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Tougher times ahead

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When the local government finance settlement was announced in 2010 we described it as the toughest in a generation.

With a 28% cut to government grants across the four-year funding period, and much of it front-loaded, it was inevitable that councils would have to reconsider quickly the way in which they delivered services and structured their workforces.

Ministers have made no secret of the fact they want councils to lower permanently their cost base. This is why there has been so much pressure on councils to freeze council tax again in 2012-13, for what would be the second year in a row.

Ministers have also indicated that local government should prepare itself for more cuts to government funding beyond 2015 and possibly up to 2017.

Even in an environment where service demand and cost were steady, the impact of these reductions to budgets would be challenging. Unfortunately, reductions in public spending have coincided with significant upward cost pressures in a number of local government service areas.

In the big-cost area of adult social care, the ageing population is creating enormous strain. Long-term underfunding of roads and recent harsh winters mean our highway repair costs are up. Demand for social housing is rapidly climbing as the rate of private home ownership continues to stall. You could go across every department in the town hall and hear a similar story in relation to at least one aspect of their work.

An inevitable consequence of the current financial environment is that the local government workforce is shrinking. In 2010, when the local government finance settlement was announced, the LGA predicted that about 140,000 jobs would be lost as a result in the 12 to 18 months after the settlement.

This has proved to be correct despite the best efforts of local authorities to mitigate the losses.

The decision to freeze pay in 2010 and 2011 was difficult to make but regrettably necessary. It is one of the main reasons that job losses have not been even greater.

With the announcement from ministers that cuts to local government funding may be extended beyond 2015, it is clear that councils will continue to face tough decisions in coming years.

We will work with our workforce and their union representatives to ensure councils continue to provide the reliable, efficient services that residents trust us to deliver.

Sarah Messenger, head of workforce, LGA

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