conceivable effort to balance essential public services, as many as possible with this much reduced income, much like any working family. The second argument says that the economy will slowly recover over the next five years and every possible effort should be made to make Thanet as attractive to business and tourism as possible, retaining sufficient economically viability to meet any upturn when it happens. This may mean of course, attempting to balance those same social priorities and demands as before but squeezing them even harder than many people would like, to leave enough of a reserve for some on-going investment in our collective future. The alternative is of course, is to arrive at the other end of this bleak economic tunnel in the same tough conditions as we entered it.

Much like the frank speaking you heard from the Conservative Party Conference last week, this involves the public's sense of what's important and what's not in terms of financial priorities for them and for local Government; i.e. some public toilets may have to be closed today but for purposes that may be for the greater good in protecting more critical service priorities now and in the future.

What do you think?

1 comment:

Anonymous said...

I agree with your analysis of the situation now and for the future, but the smell of cronyism which permeates the whole of Thanet's past makes it difficult to have faith in any future policies. Hackney council suffered from a similar illness, fired up by extreme politics, but turned it around eventually. Thanet council needs a clean out-then people might have more faith!