The £50 Efficiency Dividend

In this story: The £50 dividend Free April parking Business Support What do you think?

Kensington and Chelsea has this year once again announced one of the lowest council tax rates in the country and the third lowest in London. Years of careful management have delivered great services combined with value for money. This year the Council’s prudent financial management has allowed it go even further and pay out a special, one-off, efficiency dividend of £50 to most of the borough’s 84,000 council taxpayers – a great help in these difficult times. Residents who receive Council Tax Benefit will get the same help by way of a £50 cheque.

Each year the Council must set a balanced budget.  It did that this year by identifying savings and efficiencies of £5.4 million. If the Council had to rely on the grant from central Government, which this year rose by only 1.75 per cent (equivalent to just £1.8 million), Kensington and Chelsea would have had to increase council tax rates by much more than the 3.2 per cent approved by Council on 4 March.

The £50 dividend

By using reserves built up over the years from efficiency savings, it has been able to give most residents who pay council tax a £50 dividend at a time when money is tight. This payment means council tax has effectively been frozen for people in the top Band H and cut by 3.5 per cent for households in Band D.

The decision to make this dividend payment instead of freezing council tax was taken for three reasons:

• it pays the same to all residents liable for council tax and therefore gives proportionately more help to those on the lowest incomes
• it delivers cash help in April when it might be most needed and appreciated
• it can potentially provide a £3.7 million stimulus to the local economy – if residents spend it locally

This measure is just one of many that the Council is taking to help local residents and businesses alike deal with the economic downturn. The Council hopes that some of its wealthier residents will take the opportunity to donate their windfall to a local charity, and to help those who wish to do this it has made a special arrangement with the YMCA in Earl’s Court, which helps homeless young people.

Free April parking

A second measure to lighten the economic burden locally is to encourage residents from other boroughs to shop in Kensington and Chelsea by offering free parking on four Saturdays in April. More than 5,600 car parking spaces will be available for motorists to park free for up to a maximum of two hours. This experiment is designed to free up pay-and-display bays and encourage more trade in the borough’s shops.

Business support

The council funds the Portobello Business Centre (PBC), which offers local advice on how to start and stay in business. The Council is determined to focus on recession-related measures to promote fitter and more efficient business practices. PBC helps this aim by offering free advice and consultancy from qualified experts on investment, capital, training, tax, marketing and management. Find out more at www.pbc.co.uk

Take a look at www.rbkc.gov.uk/BusinessZone for regular updates on Council-backed initiatives that support local businesses.

The resilience of the Council’s finances is not just due to its reserves, built up over a number of years, but also to its effective risk management. Both are critical in realising the Council’s aims to deliver really good and responsive services over the medium to long term.

Because the Council’s financial position and the overall economic environment continue to fluctuate, the needs of the Royal Borough change constantly.

The Council’s reserves enable it to:

• plan an ambitious capital investment programme with confidence
• fund the transitional costs of both savings programmes and service improvements
• withstand short-term loss of income or absorb extra spending, e.g. during this recession.

The cost of the £50 efficiency dividend and the other measures to help local businesses will be funded from reserves and balances. The Council’s finances remain strong, and with prudent planning and proper provision for both known and likely increases in future costs, the Council expects to maintain financial stability in the future.

What do you think?

What will you do with your £50 dividend? Are there other measures the Council should take to help residents and our local economy?

Please send your comments to: rbkcdirect@rbkc.gov.uk