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North-east councils warn cuts maybe 'undeliverable'

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The government’s front-loaded cuts to council budgets could be “undeliverable” in some councils in the north east “will be very damaging” and will “likely leave long term problems”, a briefing note from a cross-party group of north-east councils has warned.

The briefing from the Association of North East Councils (attached left) illustrates the scale of the financial challenge authorities in the north-east are facing and has been among ministers and officials in Treasury and the Department for Communities & Local Government.

The notes sets out six key concerns about the cuts to council funding, set out in the spending review, which will see councils budgets reduced around 26-28% over the next four years - a figure it warns could be greater for some councils when the details of the local government settlement are published.

The note warns that the frontloading of the cuts, in particular, is set to create “real difficulties for local authorities ability to ensure high standards of services for local people”.

It said: “Although local government was prepared for a substantial resource reduction, given the level of the UK public deficit, the scale had not been predicted and will be difficult for all and perhaps undeliverable for some”.

The paper urges ministers to consider “re-balancing the budget” for local government over the spending review period “so that the required reductions are spread more evenly to enable local authorities to take a more planned and phased approach towards reducing costs, rather than implementing deep cuts”.

Paul Watson, (Lab) Sunderland City Council leader and Association of North East Councils chair, said the front-loaded cuts were “unprecedented” and would have “implications for all local authorities in the north-east with significant concerns regarding the impact of these for residents, employees and the delivery of frontline public services”.

The paper also warns of the impact of the loss of funding through the Area Based Grant, such as the Working Neighbourhoods Fund, which was targeted at deprived areas. It estimates that the loss of WNF cash to the regions represents a reduction of £73m.

It said: “This is a very significant and important grant that is allocated to the most deprived areas of the country in recognition of the additional challenges they face. The level of reduction in grants will be very damaging to this area of the country and is likely to leave long term problems for some particularly vulnerable communities.”

The paper also warns of the impact of the government’s council tax freeze, which it says will result in councils both receiving a reduction in funding and a limited ability to raise fund through council tax. It warns that as many areas in the north-east have a “very low council tax base” they will “suffer more”.

The note said: “It is crucial that the government recognise that the north-east is facing additional pressures because of the low resource base, the levels of deprivation which put intense pressure on service and the relative strength of the public sector in this area of the country, compared to the private sector.”


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