In a letter to Lib Dem Leader Ed Davey in advance of today’s announcements by the Prime Minister, Cllr Richard Kemp has asked his Party’s MPs and Peers to recognise the importance of Cities in stimulating national economic growth. On that basis, he is asking Lib Dems to support calls for investment in the City’s economy and the City Recovery Plan which was sent to the Government in June.
Cllr Kemp says, “the short-term future of the City looks grim with more pressures on the Council’s budgets and a likely large increase in unemployment coming up after the reduction in support to the hospitality industry and furlough schemes. However, I believe that Liverpool is a resilient City and is one that can make a huge beneficial impact on the regional and national economies.
We need help short-term to keep the basic public and private sector infrastructures intact but in the long-term we can build on the realignments of the last 20 years and place City as a leading European and even global player particularly in research, environment and health companies. Money given to Liverpool now is an investment in the future which will be a hand up for our growth and economic stimulation.
The full letter to Rt Hon Ed Davey is attached
Leader, Liberal Democrats
The state of the City of Liverpool
Thanks for your note regarding our view of the City’s position prior to the lunch time announcements. This is my response.
In general terms both within the Council and the City as a whole, things look bleak. In cash terms the Council seems to be heading for about a £20 million+ deficit this year. This cannot be fully determined at this time as we await three small tranches of money relating to our lost income.
Things look very difficult for next year with up to a £50 million deficit with our council tax and NNDR income under threat. This will mean that we will have to take a 10% real terms cut to our expenditure after 10 years of austerity budgets which have hit at our service provision. There is now little fat in our budgets and although we can be a little more nimble in some aspects of our work we will be left with less services to those who need them.
In the meantime, our expenses do not get appreciably less. There are marginal savings on some aspects of our work but an increased rate of unemployment will add continuing pressures onto our budgets for school meals and general work about council tax rebates.
Our social care costs have continued to rise. The care homes currently have less people in them but cost roughly the same to run. We have been able to cope this year with the extra money given to us which enabled us to renegotiate new terms with care home providers. At the moment we have no guarantee for the continuation of the cash for this purpose. This could soon lead to the closure of care homes and the movement of fragile people to new homes which could be a killer. The homes will be needed in the mid-term so we will be reducing capacity across the sector which will be difficult to increase in the medium term.
We have an excellent public health team in place and our element of the track and trace has worked well with more than 95% of people being traced. More importantly we have used local messaging and targeting of groups by people that individuals within the community trust. As elsewhere we have been hampered by national NHS decision making and the lack of clarity from the Government about what we, as individuals, need to do. Trust with the government is wearing thin.
Relationships with the NHS locally have generally been good and there is a strong sense of partnership with not only them but our our other key partners such as the Universities. A recovery plan has been produced which we have had some concerns about as it was based on ‘shovel ready’ schemes devised before Covid. However, our concerns have been noted and there have been alterations made behind the scenes relating to them which keep us on board.
We support the general contention that rebuilding the Country must start by rebuilding our Cities which are the powerhouse for potential growth. We have pressed for a realisation that the Council needs to work with the people and businesses of the City to build a ‘new normal’ which builds on the good things that have happened in our communities and the desire for a cleaner, greener environment.
As yet we do not know the full extent of the economic fall out for our business sectors although there are clear signs both of resilience and concern for the future.
We have a large hospitality industry based on short term visits; cruise liners and students enjoying themselves. This is worth £4 billion to our economy but is hugely threatened. Another lock down on the less than generous terms currently being mooted will lead to many more closures than those that have happened. In general terms it is the chain providers that have been making closures and the local independents grimly hanging on. This cannot continue. The football fans are not visiting, the cruise liners haven’t visited once, the students are confined to barracks!
We have however made improvements in our local attraction with more people having staycations in the City and actually seeing for themselves some of our 980 listed buildings and beautiful parks.
The fall back of the retail sector will particularly hit our City Centre where there is at least a minimum of a 40% reduction in footfall from last year. We, as will every other City and large town, have to reconsider and repurpose our City and district centres to be more than just a shopping and leisure centre.
Job cuts have started but have been muted by furlough and other schemes. I would anticipate that in the next few weeks the unemployment rate will have substantial increase in the City as these programmes fall out or are reduced as suggested.
So far, we have been able to keep up much of the capital programmes of the public sector although there is uncertainty about future years programmes. I would anticipate that our private housing sector, which has a number of uniquely Liverpool problems, will suffer in the short to medium term.
There is an unprecedented call on services like our food banks. We have people in our City going hungry not because they are feckless but because a combination of zero hours contracts and reduced benefits mean that they have no money. This will in turn lead to more calls on our social services for things like child care and domestic violence which are seeing a small growth but which will get worse.
In the short and medium terms we have been publicly and privately supporting the Labour administration believing that we are in a ‘war time’ state of emergency and we should work together where possible. We have caviled at some schemes that Labour have proposed and have been successful in preventing things like a zipwire proposal that would have made a laughing stock of our heritage sector and the closure of two excellent care homes which were only opened last year.
At the moment Liverpool is coping because have to and because there is a tremendous sense of community here in the City.
However, the future looks bleak. Unless Liverpool gets a good financial settlement, the Council will shortly have no alternative but to commence planning for cuts that will affect vital services. I have agreed to join an internal working group to consider all aspects of the Council’s work. As a Party we have not only said that we would work in this way but that we will also support its conclusions. We will not play Liverpool politics at this time of acute need.
But the future looks grim. Liverpool is not begging for money but making an offer to Government. We are putting place a series of projects and programmes around the health sectors and our Universities in particular which will create good quality jobs which will spin off money into other sectors.
What Liverpool needs now is not a handout but a hand up. We can contribute to the future wealth of this Country if in the short term we can keep the fabric of our City intact and in the long-term have a £200 million investment of government cash into projects which the private sector have committed £1.2 billion to kick start our economy for the future.
We believe that this is a bargain the Government should respond to with alacrity.
Always feel free to ring me or email me. Perhaps we can show you round our City soon when I am sure our Mayor would join with me in showing you some of our opportunities.
Regards as ever.