Criticism of ministers for “spinning” the true extent of council cuts made in the local government settlement has continued to roll in as treasurers examined the reality of their own situations.
Following the local government settlement, council chief executives and leaders were quick to condemn communities secretary Eric Pickles’ use of the ‘spending power’ measure - broadly government grants, including NHS funds, added to council tax - to present the cuts as less worse than feared.
However, as LGC analysis shows, the settlement, which Mr Pickles said would see no council face a ‘spending power’ reduction of more than 8.9% next year, in fact sees councils hit with an overall 10.2% cut to formula and specific grants next year, after the £85m transition grant is taken into account, with some councils hit with cuts as high as 17%.
However, as council treasurers examine their settlements and seek to determine the whereabouts of around £2.2bn in so-called ‘missing-in-action’ grants that have been unaccounted for since the spending review, some councils are discovering that their cuts are worse still.
LGC’s analysis shows Blackburn with Darwen BC faces a 14.2% cut next year to formula grant - taking into account its share of the transition grant- and an 8.3% cut the following year. This compares to reductions in ‘spending power’ of 8.9% and 5.5% respectively announced by the Department for Communities & Local Government.
But having looked at their settlement, Blackburn now believes its actual cut next year to be 22% - in cash terms this means the council will lose around £10m more next year then the government’s figures suggest.
Graham Burgess, Blackburn with Darwen chief executive, said: “On Monday the government said we would lose £18m next year. They said this was an 8.9% cut. Our finance experts have found we will actually be losing at least £28M next year - or 22% of our current funding. This is what we predicted back in October.
“Because of this, our councillors will have to make brutal choices about service and job cuts to deliver this massive cut for the government. Sadly our original predictions have proved correct. We know other very deprived areas of the north-west are also in a similar position.”
The council leader council leader Kate Hollern (Lab) accused ministers of peddling untruths. “Clearly the government has lied about the true extent of the cuts they are inflicting. Instead of spinning, the government needs to come clean and hold its hands up. They have decided to inflict these cuts and are expecting councils to face the public backlash.”
Earlier this week, Mary Orton, chief executive of Waverley BC and honorary secretary of the Association of Local Authority Chief Executives, said she was “reeling” at the news of a 17% formula grant cut “being sold as a 4% cut”.
“I’ve never seen spin like it”, she added. “I thought that Alastair Campbell had retired.”
For more on this story see chief reporter Allister Hayman’s blog.