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Local government spending settlement and Kerslake Report set to radically change Council

Local government spending settlement and Kerslake Report set to radically change Council

🕔04.Dec 2014

If you thought times have been tough for local government in recent years, think again. The Chancellor’s Autumn Statement puts the Government further along the path of dismantling the public sector as it has existed for seventy years, argues chief blogger Paul Dale.

George Osborne knows that he is on pretty safe ground in attacking two of the country’s favourite bogeymen – the banks and town halls.

Bankers, with their hefty bonuses and responsibility for triggering the credit crunch, are easy game.

But so, too, are local councils. For however unwarranted it may be, most voters if they have any view at all about local government inevitably think of waste, inefficiency and quite possibly incompetence.

Unfair, yes. But that’s the way it has always been and probably always will be.

At the heart of the Chancellor’s Autumn Statement lay a continuing attack on the very fabric of local government. With budgets for the NHS, social care and overseas aid largely protected, councils will continue to take the brunt of Mr Osborne’s axe.

Spending on UK public services and administration in 2019-20 will fall to the lowest level as a proportion of GDP since the Second World War. Incredibly, some 60 per cent of the savings deemed necessary to repair the country’s broken finances are still to come in the next parliament.

Public spending in 2019-20 will be frozen under the current plans. This is equivalent to £14.5 billion in departmental cuts.

So don’t worry about what’s happened so far. You ain’t seen nothing yet.

The question has to be asked: is anyone listening and does anyone really care?

Sir Bob Kerslake, permanent secretary at the Department of Communities and Local Government, noted recently that most councils have managed to avoid cutting front line services because they have been able to deliver the necessary savings by performing more efficiently.

Efficiencies have been delivered mostly through mass redundancies of council workers.

In Birmingham for example, the city council workforce has fallen dramatically from about 20,000 before 2010 to less than 10,000 now, with forecasts of about 7,000 by the end of the decade. This was inevitable for an organisation based almost entirely on human resources – the only way to make big budget cuts is to make big cuts in staffing.

Between 2010 and 2018 Birmingham council expects it will have cut about £800 million from its revenue budget and is struggling to identify savings of about £150 million next year.

If the measures set out by Mr Osborne are pursued after the General Election, a million more public sector jobs across the country will disappear during the lifetime of the next parliament. This is more than twice the 400,000 public sector jobs lost since 2010.

And yet, despite the heaviest and most sustained attack on public spending since Hitler was breathing down our necks, most local councils have been able to carry on in much the same way as far as service delivery is concerned.

Sir Albert Bore, the Labour leader of Birmingham city council, has become famous for forecasting ‘the end of local government as we know it’ and for his warning that a salami-slicing approach to cutting spending will no longer work.

But as things stand, council budget cuts since 2010 have been largely based on so-called salami slicing. There has not yet been the type of wide ranging strategic approach or zero-based budgeting required to make the council fit for purpose in a brave new world of public sector retrenchment.

Most Birmingham inhabitants coming into contact with the council will have noticed little in the way of changes or cuts. The bins are still emptied weekly, for now at least, the streets are still cleaned and it was noticeable that as soon as complaints about the cleanliness of the city centre were raised the council’s Labour leadership found a further £1.5 million from somewhere to pay for additional street cleaning patrols.

Leisure centres, swimming pools and community centres are still in business along with council offices strewn across Birmingham. The council is even in the process of building new swimming pools, although the management of these facilities will be outsourced.

The city’s parks are as good or as poor as they ever were. A £4 billion plan to transform public transport in Birmingham with new metro routes and sprint bus services has been published and the council has been able to identify £700 million to kick-start the Birmingham Connected strategy.

So, where are the cuts? As Sir Bob Kerslake explained, most of the pain has been absorbed in the traditional local government way of muddling through and shedding staff. This of course leaves far fewer staff to do the same amount of work, which raises questions about the level of town hall staffing in the first place.

It would however be stupid to assume that the scale of public sector cuts envisaged by Mr Osborne over the next five years can be achieved without consequences for service delivery. Much will depend on how successful councils are in farming out non-statutory services such as leisure, sport, museums and the arts to trusts, mutual companies or to be run by volunteers.

Here in Birmingham the council’s 2015-16 budget may be an indication not of the end of local government, but perhaps of the end of the beginning of the end of local government as we have known it.

The very real prospect of restricting opening hours at the Library of Birmingham will be symbolic.

Opened only a year ago and built at a cost of just under £200 million, the library was financed entirely by the council – mostly through loans. The building was praised as an example of what local government could achieve even in bad times. The brutal truth is that the skids were under the library even as celebrity guests sang its praises. Running costs were never properly factored in and the council is left with the task of paying off the capital debt over the next 50 years or so.

District committee budgets are to be cut significantly. Under the council’s commitment to devolution these committees are responsible for running community libraries. Some committees may choose to close libraries or reduce opening hours, or they may cut other services to protect the libraries. One way or another, the public will begin to notice a difference.

Sir Albert Bore delivered his usual plea for more money for Birmingham following the Autumn Statement. But it is difficult to imagine that Mr Osborne, or indeed Communities Secretary Eric Pickles, are in the mood to hand favours to Birmingham.

Specifically, Sir Albert would like £123 from the Government over the next three years to boost the city’s failing children’s social services department. If he doesn’t get it, the council must find £123 million from within its own dwindling financial resources.

Responding to the Autumn Statement, Sir Albert said: “This statement includes lots of pre-election announcements for projects across the country but does nothing to address the financial crisis facing our local services.

“There are no changes to next year’s funding for local government, which will see cuts of over £100m in Birmingham alone.  And there is now the threat that cuts will continue at the same pace for a further two years.  The Government needs to wake up and realise the damage that is being done to local public services in this country, before it is too late.

“Added to the pressure on our social care services, further cuts will make it impossible to maintain non-statutory provision and further reduce the quality of statutory services.  But our greatest concern is for the children that need our support and care”.

With the Kerslake Review into Birmingham council’s governance competency due out next week – and a radical approach to the future is predicted – we may well be entering the final phase of the end of local government as we know it, for Birmingham at least.

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