Unkind cuts, by Heather Wakefield

Sorry to be a party-pooper, but this has been another of ‘those’ weeks in Unison’s local government section – an increasingly familiar week, in which our ‘Jobs Watch’ tracked the relentless rise in council redundancies and news landed of a proposed end to facility time for many of Unison’s lay representatives in Lancashire and Essex.

Service users everywhere have continued to be hit hard too, with more confirmed day centre closures, increases in charges for home care and meals-on-wheels, more library cut-backs. You name it, it’s being cut in a council near you!

As if by magic, the real causes of the recession and their knock-on effect on our public debt have been rubbed off the whiteboard of history and now the public sector, not the greedy, imprudent banks have to pay the price.  While more and more people are seeking councils’ help, all the talk in local government circles is of ‘Easyjet-style’ charging, what they can stop doing and whether it really is the role of councils to collect the rubbish and care for the elderly?

Nowhere is more representative of what’s happening in Cameron’s Cuddly Councils than in Nottinghamshire. (And in case anyone feels I’m being just a tad too party political, the Conservatives control 26 of 27 county councils in England and more than half the unitaries and mets, so that means most local government services.) A leaked report this week told of £33m pounds to be slashed from the Nottinghamshire County Council budget this year and a total of £85m over the next three years, leading to a string of cuts and closures too lengthy to detail fully. But here are just a few…

£10.5m from services to the elderly and disabled, including an end to the Dial-A-Ride service, closure of four day centres, increased charges for day centres, transport, and meals-on-wheels and the sale of 13 residential care homes. Meanwhile, employees face pay cuts ranging from £2000 – £8000 a year, a three-day reduction in annual leave and lower essential car user allowances. And if losing your job isn’t bad enough for the 500 to be ‘let go’, the redundancy agreement is to be cut by a third.

So why is this happening? The chief executive says it’s because of increased demand for services, the desire for quality and ‘the worst recession in a generation’. But that’s not the whole story. The other bit of the jigsaw not being talked about so much is Nottinghamshire’s decision to freeze council tax – a move probably happening in a council near you. It’s one which Unison has identified as the cause of many cuts and redundancies in Nottinghamshire and elsewhere. Let’s just look at council finance in England over the last few years.

It’s important to look at what’s happening now in the context of the boast by the Local Government Association that councils have already saved 50% more in so-called ‘efficiency’ savings than required by central government in the last few years. That means redundancies and cuts. Of course, there was the Icelandic bank crisis for the imprudent few and the recession certainly has dried up income for some from parking, land search and planning fees, but certainly not all. Low interest rates mean that councils can borrow cheaply too. So what else is going on? Unison’s local government finance expert has been looking carefully at overall figures in England and opening the books of a growing number of individual councils. And this is what he found.

In the last three financial years English councils have added £262m (2006/07), £217m (2007/08) and £33m (2008/09) to their unallocated reserves. In the ten years since 1999, there have been huge increases of £1.3bn in schools reserves, £5.6bn in earmarked and £1.3 billion in unallocated reserves. That’s growth of 245%, 147% and 62% respectively, which is interesting in itself. Incidentally, that growth coincides with the decline in local government pay and conditions relative to the rest of the public sector and – as we’ve seen – increasingly swingeing cuts and increased charges.

Even more interesting is the fact that in every year from 2003/04 to 2007/08, English councils have budgeted on the basis that they will need to draw on their reserves in order to balance their books. However, when the outturn figures have been published, they have actually added to them – as we’ve seen above. In 2007/08, councils in England forecast a reduction of £890m in reserves, but in fact, they increased them by £1.5bn.

In the grimmer financial background of 2008/09, English councils budgeted on the basis that school reserves would fall by £35m, earmarked reserves by £927m and unallocated reserves by £231m. So what happened? School reserves did fall – by more than predicted, by £142m, rather than £35m.  In contrast, unallocated reserves were up £47m and earmarked reserves by £345m. That means that school reserves currently stand at £1.9bn, earmarked reserves at £9.4bn and unallocated reserves at £3.4bn.

So there is a lot of money around, but let’s just delve a bit further and take a look at council tax. Everywhere we look councils are deciding to freeze council tax in a sprint to the bottom, which includes Labour and Liberal Democrat councils too. This is a move that will create a big hole in councils’ budgets because government assumes that council tax will rise. And that hole is giving rise to many of the cuts to services, jobs and pay and conditions across local government in England.

Unison took a very close look at a small district council in Sussex threatening all sorts – from ceasing to be part of the Local Government Pension Scheme to cuts to everything. That council changed its three-year 3.5% council tax increase assumptions in its 2008 Medium Term Financial Plan to 3% for 2009-10 and 2.5% from 2010-2011. In its revised plan in September this year, it assumed frozen council tax levels from 2010-2011. So what will be the result?

By 2010-2013, the annual saving to individual households will be a mere £18.99 for Band D council taxpayers. And for those in the lower bands, the savings will be even smaller. But these small savings – for the better off only – will impact hard on services and jobs.

In his speech to the Conservative Party conference this year, Shadow Chancellor George Osborne promised that if councils found enough savings to reduce their council tax increases to 2.5%, a Conservative central government would provide funding to counteract the rise and make it zero. Is that’s what’s happening here in anticipation of a Tory general election victory?

Who knows, but what is certainly happening is a massive attack on key public services – especially for the elderly, disabled and for children. They will have disastrous consequences, especially for those who can’t afford to buy them or pay increased charges. The loss of local government jobs will wipe millions of pounds out of local economies too, making the recession even harder to counteract, with little cost benefit to the Treasury.

Let’s give the last word to Cathy Helliwell, aged 73, wheelchair-bound, day centre user and resident of Nottinghamshire County Council. Once a low-paid, council meals-on-wheels worker, Cathy is facing large increases in charges for the services she uses. This is what she has to say: ‘If they raise the charges, I don’t know if I’ll be able to keep going. We’re all on limited incomes. I will be left with only half a life.’  The other half of Cathy’s life is the price of the Tories’  quest for the small state through council tax cuts for the middle classes, redundancies and an end to essential services. Is this the ‘new era of local government’ you talk about Mr Cameron? God help us all.

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Tags: Economy, Local government