Latest Public Sector News

13.12.18

Oxford council owes balanced budget to its wholly-owned public services company

Oxford City Council has owed its fully balanced four-year budget proposal – which is better than many other local authorities up and down the country which have been forced to make often drastic cuts to services – to its approach to wholly-owned companies.

Its 2019-20 budget, published this week but yet to be considered by the Executive Board at an 18 December meeting, hopes to deliver balanced books by raising council tax by 2.99%, similarly to what other authorities have been doing.

Unlike many other councils, however, Oxford is planning to increase spending across a range of services such as homelessness and housing. Capital investment over the next four years will amount to £192m, with the largest slice going to Oxford Direct Services Ltd (ODS), its wholly-owned social enterprise.

ODS was formed in April this year as a way to ensure the council can continue delivering the core facilities formerly provided by its direct services operations – such as waste and recycling, car park operations, park maintenance, and road repairs – as well as some additional services.

Oxford’s trading had taken its departments closer to the legal limit of how much a public authority can gain from private work. Establishing a social enterprise means it can legally continue to extend its commercial operations.

Cllr Ed Turner, board member for finance and asset management, admitted that the city council’s budget is “being framed in challenging times,” with the government grant reducing to zero next year despite interest rates remaining low – therefore affecting returns on council investments.

But he added that, despite its exposure to wider economic risks that affect the local economy, the council’s “commitment to the ‘Oxford Model,’ with wholly-owned companies, puts us in a better position than many local authorities.”

“Clearly, there are difficult decisions to be made and there are modest increases in some charges. But by being willing to prioritise, we will safeguard frontline services and in particular support the most vulnerable in Oxford,” Turner explained.

After next week’s meeting, the budget will then go out to public consultation before a final decision is made in February.

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