Did Labour councils deliberately cut frontline services?


8:00 am - March 22nd 2011

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Guest post by George W. Potter

I’ve been holding up the example of Lib Dem run Sheffield council vs Labour run Manchester council recently as an example of how councils aren’t forced to cut public services – they choose to. I’ve been challenged on this comparison so this is an article where I’m going to compare as much as possible between the two councils to try and settle the issue once and for all. I’m going to try and create a fair and balanced comparison of the state of the two councils, their funding, the cuts to their funding and the cuts to services they are making.

For the record, all statistics used will come either from the council websites, local media or the BBC. Hopefully this will mean the data can be considered reliable. I’ve also used direct comparisons and the most up to date data whenever possible. For example, population will be using the 2009 estimate but details of the percentage of residents in each age group will be based on the 2001 census figures.

As you can see from this, both councils are relatively similar in terms of their residents. When it comes to employment and life expectancy, Manchester is significantly worse off but in most others it is only one or two points more worse off at most. Sheffield is also slightly larger and has a lower average weekly wage. Both have to provide a similar level of social housing and both have similar levels of unqualified residents. Manchester has a smaller elderly and non-adult population percentage-wise than Sheffield so presumably has to provide slightly less education and care home facilities.

Here’s a table to show you what they look like (when it comes to schools I’ve excluded academies and independent schools):

Now let’s look at their financial situation:

Now, what this data shows is that Manchester receives more funding per head from the government than Sheffield and spends more per head. Manchester is actually spending more than Sheffield overall despite having a lower population. Compared to Sheffield, Manchester has a lower council tax rate, receives more funding from central government, will be spending more on capital projects, will receive more grants to spend on capital projects and will be borrowing less.

Despite this, Manchester is making far more substantial cuts, including closing all but one public toilet and making over nine times more people redundant than Sheffield is.

So what we can say overall is this. Manchester is in a slightly worse position than Sheffield economically and demographically and therefore the effect of cuts should be worse there than in Sheffield. After all, Sheffield is being forced to make smaller cuts to a larger population. However, the difference in circumstances between the two councils is not enough to explain the vast difference in the way in which the respective councils are making the cuts. Sheffield is making cuts with an emphasis on minimising redundancies and front-line service closures. Manchester is cutting both jobs and front-line services across the board. Frankly, I think the statistics speak for themselves. Almost no front-line services are being closed in Sheffield while Manchester is closing dozens of surestart centres and youth centres. Given the difference in situations, you would expect some front-line services to be shut and more redundancies in Manchester but nowhere near the scale that we are seeing. It also seems clear that Manchester council hasn’t looked at many cost saving measures that Sheffield has – for example, Sheffield is going to start sharing back room services with other councils to cut costs.

Sheffield Lib Dems have shown that it is possible to handle large cuts without gutting crucial services. Manchester Labour seem almost to have taken delight in making such savage cuts and then blaming them on the Coalition. It is also deeply telling that Labour in Sheffield didn’t propose their own alternative budget despite the fact that they could have gotten it voted through if they’d persuaded the three Green and Independent councillors to vote for it. This indicates to me that, not only did the Lib Dems in Sheffield protect their city from the cuts, they did it to such an extent that the opposition couldn’t think of a better way to do it.

In conclusion, I think it is fair to say that the example of Sheffield vs. Manchester is a fair comparison and shows, as many have argued, that councils do not need to make substantial service cuts and redundancies just to balance the budget. Labour’s cuts in Manchester seem deeply political on the back of all this.

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Reader comments


I want to add an addendum.

Since writing this, my opinion has changed slightly. It isn’t fair to say that this shows that Labour councils are making political cuts while Lib Dem ones aren’t. What it does show, in my opinion, is that some of the Labour councils (and they are mostly Labour) complaining about being forced to make brutal cuts are actually in a position to be accused of making reckless cuts safe in the knowledge that they cam pin the blame on the coalition while other councils without that luxury are doing a far better job in protecting services.

I’d also like to add that you shouldn’t automatically believe councillors when they say they’ve got no choice but to gu2 essential services.

Makes a pleasant change from LC reposting Labour Party press releases.

I call bullshit or at least very selective use of data. Not that the Lib Dems have ever done that . (Witness the only the lib Dems can win here leaflets using European election data for Scottish elections).

Indeed your post could be said to be politically motivated. A lib Dem looking for a crumb of comfort for the neo liberal vandalism of services that his party is cheerleading .

@3.

Funny though, I seem to remember someone making a comment on this very site a few weeks ago, proposing that Labour councils should do exactly this, blaming it on central government, in order to get voters to vote against the coalition.

I also seem to remember that Sunny slapped him down.

The truth is though, that there are plenty of people who describe themselves as being socialists or whatever, who put their ideology before their concern for people.

Vermins!!!

5. Cynical/Realist?

Why do people insist on comparing Local Authority areas as though they are ever directly comparable*? Living in Nottingham we get this a lot. Nottingham is a very narrow council area which never grew as the city grew – over half the actual city falls outside the city boundaries in councils such as Gedling, Rushcliffe etc. Its generally (apart from Wollaton) the inner city poorer areas that fall in Nottingham. So it makes the city easy prey for cheap, ‘worst crime stats’, ‘most gun crime’ etc. The figures are skewed by the simple face boundaries are never perfectly apportioned for comparisions.

A great area of Sheffield LA’s area is countryside. Manchester is an inner city council area forming only a part of the wider ‘Manchester’ area. The two councils face different problems, over different populations in different contexts.

And I really don’t follow the argument that by blaming the coalition Labour strengthens itself. Quite the opposite in fact. People don’t like cuts. And they always blame the messenger. If Labour are slashing in their areas local people will pin those local changes on the local council and Labour will be in an even worse place at the next election. If local people start to see other councils run by different parties are cutting less services (especially when the friendly Lib Dem turns up on their door with a handy leaflet on the matter) it will only add to that.

I’m not an apologist for Labour, but the comparisons you’ve made and the logic behind Labour cutting services, to me, don’t add up. I’ve been pretty damn anti-Labour myself for as long as I care to remember (I should be a traditional Labour voter but I can’t remember when I last cast a ballot for them), so I’m open to being convinced otherwise – but this post isn’t the ‘once and for all’ clear up on the you’d hoped for I’m afraid.

*People do the same when comparing ward level statistics, it makes me cringe. Compare the areas, but please don’t assume just because some stats in a table make the areas look similar you can directly compare them on a seperate set on numbers where they aren’t so similar.

Thank you to Mr Potter for providing this detailed comparison. I agree with his addendum – it wouldn’t be fair to extrapolate from the behaviour of Labour in Manchester to accuse Labour across the country of making unnecessary cuts.

I have one question though: as I understand it the figures for redundancies only include compulsory redundancies. What are the numbers of voluntary redundancies/early retirements like for the two councils?

@Peter: If the data are selective, are there other facts that contradict Mr Potter’s conclusions?

Hi George,

Four points:

1. Manchester Lib Dems signed up to the vast majority of the cuts (from memory, over £90 million’s worth) – are they in on the conspiracy to deliberately cut front line services?

2. Your figure for Sure Start Centres is wrong – Manchester hasn’t yet cut any, and is exploring whether transfer of management to other agencies could lever in additional income. n.b. “Using partnerships to generate additional income to maintain services” is one of the main ways that councils can avoid cutting frontline services, and yet you’ve criticised Manchester for doing this.

3, Your figures show that Manchester has to make an extra £25 million in cuts, and has made 1,730 people redundant. Once you factor in redundancy costs, this would support the idea that Manchester and Sheffield made similar efficiency savings, and that the reductions in front line services were directly linked to the level of extra cuts imposed on Manchester.

4. One counter argument for the councils boasting about making these reductions without hitting front line services (which includes Hackney and other authorities under a range of political control) is that it means that, for example, Sheffield was spending £84 million last year on things which didn’t contribute to front line services – which doesn’t say much for their efficiency!

@5

You’re quite right that it is impossible to make direct comparisons. However, I’ve done my best and, even allowing for some, not insignificant, differences between them, there’s still a substantial difference in the way the two councils are reacting to a similarly proportioned cut in funding.

And, unfortunately, blaming the coalition will work for them as yet another comparison between Manchester and Sheffield shows. In Sheffield Labour and the unions are protesting and organising demos against teh evil Lie Dem council cutting services and in Manchester Labour and the unions are protesting and organising demos against teh evil ConDem coalition for forcing the nice people on Manchester council to cut services. Unfortunately, such tactics of saying completely different things to completely different people does work – as some Lib Dems have shown in the past (not that I think it’s acceptable for them to have done so mind you).

@7

1. My position is that the councils have no choice but to deal with the cut in funding – my point relates to how they deal with those cuts in funding.

2. I’m terribly sorry, you’re correct that the surestart centres are remaining open. I’m afraid this was the one area where I got figures from a local newspaper and they were wrong. The most up to date article I could find on it was this:

http://menmedia.co.uk/manchestereveningnews/news/s/1409376_families_in_town_hall_protest_to_save_sure_start_centres_as_council_bosses_deny_there_will_be_any_closures_

It does say that they want to hand them over to communities or privatise them rather than close them and even that may be inaccurate. I’m really sorry about the mistake and I’ll try and submit a corrected table.

3. You are right that you’d expect a higher level of redundancies at Manchester, especially as they employed a lot more people to start with (perhaps this is an example of the semi-mythical “bloated bureaucracy”). This justification doesn’t extend to other areas such as libraries and youth centres though.

4. That could be a valid argument in some cases but not in this one. Sheffield already provides a similar lever of services to Manchester despite spending much less per head. If anything, it’d be Manchester that has been wasteful previously and this is one of the criticisms made by the Manchester Lib Dems as they say the council is still wasting money on non-essential capital projects.

@7

Grr, I wrote out a reply to you and somehow it disappeared just as I clicked post.

1. My point is about the difference in how they make the cuts as no council can do anything to stop their cut in funding from central government.

2. I’m so sorry, the figure I had came from a local newspaper and is clearly wrong. I’ll try and submit a corrected table as soon as possible. However, “transfer of ownership” is, in effect, privatisation and it is interesting that they’re doing this while Sheffield are keeping them publicly run.

3. Manchester employed more people to start with so you would indeed expect them to make more redundancies – they’d have no choice. However, if you look at stuff like schools and youth centres you can see a clear disparity that can’t be explained simply by the differing levels of the cuts.

4. You could make that argument in some cases but not here as Sheffield runs a near identical level of services to Manchester despite spending significantly less per head. If anything, you could accuse Manchester of being wasteful.

11. Cynical/Realist?

@8

If Labour are doing that (which is really hardly the worst if it no doubt!) then I would obviously be dead set against that too. But I still think people don’t make their voting choices that way. They make them when the nasty local council (which people seem to think exists in a bubble specifically formed to protect only their own interests) takes away their services that is what colours their views. And I’m sure there will be no shortage of rival parties pointing out just how in different areas it was done differently. Its easy to arrange protests in the way you have described as part of a strategy, but I still think the parties would know their actions on the ground will be the key decision maker for people. And if they don’t and the cuts are politically motivated then the Machester Labour party would deserve the mauling it would get for it (again, obviously just my view on it).

@10

Hopefully Manchester council will get punished for the cuts they are making. But given it’s location the tories can’t pose an effective opposition, nor can the Lib Dems given that in most northern cities they are now tainted by association. That just leaves minor parties – none of which have the resources to challenge every seat and take control of the council away from Labour. And even if that were the case, no one ever accuse politicians of being prescient. As someone running for council myself, I can tell you that most of our planning is done through a prism which is hopefully accurate of the political realities but which may well be wrong.

The data you have provided doesn’t show the changes in spending per head, or the changes in the government grant per head.

This is important because until this information is provided you do not have a case to argue.

Kevin

Apologies. The data is there, it is just at the bottom of a table, rather than a table by itself.

The cuts that Manchester has to make are 25% greater than the cuts that Sheffield has to make.

I don’t think one can necessarily conclude from this data that Labour councils are evil. They may simply be incompetent.

A LibDem seeking to exculpate LibDems by selective use of data is not the most credible witness on the planet.

What absolute rubbish! You’re using the wrong figure for Manchester’s cuts, for one thing – it’s over 20%. Also, you don’t seem to have mentioned, unless I missed it, that Manchester has made a budget for two years – Sheffield only for 2011-12. Sheffield has worse cuts to come – their Lib Dems have just left them for next year’s council because they know they won’t be in power then. And rightly so.

From June last year Manchester council was budgeting to make the cuts George Osborne had advertised in the June budget. Those cuts could have been made without cuts to frontline services. It was only in December when the council was informed that those cuts were being frontloaded. You can’t take £109m out of Manchester without it affecting frontline services.

Oh, and – nobody has been made compulsorily redundant in Manchester due to the cuts – they’ve managed to do it all by voluntary severance. Still not what the council wanted to do, but probably worth mentioning.

@16

I used the figure provided by the government. I used the same source for the Sheffield figure.

http://www.bbc.co.uk/news/uk-politics-11990047

Sheffield may indeed have worse cuts to come, just as is the case with Manchester. This is why I made my comparison for the year 2011-2012 only.

@16

P.S.

Out of sheer curiosity, why is it that you’ve closed all public toilets bar one? I’m not questioning the need to close them but surely it’d be more cost effective to close them all? One toilet will probably require the same number of staff as it would to keep two or three open so why leave one open and have to pay for a full complement of staff who won’t have enough work to do? Surely it would be best to either close them all or to keep a couple more open and share staff for them?

So let me get this right: if we can find a country whose figures are kinda, sorta similar – give or take a difference of 8% in the employment, for example – to the UK’s but where the central government is cutting less from budgets we can finally pin down whether the cuts are politically motivated?

21. Peter Copping

Manchester Politics are rather more left than Sheffield. the Lib Dems are badly split. One Councillor in my ward has left them over student finance (not surprising he is fighting a ward with lots of students!) another has signed the ‘Petition’ against the cuts and another is rabidly in favour of ConDem policies lost his fight against Labour’s Tony Lloyd last May.and is planting street trees As Simon Ashley their leader once told me being leader was like herding wild cats. But what did they do? They failed to persuade Ministers to spread the cuts over a longer period,. suggested a pay cut for all (of 5%) teachers cleaners and dinner ladies etc etc, a reduction for councillors allowances and the suspension of one of the City’s Street Festivals They complain about the losses on a fire control centre (not the Councils responsibility and GFMFRA is now Condem controlled). And moaned about the swimming pools and leisure centres (but not the libraries. or the toilets). The are now moaning about the imposition of parking charges in the City Centre on Sundays. And said there was a lot of reserves (mostly capital against some long term renewal policies ) but they did not propose the suspension of the projects (for example the Town Hall complex and the arts developments)

This hardly adds up the Mr Potter’s critique. So why are they missing this opportunity if the analysis of the political impact of the cuts by some on here is right? Someone please ask Simon.

I should mention in both Sheffield and Manchester’s case like central government the cuts/savings/reform are a programme not actual actions yet

By the way do the Condems (in Manchester their is only one Con) support Oldhams action in cutting the number of Councillors… or would that be politically disadvantageous. or in Sheffield? or an executive mayor and a small council. or on back office functions, the ending of scrutiny committees?

22. Peter Copping

Dear George 18# the toilet that is preserved is in the Town Hall complex and serves Albert Square a major site for entertainment market and other demos.and was presumably cheaper than providing temporary facilities.

If you are taken short in Manchester just ask me, and I will direct you to the Arndale Centre, and the railway stations (30p) required and there are 150 pubs and bars and lots of cafes too.and a dozen hotels! of all sorts (faites vos jeux as our French visitors say). Some of the facilities are heritage gems and other extraordinary triumphs of modern bog design.

I think our online magazine ‘Manchester Confidential’ may be offering tours soon.

23. Lisa Ansell

Re: Labour cutting frontline services.

This has to be taken in the context of Labour’s cuts BEFORE the election. By using Surestart as a badge of committment to vulnerable children(a service which is voter friendly because it is used by Middle Class children, and which is actually an early years service with little to do with child protection) Labour were cutting at frontline services year on year. And increasing the marketisation which crippled childrens services and resulted in the admin burden recently highlighted by Eileen Munro’s review.

Labour did this while demanding that EVERY local authority use a variation of the iCS computer system(again mentioned in Eileen Munro’s social work review) knowing full well the serious consequences it was having. (I was sent to a crackden with no information to make an assessmentn on 4 year old, because the computer system would not allow me to access the information- and then would not let me move onto the investigation stage, and then went down as I needed the most recent assessment- and would not allow me to read the notes on the case).

The teams I worked on faced massive cuts and recruitment freezes(which in teams with high turnover are staff cuts) from 2008 onwards when Labour were also clear that there would be little assistance for those Local Authorities who lost money in the Icelandic crash. While shouting about Surestart, Labour were responsible for overseeing year on year cuts to childrens services WHILE Ofsted inspections showed that many were quite literally no longer fit for purpose and failing deeply as a result of the lack of resources.

Labour were very careful in their pre-election material and have continued to be so since, NOT to mention Local Authorities core services in their priorities for protection.

Labour’s promise to protect frontline services was made in the full knowledge(as it has been with the Conservatives) that as purchasers of services offered by a web of voluntary and private organisations, that cuts to back room staff- far from protecting front line jobs make them impossible.

I know that the editor of this site does not believe discussing Labour cuts before the election, or the very clear way in which they have shown that local authorities and welfare will face the brunt of the cuts they are making- is helpful- But actually there are major issues about Labour’s cuts agenda.

Many Labour councils were ready with a list of the cuts they were going to make, often focusing heavily on Childrens Services, Adult Social Care, and Youth Services- within a time that it would have been impossible to make those decisions, had they truly not already intended to do it.

So far in discussion about precisely why it is that the poorest in country, and the most vulnerable, will be taking the brunt of the cuts- Labour’s assumed role as the party of opposition, has ensured that every time someone discusses the identical approach they would have taken to the conservatives- they are shouted down.

Or dismissed as radical. At one point I do believe that when someone on tiwtter whose ESA is being withdrawn, and whose housing benefit is also being cut- was saying that Labour were responsiblbe for the policies which affect them, and will be continuing with the cuts that affect them- they were told by the editor of this site- that HE was frustrated that they weren’t listening to him.

Labours pre-election promises or lack of them, showed the same gap in spending promises and what would have to be delivered as the coalition. By making the worst cuts to frontline services Labour get political capital by saying they are forced to do this by the coalition, and get the double benefit of knowing that this is basically what they were doing pre-election and would have done had they won.

While I appreciate it may upset Labour supporters sensibilities- this is in fact the cold hard reality of politics. These are the savings Labour wish to make.

How I see it, is that Manchester is being given bigger reductions in money so it will mean more services being cut. Simple.

25. Lisa Ansell

I would also like to add though- that cuts to services and retention of staff is not an indication of how a local authority is protecting services. Within the local authority the employees might actually be the social workers, and professionals, who coordinate provision of front line services, and ensure that statutory duties are being met. And while the provision of certain services can be done outside the local authority, and this may make them easier to cut as they will be provided by others- the jobs within the local authority may not be jobs that can be done outside. And it does in fact sometimes make sense to protect jobs within-rather than services provided.

26. Robin Levett

I’ve read your post; what I don’t see is where Sheffield’s cuts actually are. They’ve cut £84m; if they’ve not shut libraries etc, then what have they shut?

Again, what is the position on reserves?

Is the schools grant taken out of the figures?

What is Sheffield’s position going forward? This:

“Sheffield may indeed have worse cuts to come, just as is the case with Manchester. This is why I made my comparison for the year 2011-2012 only.”

is disingenuous in the extreme. Councils know their grant settlements for two years. We know what Manchester are doing in 2012-13 to match their funding; we don’t know what Sheffield are doing, and the supicion is that they will have to make far more swingeing cuts next year than this, in part because they haven’t made cuts this year. The 2011-12 budgets are therefore simply not comparable.

Hi Lisa,

“I know that the editor of this site does not believe discussing Labour cuts before the election, or the very clear way in which they have shown that local authorities and welfare will face the brunt of the cuts they are making- is helpful”

If you’d like to send an article – c. 500 words, on this subject to donpaskini AT liberalconspiracy DOT org , then that would be very welcome.

@23

But Manchester still has more to spend per head than Sheffield despite having a smaller population. Not so simples.

@25

My understanding is that Sheffield isn’t shutting anything. Their savings come from elsewhere. Unfortunately I don’t have any details of those as I was focusing on front line services as those are what I believe to be the most important measure of how a council deals with the cuts.

“Again, what is the position on reserves?”

I don’t know.

“Is the schools grant taken out of the figures?”

Not as far as I’m aware. The grants figure is each council’s self-published figure for the total amount of government support they receive.

I’m afraid that I only looked at the next year as that is a) the one for which the figures will be the most accurate and b) it took me five hours to compile the figures for 2011-12 – I simply don’t have the willpower to stick my head back in the morass of documents, downloads, statements, minutes and broken links that pass for council websites.

29. Lisa Ansell
30. Lisa Ansell

http://lisaansell.posterous.com/response-to-polly-toynbees-piece-in-guardian This was a response to the same problem coming from our more mainstream media.

31. Lisa Ansell
32. Lisa Ansell

I would however write a post about how the concept of ‘blue labour’ ensures that Labour can maintain their current position and how this distances them from the anti-cuts ‘movement'(such as it is)

“I would however write a post about how the concept of ‘blue labour’ ensures that Labour can maintain their current position and how this distances them from the anti-cuts ‘movement’(such as it is)”

Yes please 🙂

34. Robin Levett

@George W Potter #26:

“My understanding is that Sheffield isn’t shutting anything. Their savings come from elsewhere. Unfortunately I don’t have any details of those as I was focusing on front line services as those are what I believe to be the most important measure of how a council deals with the cuts.”

But if the effect of relying upon one-off cuts elsewhere this year is that the only place left to cut next year is front line services, and your salary costs haven’t changed from before you started the process, next year is going to be far worse than this. Because you have not identified where and how Sheffield was cutting this year, so as to guess (we have to – because unlike many, if not most, councils Sheffield is budgeting year by year) where the axe will fall next year, your analysis tells us very little.

“I’m afraid that I only looked at the next year as that is a) the one for which the figures will be the most accurate and b) it took me five hours to compile the figures for 2011-12 – I simply don’t have the willpower to stick my head back in the morass of documents, downloads, statements, minutes and broken links that pass for council websites.”

As for a); for Sheffield maybe, because 2012-13 is up for grabs; but Manchester has set a 2-year budget. As for b); if that’s what it takes to produce a useful comparison…

Skimming the Sheffield 2011-12 budget report (you’ve read, it, I take it), however, I notice that proviso is made for £15m redundancy costs, which will result in annual savings of £50m (para 64, bottom of page 16). You’ve quoted 270 “redundancies”; which on those figures work out as costing rather over £55k each, with each redundancy producing an annual saving of rather more than £185k. This seems…surprising.

35. Flowerpower

Although George W Potter has made a brave stab at introducing some honesty into this debate, he has himself, alas, fallen for one of Labour’s most popular propaganda tricks.

The table above says that Manchester is facing “cuts” of £109m.

But these “cuts” are NOT the difference between either what was spent in 2010/11 and what will be spent in 2011/12, nor even the difference in income between those two financial years.

The £109m is the difference between Manchester’s planned spending for 2011/12 and the actual resources it will have available for that year. It is a completely arbitrary figure based on “planned spending” of more than £678million – a figure far higher than it could ever hope to be realistic and far higher than it has ever had before. It might as well have plucked it out of thin air.

A better comparison would be between Manchester’s Total Available Resources for the two financial years in question. TAR takes account of government grants + council tax receipts + income from assets (e.g. Manchester Council owns Manchester Airport and gets a dividend from it) + reserves.

Here are the figures:

Manchester TAR 2010/2011 – £549,571,000.

Manchester TAR 2011/12 – £581, 456,000.

Source: Manchester City Council website

So, in fact, Manchester will have c. £30 odd million MORE to spend next year. Okay, these are cash figures, so inflation will be an issue, but the “massive cuts narrative” is once again exposed as total baloney.

Maybe I’ve missed something, but did you write this analysis without including any figures as to how much each local authority is having cut from its budget?

I smell a rat. Considering Sheffield is less reliant on the government grant and more on council tax it would definitely make sense that Manchester is facing bugger. But you don’t include the figures or even allude to them.

*”facing bigger [cuts]” not “facing bugger”

although they make well metaphorically be facing ‘bugger’ as well I suppose

38. Robin Levett

@FlowerPower #34:

Where on the Manchester CC website did you get those figures? The figures in the report to Council on 16 Feb 2011 suggests that your figures are wrong:

http://www.manchester.gov.uk/egov_downloads/LocalGovernmentSettlement2011-13.pdf (see page 4)

It is true that the reserves are not in that calculation – but since each year they are drawn upon, they can’t provide the increase in resources which your figures show.

This is a rather bizarre allegation given that Labour holds all but one of the Manchester seats already, and the other one is highly likely to switch back next time anyway, so I don’t really see what the alleged political gain would be.

@Jon

“Maybe I’ve missed something, but did you write this analysis without including any figures as to how much each local authority is having cut from its budget?”

I’ve included a percentage cuts figure if that’s what you mean (that figure relates to the cut from central government) but I don’t have an actual figure for each one, just the percentage.

Why is this even being posted on a supposedly left-wing blog?

42. Flowerpower

@ 37 Robin Levitt

Where on the Manchester CC website did you get those figures?

The link you yourself provide contains the figures.

TAR for 2010/11 is in table 1. on p4. (£549,571,000)
TAR for 2011/12 is in table 4. on page 9. (£581,456,000)

The figures in the report to Council on 16 Feb 2011 suggests that your figures are wrong

Nope. They’re correct. The mistake you have made is to look only at Table 1. where the 2010/11 figure is the correct one but the 2011/12 figure is a guesstimate from the Medium Term Plan. Table 4 on p 9 updates this figure in the light of the actual Financial Settlement and is, therefore, the correct one.

Couple of things that nobody’s yet noted. 1) You don’t really deal at all with the fact that Manchester’s unemployment rate is 8% higher than Sheffield’s (60.1% as opposed to 68.7%) which will have a huge impact on demand for services and council housing.
2) Manchester as administered by the City Council may well have a smaller population than Sheffield, but the Greater Manchester Urban Area contains over two million people, many of whom will use services paid for and provided by MCC.
These two things, combined with the 25% higher cuts figure would tend to lend more credence to the view that these cuts are not a political choice.

44. Robin Levett

@Flowerpower #41:

“The link you yourself provide contains the figures.

TAR for 2010/11 is in table 1. on p4. (£549,571,000)
TAR for 2011/12 is in table 4. on page 9. (£581,456,000)”

This was your mistake; using figures from two different tables incorporating different assumptions and numbers.

Read para 15:

“Direct comparisons of the Council’s resource capacity after the final settlement
with previous analysis is not easy as many previously received specific grants,
that would have been included within individual cash limits, have been rolled
into the general grant settlement, rolled into other grants (eg Early Intervention
Grant) or ceased altogether. There remains some uncertainty over a number
of smaller grants where detailed announcements are awaited. The officers’
assessment of the overall resource position shows an overall and future
worsening of the resources available of almost £60m over the next two years,
compared with the assessment which was undertaken immediately following
the CSR.”

and Table 3 at para 16 which shows a reduction in TAR of c£64m from c£490m to c£426m.

What should have given you a clue is that the calls on resources in Table 4 are stated significantly higher than those stated in Table 1 (by £86m for 2011/12). I would surmise that the Table 4 calculation includes both the expenditure within the departmental cash limits which had been directly grant-aided and the offsetting grant associated with those expenditures, having the effect of increasing both numbers from the 2010/11 baseline.

Robin @ 43

No, Flowerpower is right. The figures he uses aren’t based on assumptions, they are the equivalent of outturn. The first represents the actual resources available in the last financial year, the second is the final version for the about to be current year – superseding all previous estimates.

The para 15 you quote is right to say that comparisons are difficult – with various old grants being rolled into formula and new ones created – but I suspect that is precisely why Flowerpower chose to use Total Resources as his preferred measure.

The size of government grant support, for instance, could be affected by a school becoming an academy and the council seeing a corresponding reduction in DSG. Also, what you say about the call on resources shooting upwards does rather confirm Flower’s point about the cuts figure really representing a shortfall between money in the bank and some pretty wild and arbitrary wish last rather than cuts in previous expenditure.

46. Robin Levett

@Lawman #45:

“Also, what you say about the call on resources shooting upwards does rather confirm Flower’s point about the cuts figure really representing a shortfall between money in the bank and some pretty wild and arbitrary wish last rather than cuts in previous expenditure.”

Nope; Table 3 includes both the 2010-11 outturn TAR and the 2011-12 projected TAR (on the basis of the published Government figures); and these show a reduction of £64m. Para 15 makes quite clear that the MTFS figures (Table 1) do not include grants (and expenditure) already in the directorate budgets.

To clarify that; there are grants tied directly to directorate level spending. In the MTFS, neither those grants nor the related expenditure are included. The directorates’ cash-limited budgets in the MTFS cover what isn’t paid for out of those grants. Table 4 seems to include all of those grants, and the related expenditure, so both figures go up, with no net change in the shortfall.

The fact that the calls on resources *for the same year* go up between Table 1 and Table 4 doesn’t show that one set includes a wild and arbitrary wish list, but that the figures are compiled on a different basis. Bear in mind that Table 4 was the one that was compiled after the Settlement, and contains the higher figures.

Since the figures are expressly not comparable, it is for Flowerpower to explain what relevance they have.

47. Flowerpower

Robin Levitt @ 46

it is for Flowerpower to explain what relevance they have.

I have already explained their relevance.

To restate: Labour and various anti-cuts campaigners like to pretend that Manchester is being forced to cut its spending by £109 million.

The implication is that either the government has reduced the funding it gives to Manchester by £109 million and that last year Manchester spent £109 million more on services than it will this year.

Neither of those implications has any basis in reality.

As you yourself seem to recognize, the government has NOT reduced the grants it provides to Manchester by anything like £109 million.

The specific relevance of looking at the outturn “total resources” figures is that this figure gives a true account of what Manchester has to spend in any given year.

Your “calls on resources” figures are what I said they were: wild, unfeasible wish-list figures that are much higher than Manchester has ever had to spend before and therefore completely out of the question in a time of cutbacks and austerity.

Why then does Manchester publish a fantasy budget of this sort that is so totally out of keeping with both past experience and reasonable expectation for the future?

The only answer I can imagine is so that it can say “hey we are cutting £109 million” from “planned expenditure”. Fact is, they should never have planned to spend that much in the first place.

48. Robin Levett

@Flowerpower #47:

“The specific relevance of looking at the outturn “total resources” figures is that this figure gives a true account of what Manchester has to spend in any given year.”

Indeed; but these show a reduction (see table 3), unless you choose to compare figures drawn from two different tables prepared on different asumptions. It was the relevance of those figures, as distinct from the Table 3 figures, that I was questioning.

I am not an apologist for Manchester CC; I would though like any criticism made to be solid and well-founded, and yours (and the OP’s) so far seems not to be. There is a table which shows comparably-calculated figures which shows a significant reduction, albeit not of £109m; you have however chosen to ignore that table and to base your claim on comparing incomparable figures. Why?

49. Robin Levett

@Flowerpower #47 contd:

To clarify – Table 3 sets out the governmental contribution to TAR on a comparable basis, includign 2010-11. The figures in table 4 for Governmental contribution match those in Table 3 barring £3-4m. The difference is pretty close to the same in each year (a little short of £4m), but I haven’t identified what it represents.

The non-Governmental contribution to TAR is obviously pretty consistent year to year; it is Council Tax, plus dividends, plus contributions from reserves. Council Tax doesn’t vary significantly year to year if you don’t increase it, since they’re not making any new land; and contributions from reserves are a balancing figure. The reserves themselves aren’t going to be increasing when you’re drawing them down. Dividends equally aren’t going to be varying wildly – prudent investments don’t, by their nature.

The £109m figure is the figure for savings to be made in 2011-12 (see Table 4 and paragraph 18). That is up from £60m budgeted in the MTFP to be cut (see Table 1). Note though that the Business Plan objectives in the MTFP don’t reflect any “wild” increases in spending – the increases are less than inflation.

The MTFP itself shows a budgeted surplus for 2010-11; the deficits for the subsequent years, to be filled by savings, are created by (i) assumed reductions in resources (the largest proportion) (ii) increases in levies (above inflation) (ii) increases in contingencies (above inflation), and very little by (iv) increased spending (well below RPI inflation). (i)-(iii) are outside the Council’s control. This is of course all reflected in both Table 1 and Table 4, looking at the tables individually. There has been no spending spree.

This:

“Your “calls on resources” figures are what I said they were: wild, unfeasible wish-list figures that are much higher than Manchester has ever had to spend before”

is untenable on the basis of the actual figures.

50. Flowerpower

Robin Levett @ 48 & 49

I don’t know if you are being willfully obtuse, but I’m going to give it one more go.

you choose to compare figures drawn from two different tables prepared on different assumptions

The reason that I chose the two particular figures, one from Table 1 and the other from Table 4 is because they are the ONLY figures that are NOT based on assumptions. They are REAL figures. As Lawman rightly remarks they are the equivalent of OUTTURN figures.

Specifically: the TAR in Table 1 for the year 2010/2011 was arrived at early in 2010 when the Council got its settlement for that year. It was then able to add in its revenue from other sources (dividends, council tax etc) and arrive at a total resource figure for that year. It was not an estimate, a projection but a TRUE figure.

The TAR from table 4 for 2011/12 was chosen for the same reason. Unlike all its predecessors in the document, this figure was the outturn figure produced in Feb 2011 when Pickles announced the settlement. Again, it is not a projection or estimate but a TRUE outturn.

I have therefore compared true outturn with true outturn.

Why did I not use the 2010/11 figure in Table 4? Simple, this was not a TRUE figure but an illustrative figure showing what the 2010/11 figure would have looked like if all the many changes to grants and allocations made in recent months had applied in the previous financial year.

In short, not a REAL number at all. Indeed, it could not have been calculated before Feb 2011 (when the settlement was made and all changes announced), even though it applies to the previous financial year!

What has happened since last June is that there have been many changes in the way councils are funded, with some grants being abolished, others rolled into formula grant etc. and other new grants coming on stream.

These changes make comparison difficult. One cannot, for instance, meaningfully compare Formula grant for 2010 with Formula grant for 2011 if the very definition of Formula grant has changed in the interim.

Therefore, the ONLY meaningful comparison that can be made is between outturn TOTAL resources. This is a measure of how much the council REALLY had to spend – i.e. the sum of all funding streams whatever they may be – in 2010/11 and how much it had to spend – again from all sources – in 2011/12.

These figures, I stress again, are not based on “assumptions” and are not calculated on different bases. The basis of their calculation is simple addition: Government grants (however constituted) + council tax income + dividends + reserves + any other revenue.

51. Robin Levett

@Flowerpower #50:

“The reason that I chose the two particular figures, one from Table 1 and the other from Table 4 is because they are the ONLY figures that are NOT based on assumptions. They are REAL figures. As Lawman rightly remarks they are the equivalent of OUTTURN figures.”

The 2010-11 figure in Table 1 is drawn directly from the MTFP. The MTFP was written in 2009-10. You were saying?

More importantly; I use the word “assumption” in an accounting sense. *All* accounting figures incorporate assumptions.

The point about the difference between Table 1 and Tables 3 and 4 is that between the dates the tables were produced the Government changed the way it was paying grants. The Table 3 2010-11 figures calculate the grant in the new way expressly so it can be comparable to the subsequent year’s figures.

This:

“Why did I not use the 2010/11 figure in Table 4[I think you mean Table 3]? Simple, this was not a TRUE figure but an illustrative figure showing what the 2010/11 figure would have looked like if all the many changes to grants and allocations made in recent months had applied in the previous financial year.”

is wrong. It is not an illustrative figure; it is a different accounting treatment of the same underlying figures. It is not changes to grant figures, but changes to the way grants are paid, that are brought into account.

Try a different tack: Say my headline salary is £20,000, and during that year I spend £500 on my employer’s products, and the following year my headline salary is £19,500, I still spend £500 on my employer’s products but my employer gives me £400 in vouchers to spend on those products, has my income (a) gone down, (b) gone up or (c) stayed the same, in absolute terms?

If a local authority one year receives £100m grant centrally, with another £25m in grants paid directly to individual core council activities within different directorates; and the next year receives £120m centrally, but nothing in grants paid directly to individual core council activities within different directorates; has its government support (a) gone down (b) gone up or (c) stayed the same, in absolute terms?

I am beginning to think that you are being obtuse. You insist on comparing figures that are quite simply not comparable, and refuse to use figures adjusted expressly so that they can be compared. Oddly, the figures you insist on using support your argument, but the others don’t.

52. Flowerpower

@ 51

The 2010-11 figure in Table 1 is drawn directly from the MTFP. The MTFP was written in 2009-10. You were saying?

From the Report to council dated 3 March 2010

The report to Executive noted a figure of total resources available of £548.914m in 2010/11 based on a nil increase in the City’s Council Tax and the utilisation of £1.853m from the parking reserve, £5.54m of dividends receivable from the Airport and joint ventures and £120,000 from
the Planning Delivery Grant reserve. The total included £342.438m government support through the Revenue Support Grant (including Manchester’s share of the NNDR pool) and £58.749m of Area Based Grant.

2.2 Total proposed spend against these resources was £550.129m which left a required contribution from the General Fund Reserve of £1.215m which would be used towards meeting one off costs of £1.757m within the budget for
2010/11.

i.e. the final TAR for 2010/11…. as I said.

More importantly; I use the word “assumption” in an accounting sense. *All* accounting figures incorporate assumptions.

Hokum.

53. Flowerpower

,,,,oh ….and your 2 questions:

Say my headline salary is £20,000, and during that year I spend £500 on my employer’s products, and the following year my headline salary is £19,500, I still spend £500 on my employer’s products but my employer gives me £400 in vouchers to spend on those products, has my income (a) gone down, (b) gone up or (c) stayed the same, in absolute terms?

If a local authority one year receives £100m grant centrally, with another £25m in grants paid directly to individual core council activities within different directorates; and the next year receives £120m centrally, but nothing in grants paid directly to individual core council activities within different directorates; has its government support (a) gone down (b) gone up or (c) stayed the same, in absolute terms?

Gone down… in both cases. Not problematic is it?

54. Robin Levett

@Flowerpower #53:

“Gone down… in both cases. Not problematic is it?”

Indeed. So you now accept that Table 3 is accurate and that Manchester’s total government support has indeed dropped between 2009-10 and 2010-11? Just as Wandsworth’s has?


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