MORE than £100m of further spending cuts – and an extra 1,000 job losses – are about to strike North-East town halls, a bleak study warned yesterday.
The day after council chiefs in Newcastle unveiled plans to cut £90m, gloomy local authority leaders raised the alarm over fresh “stealth cuts” planned by the Chancellor, accusing the Government of breaking a promise that no further pain would be inflicted.
They set out a grim future when local councils will have no money to do anything other than provide care for the vulnerable and collect the rubbish.
Simon Henig, the Labour leader of Durham County Council, said: “We are talking about whether we can cut the grass and patch up the roads to avoid pot holes, as well as about our leisure centres and our libraries.
“It will come down to a choice between those things and maintaining our spending on social care for vulnerable children and adults. That’s what’s going to happen to all the councils in our region.”
North-East MPs, who were presented with the study by the Association of North East Councils (Anec), at Westminster, vowed to press the Government to step back from the brink.
But Durham City MP Roberta Blackman-Woods warned: “This Government is not interested in hardship in the North-East. We are told to stop bleating, to stop going on about it.”
At issue is a complicated series of changes to local government funding proposed in the summer and expected to be confirmed in the Chancellor’s autumn statement, on December 5.
According to Anec, the shake-ups will cut a further £100m-plus from the region, on top of enormous cuts imposed in 2010, when the Coalition first came to power.
Those cuts provoked fury because of a stark North- South divide, imposing reductions of up to £30-per-head on some North-East authorities – while many in the South saw their grant funding rise.
Ministers vowed that no council would be worse off in the financial year 2013-14, because they were already being asked to cope with a shake-up of business rates.
Now, Anec said, ministers were poised to break that pledge, by:
- Hiking funding for the New Homes Bonus by £500m – by cutting other grants for new housing, benefiting the South at the expense of the North;
- Creating a £245m safety net from cuts to council grants – instead of from central Government funds, as previously promised;
- Failing to fully fund next year’s maximum one per cent pay rise for local government workers;
- Slashing grants for fire and rescue authorities;
- Holding back £100m meant to be spent on local council redundancies.
Anec warned the changes could cost 30,000 jobs across the country – on top of the existing cull of town hall posts, of which 1,000 were likely to be in the North-East.
Its briefing note reads: “The proposed reduction for local government is unjustifiably high and will result in significant cuts in services, jobs and will be damaging to the economy in myriad ways.”
The warning came a day after Newcastle City Council warned up to 1,300 jobs could be lost under plans to slash spending by £90m over three years. The authority claims it will only be able to provide essential services after 2016.
Local authority leaders will not have been heartened by this week’s borrowing figures which showed the Government borrowing more than ever – prompting fears of another round of budget cuts.
Paul Woods, Newcastle City Council’s director of finance, warned that funding for economic development would disappear, adding: “They will be taking away our tools to achieve business growth.”