The chancellor’s £200m cut to public health budgets gives local government an alarming indication of what’s in store in next month’s emergency budget.
Despite assurances council finances would be spared further austerity, this unexpected reduction shows the Treasury can and will cut local authority resources through other avenues.
In this case, the axe was wielded via the Department of Health, through which public health cash flows.
Further worrying signs of the Treasury’s ability to make the emergency budget miserable for local authorities came from Local Government Association chief executive Carolyn Downs.
Councils should be braced for further cuts to particular grants – like public health – and even for a further axe blow to their main funding for next year, she warned in an email circulated last week.
The Department of Health considers that councils will cope because of the “excellent example” they have set of “how more can be done for less”.
Such praise will be cold comfort to councils whose plans and services must be reshaped after every unexpected reduction or policy change.
Warm words about local government efficiency will not help.
Nor will a failure to recognise and take seriously the knock-on effects of relentless and unpredictable cuts.
Such impacts are not always obvious.
But as the King’s Fund points out in an excellent comment on the proposed public health cuts, they can have a significant effect.
It argues that cuts to public health budgets will expose a vulnerability in council finance that could undermine efforts to merge health and social care budgets.
Why would clinical commissioning groups enter into pooling deals with authorities when they know their funding is sacrosanct but councils’ allocations are not?, it asks.
Another example of a knock-on impact of a very different kind is revealed by our investigation into the right to buy policy this week.
This finds that a government’s plan to force councils to sell off their high-priced homes could thwart some significant house building plans.
Proposals to build hundreds of homes, months or years in the making, could so easily be scuppered by the Conservative pledge to extend right to buy to housing associations.
In construction, as in health, the route to a securing agreement requires that all parties can and will stick to their part of the bargain.
Or at least to convey the confidence that they are in a position to do so.
To adapt the King’s Fund’s question to construction: Why would investors pour cash into council housing when ministers can undermine their development plans?
In the weeks left before the emergency budget is revealed - and the months to the launch of the Housing Bill- ministers should consider the knock-on effects of their proposed policies and budget cuts.
Authorities might be great at weathering cuts and driving efficiency but that doesn’t help them avoid the less obvious but severe consequences of sudden budget or policy changes.
Councils need to win and keep the confidence of their partners in health, housing and other sectors in order to meet the needs of their communities.
For that they need some semblance of stability; not unpredictable and poorly considered cuts.