Council treasurers are stabbing at their calculators all over the country, wondering how to balance the books in 2009. Hard pressed middle class parents taking their kids out of private school are demanding state sector places, and as unemployment grows the demands for free school meals and school clothing grants is soaring. Housing benefit and council tax benefit claims are climbing. The collapse of recycling prices are creating huge additional costs in dealing with worthless waste, and the collapse in steel scrap prices will mean the return of burned-out abandoned cars to our streets, which councils will have to pay to have removed for the first time in years. Childrens' departments have become more risk-averse than ever in the wake of the Baby P case, and costs for fostering and care homes will soar. The collapse in the equities market will be placing huge inflationary pressures on council pension funds, and some councils will be having to find the money to pay for losses in Icelandic banks and Ponzi schemes. The cold snap will have added millions to the national gritting bill
At the same time, council incomes from traditional sources such as car parks, leisure centres, venue hire, weddings, licensing and commercial waste will be falling. And council tax increases are effectively capped by central government.
If ever there was a time when councils needed to take stock of their core functions, it's now. The Taxpayers Alliance are pushing at an open public door with their Non-job Report; although the June council elections are limited to county councils, they offer the prospect of leaving Labour without a single county council, and without a single seat on some county councils.
But the Conservatives councils should not be complacent. Currently 19 of the 27 county councils are Conservative controlled. They need to demonstrate that they can manage the financial effects of the recession without raising council tax or slashing services. Stephen Greenhalgh has shown how it can be done. It's time every council learned these lessons.