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We are going to have some hard choices

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I recently visited a remarkable place: the Rutherford School in Croydon provides education and care for children with serious learning and physical disabilities.

Even as recently as a decade ago, some of these children would not have survived beyond their first birthday. The staff-to-child ratio is very high, and provision is expensive. These children will need continued intense care throughout their lives.

The pressures on social care expenditure come from many different directions — more frail elderly people, more young adults and children with mental health needs, increased drug and alcohol abuse and so on.

Over the past decades those spending pressures have been augmented by the conferring of greater statutory rights for those requiring care.

There are two main consequences. The first is that many people perceive that they are receiving less for their council taxes. And their perception in many places will be correct — less than 30% of Croydon’s budget is now available for universal community services and facilities.

The second consequence is that any significant reductions in local authority expenditure will be very difficult to achieve, for the simple reason that we are statutorily obliged to spend in so many areas.

The Budget could best be described as “pain deferred” for local government. The big squeeze will come with the 2011-14 settlement, when we fi nd out what share of the £9bn predicted public funding reductions local government will be asked to shoulder.

It seems to me that there are three possible ways forward to absorb the coming pain.

The first and least palatable option is that we roll back some of the accreted statutory rights — perhaps less respite for carers, or reduced options for residential placements.

The second option is greater co-payment for both statutory and discretionary services.

This could mean a shift to a lower core council tax payment, but with a much wider set of charges for usage of services based around choice — and, to a certain extent, need.

It could include road charging, charges for waste disposal above a minimum level, charges for domiciliary care above a certain base level.

And the third option is that local government is given an incentive to offset any loss in central government grant by sharing directly in the dividend of private sector recovery and growth.

This could take several forms — such as a tax increment financing system, allowing us to share in the tax proceeds of economic growth, or perhaps discretionary local sales or tourism taxes.

Spending time with the kids at Rutherford School, it seems unthinkable that as a society we can make a conscious choice to go backwards in terms of the services we provide our most vulnerable citizens. But if we hide behind crude effi ciency targets that is what will happen.

The numbers post-2011 will be too big not to translate into hard service cuts.

We need a national debate about how we can maintain hard-won public service standards with a smaller public purse.

We must forge a new model of local public service, one where it is likely that the local state will be able to provide less as of right but where we are liberated to provide a much wider set of services as a matter of choice.

It will be fascinating over the next year to see which of the political parties has the bravery to mark out this necessary leap.

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