Why cuts to local councils will be much worse than Tories suggest


11:31 am - December 15th 2010

by Paul Cotterill    


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Tories up and down the country have been arguing that the cuts to local government amount to an average of 4.4%.

They do not.

They are much higher than that.

This BBC piece actually sets out the case quite well:

In the House of Commons, Communities Secretary Eric Pickles said councils would see their “spending power” reduced by on average 4.4% next year, with no authority facing a decline of more than 8.9% for any of the next three years.

These figures – published for every council – are smaller than the overall 9.9% because they include all other grants and income that councils get, such as council tax and NHS funding.

Taking my own council just as a fairly middling example – not as badly hit as Burnley in Lancashire but but much worse hit than councils in Surrey – the following figures apply.

The central overnment grant in 2011/12 is reduced by 14.8% from 2010/11. This is the real reduction in central government funds coming in. However, the Tories will be peddling a figure of 6.8% as the reduction in ‘spending power’.

This ’spending power’ figure is something that our very ‘straight’ borough treasurer has described as the government’s ‘new concept’ , and it includes projections for Council Tax income.

It is not rocket science to project that in areas facing massive public sector cuts, that council tax income will be reduced. If you put, say, 1,000 people in the dole, you pretty well automatically reduce your council tax income by a hefty direct chunk (see comments #1 and #2 below), and this is before you start to work out the negative multipliers.

This is only part of the story. My borough treasurer puts it pithily enough:

On the [spending power] basis grant cuts will amount to 6.8% reduction in spending power. However other spending, inflationary and income pressures identified through the budget process will also need to be considered in determining the scale of the financial gap facing the Council.

Finally, the Tories have also tried to conceal the scale of the cuts by capping these nebulous ‘spending power’ reductions to 8.9% in the two year settlement, through the use of a ‘transition grant’ costing a total of £85m nationally (a relative pittance).

This transition grant is in itself part of the lie, as it is only temporary. The underlying cuts are much greater, and especially so in poorer parts of the country. The underlying grant cut for Burnley, for example, is from £14.5 to £10.4m, or around 28% in the first year.

Don’t be fooled by the ‘spending power’ mantra you’ll hear in the next few days and weeks. Tory ‘new concept’ that it is, it’s based on a lie.

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About the author
Paul Cotterill is a regular contributor, and blogs more regularly at Though Cowards Flinch, an established leftwing blog and emergent think-tank. He currently has fingers in more pies than he has fingers, including disability caselaw, childcare social enterprise, and cricket.
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Reader comments


1. Nicholas Ripley

There is more too:

From the Communities and local government website –
‘Local authorities will see forecast reductions of around 30% in overall capital expenditure, including reductions of around 45% in capital funding from Government departments, and OBR forecast of 17% reduction in self-financed capital expenditure.’

This of course will have a significant impact upon the private sector.

The figures as presented also double count £1bn of NHS money transferred to local government for social care as a way of undercalculating the bottom line cuts

See http://whitehallwatch.org/2010/12/14/double-dipping-pickles/

Anybody that’s under any illusion that these cuts will only effect backroom services, need only look at the case of Cornwall Council. For some reason the Conservative led administration has already passed its emergency budget last week. The headline cuts are 2000 jobs to go, 1300 already and 700 more to come. Adult social care funding frozen for three years. Fire stations to close, libraries protected for the first year, presumably smaller ones to close thereafter. Some leisure centers to be privatised (or communitised?) yet no buyers have come forth. This is just a sample of some of the cuts and Cornwall is by no means the worst hit, it provides a bleak preview of other authorities in budgets to come. It also shows that whatever the intentions of budgets services will be hit hard.

Sorry, not an accurate reflection of what’s actually happening in local authorities. Everywhere I look – and I do look regularly – waste on a grand scale is abundantly evident. Labour had the right idea with their policy for Unitary Authorities, tories are apparently not keen on it as it’s not seen as democratic in some way or another. If mergers and unitary authorities were advanced – pushed – , vast sums of money would be saved. 4% cuts on average would become insignificant by comparison to savings.

Police Forces everywhere would also save a fortune by being pressed to do the same. Again, Labour tried that and it got smashed. I trust coalition supporters are reading this thread ? Please take note, at the moment you’re only picking on soft targets for savings – tackle the big stuff for a change.

6. George McLean

@ 5. ted

Are you saying the Coalition’s reduction in funding can be ignored because there are other ways of not reducing the funding that are not going to be implemented by the Coalition?

7. Nicholas Ripley

Ted, you are making assertions which ignore the article and ignore the other commentary such as ‘4% cuts on average’, 4% does not represent an average at all. It is one thing in saying Unitary authorities make savings and should be pushed, it is quite another to actually enact that. If a county and it’s districts/boroughs have different political governance it becomes particularly difficult. As to the savings being made, if any, they have to be judged against jobs lost, accountability diminished, efficiencies lost and gained etc. It is not a panacea, it’s a complicated and at times a counter productive move.

I think the ‘spending power’ is actually quite a sensible way of talking about it, and I say that as a Tory-hater.

Local government finance is pretty arcane, but what people care about is the outcome – what councils actually have to spend. The exact amount a given grant is reduced by is important for chief financial officers, yes, but for the general public I think it’s good to remind them that Government grants and what a council spends aren’t the same thing.

Yes, Burnley’s cut may be 28%, and OK, this is a useful figure to attack the Government with – but when presenting the overall situation to the general public, it’s not like Burnley is going to be cutting its spending by 28%, or residents will see a 28% cut in the number or efficiency of council services.

9. Chaise Guevara

Sunny, can you do anything about the guy at 2? He spams half the pieces on economic policy advertising his poorly thought-out article.

I suspect the Daily Mash has it right on this:

http://tinyurl.com/355qy6d

Apologies, I should have written 30 % – not 4 %
I appreciate Unitary Authorities are hard to establish, just a matter of determination really as the alternatives are less than palatable for most people in Britain.

The impact of reduced funding on Councils is entirely dependant on what is cut. There are whole swathes of Local Authority activity and expenditure that could cease in an instant without impacting on anyone, other than the employees directly affected.

My own Council, for example, has an Equality and Diversity Coordinator, a Community Engagement Officer and a Hate Crime Manager. I know this sort of comment is dismissed as an urban myth in these parts, but it is true.

The Equality Standard for Local Government helps us to measure progress towards promoting diversity……….In order to meet the requirements of the standard we need to ensure we carry out Equality Impact Assessments on all council functions, services, projects, strategies and policies.

If you are interested in the full extent of the lunacy and the useless box ticking and form filling entailed in complying with the above, I suggest you read this.

http://www.equalities.gov.uk/PDF/Equality%20Bill%20Eq%20Impact%20As.pdf

But I bet you can’t.

Of course if the agenda is to pass on to the public the full horrors of the cuts by Central Government, you won’t get rid of these tossers.

You will do much better to sack some meals on wheels ladies.

13. Nicholas Ripley

pagar

You have made a poor argument: the whole swathes of expenditure you assert turns out, from your own examples to be particular jobs (which you must dislike). You then selectively quote from the Jobs purpose, which states: ‘in order to meet the requirements of the standard’, which reveals that the LA have been working to implement standards as set either through primary legislation or through a local agreement of standards as accepted by the democratically elected authority. To make these jobs redundant requires either a change in legislation so that the LA’s are no longer required to obtain and maintain standards and/or over riding local democracy.

Assertions of ‘lunacy’, and ‘tossers’ hardly frames this as the most rational argument does it? It will suffice to note the obvious, the jobs that you so colourfully describe all pertain to equality, perhaps you have a policy agenda that you are not sharing?

“y own Council, for example, has an Equality and Diversity Coordinator, a Community Engagement Officer and a Hate Crime Manager. I know this sort of comment is dismissed as an urban myth in these parts, but it is true.”

Pagar, those are just names. Could you give me an example of what they each do? Only then can we determine whether its worthwhile keeping them.

I’ll give you an example. A friend of mine works as a disability equalities officer. So probably falls straight into the “waste” category according to you. yet when you look at what she does, you’d probably have a more difficult job persuading people that she is waste. For example: part of her job is helping get disabled people into jobs, and last year she got around 30 people employed directly in the private sector. All 30 of those were previously on higher rate disability allowance, so the savings to the taxpayer of this small part of her job alone covers her salary.

Well obviously cuts are bad. But what were you proposing to cut instead?

Every cut proposed seems to generate an article on here opposing it, but since there is no money what do you expect government to do? Keep on borrowing and get into more debt. Because apparently debt is a bad thing – according to those opposed to the cuts on university spending…

You can try and argue we are not spending too much and that it doesn’t matter if the government spends more (which will unleash the normal economic-debates), but bluntly if you oppose a cut, you need to indicate where the money should come from. Even if it is just to put up higher taxation – anything else is giving a fallacious opinion (which most writers on here presumably do not hold) that the cuts are for their own sake and not to meet budgetary constraints.

@ Nicholas

To make these jobs redundant requires either a change in legislation so that the LA’s are no longer required to obtain and maintain standards and/or over riding local democracy.

I agree that it would be enormously helpful if Central Government repealed some of the ridiculous primary legislation that constrains Councils from operating efficiently. A smart Local Authority would ignore it and wait to be prosecuted but that is not in the dna of many.

It will suffice to note the obvious, the jobs that you so colourfully describe all pertain to equality, perhaps you have a policy agenda that you are not sharing?

Don’t get me started on risk assessments……………

@ Planeshift

Could you give me an example of what they each do? Only then can we determine whether its worthwhile keeping them.

An Equality and Diversity Coordinator is responsible for ensuring everyone else in the Council complies with the Equality Standard for Local Government. This is done by ensuring they all fill in a form called an Equality Impact Assessment whenever they do anything. He/she doesn’t do anything useful like getting disabled people into jobs.

Here is an equality impact assessment.

http://www.wirral.gov.uk/my-services/community-and-living/equality-and-cohesion/equality-and-diversity/equality-impact-assessments

Please look at it and tell me this has value.

Then try to imagine what it must be like to have to fill in one of these every time an action, of any sort, is taken. Think of the thousands of man hours lost in doing so and, worse, the way in which the requirement to waste time on this sort of stuff stultifies the culture of the organisation.

“Well obviously cuts are bad. But what were you proposing to cut instead?”

In the general sense, defence spending, and subsidies to big businesses. I also was in the minority of thinking the child benefit cuts were ok. So there are some things that probably can be cut.

But to truly answer this question you need to have a detailed knowledge of the accounts to get precise figures. I think for example we would all be in favour of changing the expenses policy to mean people had to use the travelodge rather than a 4 star hotel, but without access to the accounts you don’t know precisely how much this would save. Efficiency savings are usually made by frontline staff when they are given the power and are the cumulative efforts of staff – not buying stationary here, not using the printer there etc.

More generally I think savings will occur through reducing staff in call centres and enabling people to interact with councils online (you can pay council tax online, but there is still a lot of stuff that you have to call up for), and some money can be raised through using assets a bit more wisely. Instead of hiring offices, simply make it a job requirement that a person works from home and uses their own PC (occasionally coming in for supervision).

“Please look at it and tell me this has value.”

Fair cop. That doesn’t look like something that needs to take up an entire person’s job.

“Well obviously cuts are bad. But what were you proposing to cut instead?

Brilliant troll logic”. Newly elected govt wants to now what others might do.

How about the £7 billion to bail out the Irish banks who were only doing what the right wing said they should do, and lend, lend, lend, and cut taxes.

You have decided for ideological reasons that the debt must be paid off in 5 years , In the middle of a global recession.

20. scandalousbill

Pagar,

You state:

“The impact of reduced funding on Councils is entirely dependant on what is cut. There are whole swathes of Local Authority activity and expenditure that could cease in an instant without impacting on anyone, other than the employees directly affected.”

Barbara Keeley MP, the Shadow Minister for Communities and Local Government makes an intereting point with this regard at LFF:

http://www.leftfootforward.org/2010/12/barbara-keeley-response-to-eric-pickles-local-government-cuts/

“Yet the Local Government Association estimates that 140,000 jobs will be lost in local authorities next year. Ministers are allowing councils only £200 million in capital to pay for redundancies – one tenth of the amount they are likely to need to meet these costs.”

In the context of front loaded cuts, your argument fails because the monies required to pay redundancies will necessarily usurp funds from other areas of expenditure

This problem requires a top-down – not a bottom-up approach. Local Authority structure needs tackling – individual jobs are important but have little real impact in the wider scheme of things. Unitary Authorities and Council Mergers are the only real answer for the longer term. I also dismiss the idea of ‘shared services’ They save a lot of money but nowhere near what is required.

If Labour were on the case, they would develop this further because it’s real savings over a longer term. In other words, compulsory redundancies would be very rare indeed.

“This problem requires a top-down – not a bottom-up approach”

Well in terms of structure and legal requirements then yes. But overall no – efficiency can only be made from a bottom up approach that works with staff and isn’t imposed from above. Chris Dillow made this point numurous times – senior managers and politicians are going to be incapable of seeing where the gains can be made.

“I agree that it would be enormously helpful if Central Government repealed some of the ridiculous primary legislation that constrains Councils from operating efficiently. A smart Local Authority would ignore it and wait to be prosecuted but that is not in the dna of many.”

n.b. that this approach would cost taxpayers more than employing an Equality and Diversity Co-ordinator.

A few years ago, Ealing Council cut a grant to Southall Black Sisters without doing a full and proper equality impact assessment. Southall Black Sisters took the council to the High Court, got its grant reinstated and the council got to pay the costs (a six figure sum).

Choosing not to comply with laws which you don’t like does not actually save money.

I think, in any case, that employing someone to “look at the likely positive and negative impact of their work on staff, members, service users / customers, partnerships, individuals and communities with regards to equality of opportunity and promoting diversity in employment and service delivery, and to take appropriate action” is a perfectly reasonable part of business planning in an organisation the size of a local authority, which has a duty to serve all of its residents.

@ Bill

Yet the Local Government Association estimates that 140,000 jobs will be lost in local authorities next year. Ministers are allowing councils only £200 million in capital to pay for redundancies – one tenth of the amount they are likely to need to meet these costs.

I think that’s a very fair point.

My own Council have offered redundancy to all staff, but, again, that sort of action is part of the problem.

Because when you do that, what happens is that the quality personnel- those that are confident they can make it on the outside- take the money and run and the dead wood remain. Managing down-sizing in an organisation is a difficult and painful managerial task and one that, it seems, the highly paid council executives are not prepared to countenance taking on. Which brings me back to my starting point.

The impact of reduced funding on Councils is entirely dependant on what is cut.

A few years ago, Ealing Council cut a grant to Southall Black Sisters without doing a full and proper equality impact assessment. Southall Black Sisters took the council to the High Court, got its grant reinstated and the council got to pay the costs (a six figure sum).

Thanks for that one, Don

I’ll go for a lie down now…………….

26. Nicholas Ripley

‘Every cut proposed seems to generate an article on here opposing it, but since there is no money what do you expect government to do?’
The first thing to do is to question this assertion revealing it for what it is, a deterministic ideological position. If there is insufficient money then the balance between fiscal and monetary policy requires adjusting. As all the tools in monetary policy are effectively maxed out, the adjustment would have to take place within fiscal policy, so Government Expenditure can be cut, taxation can rise. What Government expenditure is cut or what taxes rise is then a matter for policy. So there is money, the Government do have choices, and your argument is lame.

But, Don, before I go please explain how the Southall Black Sisters (who presumably refuse to help to victims of domestic violence if they are white) are promoting equality and diversity?

OK I’m off!!!!!

“But, Don, before I go please explain how the Southall Black Sisters (who presumably refuse to help to victims of domestic violence if they are white) are promoting equality and diversity?”

That would be illegal. Despite the name, they help women and children experiencing domestic and sexual violence, whatever their ethnicity.

I thought you’d appreciate the anecdote 🙂

Despite the name, they help women and children experiencing domestic and sexual violence, whatever their ethnicity.

“Southall Black Sisters, a not-for-profit organisation, was established in 1979 to meet the needs of black (Asian and African-Caribbean) women. Our aims are to highlight and challenge violence against women; empower them to gain more control over their lives; live without fear of violence; and assert their human rights to justice, equality and freedom.”

Nowhere on their website does it say that they help non-black women.

As you say, it would no doubt be illegal for them to discriminate on grounds of race but they’re not exactly promoting themselves to a diverse audience.

Sunny, can you do anything about the guy at 2? He spams half the pieces on economic policy advertising his poorly thought-out article.

True – but then readers might go to his piece and realise how badly thought-out the opposition is 🙂

31. Chaise Guevara

@ 16 Pagar

“Then try to imagine what it must be like to have to fill in one of these every time an action, of any sort, is taken. Think of the thousands of man hours lost in doing so and, worse, the way in which the requirement to waste time on this sort of stuff stultifies the culture of the organisation.”

But surely it’s not the fault of the officer in charge of dealing with this, nor the council for hiring them, but whoever mandated it in the first place? I mean, even if it’s totally pointless, given that the rule exists it might be worthwhile for the council to make sure it is observed (to avoid penalties, not simply on the form’s merits).

32. Chaise Guevara

@ 30

Aha. Playing the long game, I see!

Nowhere on their website does it say that they help non-black women.

If non-white women came to them they would help them. Or at the very least help them get support from a mainstream org. SBS is a specialist. If you go to an eye doctor and they refer you to a specialist, that’s not discrimination – grow up.

Sunny @ 33

We’re off topic but it’s your blog.

OK, so I set up an organisation called Whitechapel White Brothers.

I describe it as an organisation set up to help white males from Whitechapel who have alcohol problems.

I don’t make it clear on the website that non-white people are welcome and would be helped.

Do you think my organisation could be seen as promoting equality and diversity?

Would I have a chance of getting grant funding?

SBS is a specialist.

What?

Are you saying bruises look different on white women?

“Would I have a chance of getting grant funding?”

You probably would once you could demonstrate a track record. All you’d need to do is pitch it as your group focusing on “hard to reach” people, – which would be implecitly understood once you explained you were dealing with people who have alcohol problems.

36. Chaise Guevara

Pagar makes a good point, though: there’s a difference between being a specialist and refusing to serve people based on their race (or at least apparently going to some lengths to give that impression).

Interesting, good comments and I notice the lefty-loonie brigade are not contributing ! Come back Sally, all is forgiven – provided of course you behave yourself and offer sensible replies to these complex issues.

No arts funding at all in Somerset. All gone. Fourteen libraries to close. Removal of subsidised bus fares for travel to college….. Our Conservative led ,council are raring to go. No sense of upset yet. People seem quite sanguine to date. I signed a petition against the cuts to our local theatre and was greeted with a sigh and the comment, ‘of course the leader of the council loves all this attention really.’

I don’t know what to make of it all yet. This is not a place known for getting overly fractious. There was hardly any fuss about the last MP’s expenses scandal for instance but when I questioned this someone just tapped their nose and said, ‘aye, but its been noted.’ The MP was voted out and the Tories lost the seat after holding it for 25 years. I suppose the lesson is that the council here will pay if it makes what the people consider to be the wrong cuts in the wrong way. I wait to see.


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