Tonight I will be attending the budget meeting of Liverpool City Council. I have great sympathy with all the councillors present tonight and indeed across the country – especially those that control councils. We have all been stuck in an impossible position because of the blunders of Laurel and Hardy (more on them tomorrow). Everyone in local government, at least in theory accepts the need for cuts in budgets. We all thought that it would be better to take the 28% cut in 4 equal bites which would have enabled us to minimise cuts in service by maximising efficiency.
We should all be grateful to NLGN whose report clearly shows how bogus are the views of Pickles and Shapps about efficiency gains. Even if they were maximised (and most councils are already very efficient) it would not begin to deal with the 28% cuts that we will receive in our budgets over this year and the next 3.
However I believe that Labour is not being honest nationally about the causes of the problems and the long-term actions that they would take.
Firstly why are we doing what we have to do? Labour tells us that it is because of an international financial crisis. Partly true but they ignore two things. This crisis was largely manufactured in Canary Wharf and Wall Street because the last Government were content to allow to continue the deregulation of the banks started by the Tories. Less regulation meant more and unwise speculation. This is a crisis that need never have happened. The crisis is worse in this country than even in Greece and the Irish Republic. Why? Because not only is the Government deeply in debt but so is the population generally. I don’t know what £1.5 trillion looks like but that is how much we owe the banks on unsecured debt. When Vince Cable warned about this he was scoffed at by Labour and Tory alike and described as Doctor Doom!
Secondly, what does this mean in the long term? Well Labour made it quite clear that they were injecting extra money into the public sector to avert the very real chance of a depression. In other words they knew that what they were doing was unsustainable. I will not query that because Lib Dem and Tory Parties supported them at that time. So Labour borrowed heavily and we still are at the rate of £400 million a day. Labour knew that this had to end. In their Pre Budget Report in 2009 they told us that they would make cuts over the life of the CSR which would only be 1.5% different in total than the budget of the present government.
It’s important that we understand this if we are to make intelligent and rational choices about what to do next. After all the cuts are made in 2015 the UK will still be spending 41% of our budget on the public sector. That is nearly an all time high and the same as the Labour Government spent in 2006/07. So the message is clear both locally and nationally. If we want to expand our services or even deal with the increasing problems of the frail elderly and increased birth rate at the same level we need to do things fundamentally differently.
At this stage I must say that I think both central and local government are not doing enough on this agenda. The Total Place reviews showed conclusively that if we deconstructed the way that we provide local services and reconstructed them we could easily make efficiency saving of up to 20%. The Government has accepted this in principle and agreed a work stream which it described as community budgeting in the field of families with complex needs. What has become of that activity? No-one knows. No lessons seem to be coming out of it to councils, PCTs, Police etc who are not in the pilot areas. No lessons about the generalities of partnership are flowing out of them which could be picked up in other areas of service delivery. No thoughts appear to be had about other areas which could enter the community budgeting process such as bed blocking by the elderly or the prevention of re-offending.
Total Place is the place to be. Not spewing out half truths about efficiency savings. Not attacking central government for doing what any government elected in May last year would have had to do. It’s where we should be coming together but I detect few signs in any Party at any level of government that cross silo, cross agency working is really understood to be the way forward to save our front in delivery