The deputy prime minister is wrong to believe that councils can avoid making redundancies next year, according to the vice-chair of the Local Government Association.
Speaking after chair Dame Margaret Eaton predicted that there would be 100,000 job losses in local government, Nick Clegg said that local authorities “shouldn’t immediately start issuing redundancy notices” and should phase in job losses, including as much voluntary redundancies and natural wastage as possible, over the next four years.
His comments contrast with the government’s decision to make the biggest cuts to council budgets in 2011-12, the first year of the spending review period, and to only commit financial support for redundancy costs in that year.
LGA vice-chair Richard Kemp (Lib Dem) rejected the suggestion that councils could manage the funding cuts set out in the spending review without “large job losses” in 2010/11.
Source: Nick Clegg
Mr Clegg, left, told the Guardian: “How local authorities are anticipating these cuts is wildly different from one place to the next. Sheffield City Council is making massive efforts to deal with a very tight settlement and minimise enforced redundancies. Go to other places and you get a reaction that ‘it’s all the government’s fault and I’m going to reach for the redundancy notice’.
“What we need to do is to play our part in central government, to try and show local authorities and others that they shouldn’t immediately start issuing redundancy notices for savings that they can phase in over four years and where, through voluntary redundancies, natural wastage and so on, maybe the pressure isn’t quite as great as they initially think it to be.”
Last week’s spending review confirmed that of the £5.5bn being cut from central government support to councils by 2014-15, £2.2bn would be cut in 2011-12. Furthermore, support for local authority restructuring in the form of a £240m capitalisation fund, has only been made available for 2011-12, with no funds committed in subsequent years.
LGA vice-chair Richard Kemp (Lib Dem) told LGC: “I think what Nick Clegg wants us to do is take a longer view and use reserves so job losses can be phased in. But the idea that there won’t be large job losses in the next financial year is clearly inaccurate. I appreciate what Nick is trying to do but we can’t make these cuts without seeing job losses next year.”
Lincolnshire CC chief executive Tony McArdle, who is overseeing a programme to reduce senior management by 37% before the end of this year, said local authorities focus had to be on services, not job protection.
“Restructuring is not about being macho or blaming the government”, he said. “I have a responsibility to my members to take out as much as possible in back room costs before asking them to cut services,” he added.
“It would be wrong for me to sit here and say: how can I preserve jobs? It is about preserving services.”
Mr McArdle also rejected an approach that relied entirely on voluntary redundancies, early retirements and natural wastage in an attempt to avoid compulsory redundancies. “We are not going to use voluntary redundancies or early retirements as an easy way out because that will place the burden on taxpayers.”
A spokesmand for Mr Clegg later told LGC that the deputy prime minister words had only been meant to enourage councils to phase in redunandacies and was “not an edict”.