Clearly today was going to be a very difficult day for any government elected on May 5th. We have been expecting the worst since last November when the Labour Government in its Pre Budget review announced £72 billion of cuts from 1st April 2011. Central government finances have been put in tatters because of borrowing to meet the financial crisis a day of reckoning was inevitable.
The key elements of this CSR for councils relates to fairness. Is the settlement fair to local government, the services it provides and the people it serves. The result is not yet entirely clears but is likely to be no.
What is definitely clear is that local government, the most efficient part of the public sector, will have to shoulder cuts of 27% in grant support from central government over 4 years. This is the biggest spending cut in government. We have to ask whether the Secretary of State is up to the job or perhaps more to the point whether he thought his job was currying favour within the Cabinet rather than defending the sector inside the system. We should also recall that a 27% cut in grant is not the same as a 27% cut in spending. Local government raises money also from council tax and ‘sale’ of services. This means a more manageable average of a 15% cut over four years.
Averages, however, can be deceptive. If the cut in support is made uniformly poor areas will disproportionately large hit because they are more dependent on grants than wealthy areas. This is one of two areas where I am asking for an urgent discussion on our behalf with Nick, Danny and Andrew Stunell.
Having said that there is much that we can be satisfied with given the difficult circumstances we face:
- £16 billion for school capital programmes which will replace all but 100 of the schools removed from the discredited BSF programme.
- Growth in real terms for schools revenue spending
- The pupil premium announced last week which provides for the most disadvantaged families
- £2 billion more for social care within the NHS which will assist our stretched budgets.
- £6 billion in cuts to the Whitehall bureaucracy
- Free travel retained albeit being linked to retirement age by 2020
- Large capital programmes to boost local economies largely kept in place
So some really good stuff but we should not try to disguise the difficulty of the decisions which we will have to take and which we will not want to take.
That leads to me to my second reason for asking to meet Nick, Danny and Andrew. Place based budgeting was not high enough at the agenda. 16 pilots have been given the go ahead to establish joined up budgets around families with complex needs. But this most only be the start. If we are to make major savings and not major cuts we need to create order and efficiency within all the public spending within our areas as was clear from the Total Place pilots.
In my opinion the Government have broadly made as good a job of the difficult circumstances. At all times we must challenge the Labour Party, “If you don’t like our cuts where would the £72 billion axe which you told us about have been wielded?”