Your questions answered
Are you making cuts this year?
Yes. The Council has consulted on a range of proposed savings and is now looking to take a final decision on what ones to progress. After the consultation process, it has decided not to progress with some but will implement others.
What cuts are you not going ahead with?
There are 12 in total that have been rejected. They include options to introduce charging at the War Memorial Park for short-term parking, cuts to street cleaning services, cuts to funding to some voluntary sector organisations and reductions in the amount of Council Tax relief available to the most vulnerable.
What savings are you still intending to make?
There are five in total. One of the areas for savings will be the reduction of senior manager posts over the next two years that will save around £2m in total. There is also a proposal to reduce the cost of managing children’s social care by £2m. It is hoped these will be achieved through efficiency. The full list can be found in the report that will go to Full Council.
Why are you making cuts?
Coventry has been open and transparent for some time that nearly all local authorities – of different sizes and political colours – are facing unprecedented financial challenges due to long-term underfunding in the sector. In Coventry’s case, we have received about £100m less a year every year since 2010. Despite that massive loss, we have prudently managed our budget to ensure we meet our legal duty of setting a balanced budget every year. However, in recent years, the collective result of these severe cuts in funding, together with inflationary pressures and rising demand in services such as social care and homelessness, has brought this to a head, meaning we had to find savings of £30m during the current financial year and a further £8m for next year, 2025/26.
Why did you consult on making more saving proposals than you needed to?
We were committed to undertaking a genuine consultation where no decisions have been made in advance, so it was important to engage on a range of possible proposals to understand the strength of feeling and different views and give us some flexibility in the decisions we had to take. Additionally, at the time we have to go out to consult we have not been provided with the final information regarding our resources next year, so we have to ensure we provide sufficient flexibility until those figures are confirmed.
Did the Government give councils more money?
Yes. Coventry City Council has been lobbying for a number of years to highlight that funding for local authorities is both unfair and unsustainable. In Coventry’s case, we have lost funding of more than £100m in real terms every year since 2010, yet the city is more deprived than most others, and our population has risen significantly in that time. This has all happened while demand for our services was increasing, and the inflationary pressures to deliver them pushed the cost up for councils, just as it affects residents. In Coventry, 83% of our entire net budget is spent on three services – adult social care, children’s social care and housing and homelessness. That means we only have 17% of the remaining budget to spend on the hundreds of other services we deliver.
Thanks to our lobbying, Coventry did receive a better one-year funding settlement than last year, but unfortunately, it does not yet rebalance 14 years of under-funding, or the unfair basis on which it is shared out, meaning some savings are still needed. But it did give us a bit more headroom which means we can put more investment in some services for the first time in years.
How did this additional money affect your budget decisions?
It has given us more headroom in the savings decisions we have had to make. We have also been able to invest additional money in services such as maintaining and improving roads and footpaths, clearing up and preventing and prosecuting fly-tipping and improving community safety. Although the additional money is welcome, we will continue with our lobbying to ensure Coventry gets what it deserves.
Why don’t you use this additional money to turn streetlights back on overnight?
The Council has already announced its plan on turning streetlights that have been turned off overnight back on. The £10m investment will see all of the city’s streetlighting upgraded to the more cost and energy efficient LED lighting. Once installed, these lights will be dimmed overnight which will provide better quality of lighting than the dimmed traditional halogen lights we currently use. The reductions in cost in using these lights is such that they can stay on overnight and the reduction in cost means we continue to make the savings we currently achieve in switching them off. The move will also reduce our carbon footprint dramatically.
When will the lights be switched back on then?
The LED lights will be installed on a phased basis from September this year. The full roll-out programme will be announced in the coming months
All councils claim they do not have enough money, don’t they?
In Coventry’s, and similar authorities case it is true. Every year we have received £100m less a year in real terms than we did in 2010, but population and levels of demand have increased dramatically over the same period. We are well below the national average of funding per head of the population. To put it another way, if we received the national average Coventry would receive an additional £17m a year. That would mean no need for any further savings or cuts, and we could invest in new or existing services instead.
You say that more than 80% of your net budget goes on social care for adults and children as well as housing and homelessness. Why is more of your funding going on these three areas? Is it fair that most of our council tax goes on things people don’t use?
These three areas come under our statutory duties – which means that there are elements of these services that we are required to provide by law. They are services we would all hope would be there if we needed them. Coventry, like all councils, provide hundreds of services from the cradle to the grave but fortunately, for the majority of people, they may not need them or be aware of them and may only rely on widely recognised council services such as bin collections, street-cleaning and grass cutting.
You put up Council Tax every year, so any reduction in funding has been offset by those increases, hasn’t it?
Since 2010, we’ve lost about £100m per year in government funding. In comparison, a 1% increase in Council Tax approximately means a £1.7m monetary increase for the Council. Legally we can only raise Council Tax by 2.99% (not including a 2% social care precept). As this demonstrates, the Council Tax increase, while necessary, is barely scratching the surface of our funding issue. Ideally, we do not want to raise Council Tax. We’d prefer our core government funding be increased which is why we continue to engage with Government to find a long-term solution to this funding issue.
I was told that Coventry has about £20m outstanding in unpaid Council Tax. Why don’t you concentrate more on recouping that?
We are. We are acutely aware that the Council serves some of the most disadvantaged areas in the country and nearly everyone has been negatively affected by the cost-of-living crisis and high inflation that has compounded the problems we all face. This has seen people fall behind with payments across the country, but the Council is doing all it can to ensure that money owed is paid to us, even if it takes a little longer.
You talk a lot about demand being a cause of financial challenges along with underfunding. Demand will come and go, won’t it?
Unfortunately, over the last 14 years, the evidence does not suggest that demand comes and goes – the trend is that demand has continually increased over this period. In 2010 for example, about 50% of our net budget was spent on children’s social care, adult social care and homelessness, but today it is over 80%.
Population growth in recent years has been led by students and migration. Don’t we need to have less of both?
The Council is proud of Coventry’s two universities and the financial and regeneration benefits they bring. Similarly, we are proud of our history as a City of Sanctuary and a designated place of Peace and Reconciliation. We have welcomed those fleeing persecution from conflict, providing support to enable individuals to make a positive contribution to the social, civic and economic fabric of our city. We have raised concerns nationally of the need for a fair and equitable dispersal programme, but the problems we face are as a result of under-funding over more than 14 years and that needs to be addressed.
Why are you spending more and more money on migration services?
It is important that people who have newly arrived in the city have support services to ensure they are able to integrate and are able to contribute to the wider society. These services are grant funded – meaning the money comes from central government sources. No Council Taxpayer money is used to fund any of these services.
Why don’t students have to pay Council Tax? You’d have more money if they did.
The law states that being a full-time student classifies you as a "disregarded person" and, therefore, you don't need to pay Council Tax under any circumstances. That is a national law and not in the Council’s gift to change.
You have millions of pounds in your reserves. Why doesn’t the Council use them to meet the financial shortfall?
We have already used reserves to bridge the shortfall in the past, including spending almost £2m from them last year to manage the overspend. We are currently predicting an overspend of around £7m this year which will also have to come from reserves. As things stand, we only have £30m in reserves that is uncommitted and can be applied to this overspend. However, an overspend at this level would mean that reserves would be down to £23m. Using reserves helps for one year but does not provide a long-term solution. We do hold other reserves, but these are already committed to ongoing projects or are held on behalf of others – for example, we hold almost £58m in reserves that is either owned by schools or is pooled money with the NHS.
Isn’t the financial situation you find yourself in of your own making?
No – any organisation that has received more than £100m less in funding for more than a decade and receives £17m a year less than the national average is going to eventually struggle. In fact, to continue to deliver hundreds of services a year over 15 years of considerable funding cuts demonstrates the prudent decisions taken by the Council.
But you’ve spent money on things like bicycle lanes. That money would have been better spent on bridging your budget gap, wouldn’t it?
Coventry City Council has been very good for many years at successfully applying for external funding for specific projects. However, this money can only be spent on the schemes the funding has been awarded to. Projects such as the Binley and Coundon cycles lanes have been paid for by a number of such grants and not from Council Taxpayers’ money. It is important that we continue this work as it is not costing Council Taxpayers anything and is helping the city meet its ambitions of being greener and promoting health and wellbeing.
You’ve invested in a range of businesses in recent years such as Tom White Waste and Coombe Abbey. Has spending money on this contributed to the problems you face?
The Council has a number of company shareholdings. Our portfolio gave us a collective return of 10.6% last year. This income has helped to fund frontline services and is helping us overcome the lack of funding in previous years. Indeed, without it, further cuts to services would already have had to be made in the past.
If you are having financial difficulties, why do you keep wasting money on IKEA?
The Cultural Gateway planned for the former IKEA building will create a cultural development of national importance by bringing the Arts Council England and British Council to be based in the city. This development will also bring economic and regeneration benefits to the city. Much of the funding is not coming from Council Tax funding. Just like cycleway funding, the Council has been successful in securing money from a variety of sources – such as one-off grant funding – that can only be spent in the area it was secured for. Partners will also pay a rent for their space, meaning that the project will create new and exciting opportunities at no additional expense to Council Taxpayers.