Public sector cuts: a view from the north-east

I spoke earlier this week to Simon Henig, leader of the Labour-led Durham County Council, which is shouldering £16.5 million in budget cuts following last week’s announcement by the Department for Communities and Local Government of £1.166 billion in cuts to grants for local councils. In addition to the £51.3 million he says the council was already having to find in efficiency savings. Only a bit of Mr Henig would fit into my piece for Tribune this week, so here he is in full.

Mr Henig began by complaining that most of the £16.5 million had been hidden from last week’s announcement. (Indeed, the table found on the DCLG website only gave a figure of something over £6 million for Durham’s cuts.) “You had to be very forensic to find all the detail”, he said. The government figure, he says, does not include cuts in capital funding inc. road maintenance, road transport, road safety – which are in a separate table – or abolitions of specific grants. “I got hold of it [the table] by getting someone in the House of Commons to get it for me”.

“I don’t think it’s a very good start for a government that was always at the previous government for burying detail – this goes beyond anything of the last government’s . We would hope for greater transparency; we’re having to put online every transaction over £500. They can’t even do the same for reductions of millions of pounds.”

He noted that 24 out of 28 local authorities which have the biggest percentage cuts are in northern regions, and nine out of 12 northeastern regions are present. “There’s a very clear north-south divide. Some of those grants are there in response to deprivation and kick-starting economies.”

He drew attention to the Local Economic Growth Initiative, which encourages people to start their own businesses. “To be frank, you don’t need that money to start that scheme in Surrey.” And referring to Nick Clegg’s promise to protect vulnerable areas like the north-east, he said: “I think questions will have to be asked about quite what influence the Liberal Democrats are having on these decisions.”

“If that spending review in the autumn repeats these patterns, that’s going to lead to some negative consequences. All sorts of things have been put in place to counter deprivation. If those are taken away, that recreates a gaping wound that was created in the 1980s, throughout all the northern regions.

One of the ‘area based grants’ to be cut covers Connexions, which gives careers advice to young people on leaving school. “It’s not money off schools but a very important service”. Also young offenders rehabilitation will be affected. “Those are important programmes. It’s also working together with the police with youth offending teams, which are going to be reduced significantly.” Road maintenance and safety programmes will be hit too.

“My greatest fear isn’t on any of these cuts. My greatest fear is the spending review in the autumn. I’ve heard sort of 20 per cent bandied about by a number of different sources. If that is added to by any change in the formulae, the prospect for the whole of the north is very worrying.”

Finally, on local government pay and pensions (also covered in Tribune this week) he said: “I think it’s about to be taken out of our hands completely. I sympathise with Unison, the vast majority of whose members are not gold-plated people and need to be treated equally. This year my suspicion is it’s about to be taken out of our hands altogether. They’ve certainly talked about a public sector pay freeze.” Mr Henig was not against further reform to public sector pensions though, and suggested some sort of commission would be a good thing.

“There does appear to have been an upward pressure [on the cost of public sector pensions]. The argument here is over whether that’s temporary factors or something more permanent.”

DCLG had not responded to a question about the effect of the cuts on the north-east at the time of publication.

(from Tribune blog)

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