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What will the Budget cost Wokingham families and workers?

By Victoria Corbett
June 30, 2010

Wokingham people have been counting the cost of the Budget announced last week.

Key points of the Budget set out by Chancellor George Osborne on Tuesday, June 22, include an increase of VAT to 20 per cent, a freeze on child benefit for three years and two-year freeze on public sector pay for people earning more than £21,000.

Victoria Corbett took a closer look at what the Budget will mean for Wokingham.

Schools

The borough’s school staff are among the public sector workers who will see their pay frozen over the next two years.

Although employees with earnings less than £21,000 will receive a £250 flat pay rise in each year, the National Union of Teachers (NUT) says the pay freeze amounts to a cut and could drive good teachers out of Wokingham because of the high cost of living.

Robert Wilkinson is secretary for the Wokingham branch of NUT and based at Ryeish Green School.

He said teachers are being assured the three year pay deal agreed with the last Government, which ends this year, will be honoured with the agreed 2.3 per cent pay rise before the freeze.

Mr Wilkinson said: “We are very conscious inflation is rising again and the two year pay freeze is effectively a pay cut.

“It just depends how that is put together with the fact we are facing a demand for rising contribution for the pension scheme.

“There will be less take home pay because the 6.4 per cent we pay in the pension now is likely to rise to 7.2 per cent or higher.”

He added many young and gifted teachers are forced to leave Wokingham because they cannot afford to buy a house, which limits the talent pool for local schools.

Wokingham Borough Council is working on how reductions in funding from the Government will impact on local schools.

One area of concern is school repairs, with many of Wokingham’s school buildings requiring major work to bring them up to 21st Century education standards.

There is a question mark over the future of funds to rebuild schools after the Building Schools for the Future fund was frozen.

Alex Biddle, headteacher at St Crispin’s School in London Road, said: “The secondary school building stock in Wokingham is generally speaking in a pretty parlous state overall.

“There will be issues there, but I am more concerned about issues relating to personnel.

“Yes buildings are very important but the major concern is one of having to reduce staffing levels, whether it be teachers or non-teachers. It’s that relation-ship that makes the difference to children.”

Wokingham Citizens' Advice Bureau (CAB)

More people are expected to be calling on the CAB for help with their finances in light of the budget changes, but the bureau will have fewer funds to continue its work.

Last week it was announced Citizens' Advice Bureau nationally would see an 11.6 per cent cut to its £20 million Government grant.

Wokingham CAB is unsure what this will mean for its organisation in Market Place, however it has already lost additional grants it would sometimes receive from the national bureau.

The CAB has faced additional pressures this year because Wokingham Borough Council has stopped exemptions from business rates for charities.

This year, Wokingham council has decided to charge charities based on a formula. As a result of this, the CAB has paid £500 in rates this year.

Manager John Ferguson (pictured) said: “What we have got is more work to do because more people are coming to us with more complex problems and effectively less resources.”

Business

The town’s MP is disappointed at the decision not to include the South East in an incentive scheme for new small businesses.

Under the scheme, small businesses would be offered a £5,000 tax break on national insurance contributions for each of the first 10 people they employ, but only outside the south.

John Redwood said: “I welcome that incentive but I would like it extended to my constituency as well. I do not feel there is a chance of that happening because the Government feels we have to tip to the scale in favour of the parts of the country not performing so well.”

Mark Ashwell, chairman of the Wokingham Chamber of Commerce, said: “We are very worried about the fact the South East has been ignored as far as the £5,000 tax breaks are concerned. By not investing in this area, which is successful, we are going to be sold short as a nation.”

Ian Manners, 57, from Warfield, runs a marquee hire and sales firm in Binfield Road, Wokingham. The former brother-in-law of US president Barack Obama said the Budget was not as bad as he had expected. Mr Manners, a father-of-four, said: “Business to business it won’t really affect us but the rise in VAT will affect the domestic sector and it will affect our sales to schools where we sell canopies.”

Wokingham Borough Council

Most council staff in Wokingham will not be getting a pay rise for two years.

The borough council has 543 full-time employees earning less than £21,000 who will be eligible for the Government’s £250 flat rate annual pay increase in each of the two years. The remaining 973 staff at the council earn more than £21,000 and will have to cope with no annual salary increases during the period. The Government has also announced a one-year freeze on council tax.

Paul Bee, UNISON Wokingham branch secretary, said the budget was an attack on the public sector. He said: “I think it is outrageous. I think the idea that the public sector should be paying for other people’s mistakes is not acceptable.”

Families

Lone parents will be asked to look for work when their youngest goes to school and child tax credits will be cut for those on a combined income of more than £40,000.

With child benefit frozen for three years, Wokingham families are counting the cost of the changes for them.

David Penn, 38, has four children aged five to 15 with wife Maria, 27. The family lives in council-owned housing in Eustace Crescent in Wokingham.

Mr Penn is registered disabled and the family also receive benefits for their children.

Mr Penn said: “Having four children and getting benefits for three of them we are seeing the money coming to us going down and everything else going up.”

Pensioners

The country’s pension system will be completely reformed under plans from the secretary of state for work and pensions.

Iain Duncan Smith revealed plans last week to raise the state pension age to 66.

Figures from the Department for Work and Pensions reveal Wokingham already has one of the highest percentages of the population in Berkshire working over the current state pension age of 59 for women and 64 for men.

In Wokingham, 18.4 per cent of people over the state pension age are still working, compared to the south east average of 13.9 per cent.

Projected figures show in 2030 Wokingham will have one of the highest populations of people aged over 65 in Berkshire, with 19.3 per cent of the population.

Police

Thames Valley Police agreed a budget with £3.4 million worth of savings on Friday.

The police authority was told along with other forces in the country they would be required to make in-year savings as part of the £6.2 billion savings plan announced by the coalition Government.

The savings in Thames Valley will be made without reducing police staff or officer posts.

Reducing costs will be done through initiatives including reducing police officer overtime by five per cent to save £529,000.

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I agree that the two year public sector pay freeze is actually a pay cut given the RPI inflation rate.

It is also important to add, that although the budget advised that each public sector employee earning below £21,000 will receive a flat rate pay rise of £250 this year, that the Local Govenment employer's side is refusing to honour this Coalition Government pledge. Shame on them!

Paul Bee

UNISON Wokingham District Branch Secretary