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Wednesday, January 14, 2009

Further signs of a public sector under pressure

Following on from their piece on Monday about the impact of the recession on Council services, this morning's Times newspaper has published the results of a survey of forty local Councils that indicates substantial job losses as part of the current budget round:

Forty councils approached by The Times yesterday were planning a total of 7,000 redundancies, and unions fear that few of the 442 local authorities across England, Scotland and Wales will escape the cutbacks. Although most of the job losses will be among backroom staff, there is concern that services will be affected.

The scale of the proposed redundancies is the first indication that Britain’s six million public sector workers will not be protected from the slowdown. Health and education professionals fear that they may be next.

Unions said that the cutbacks contradicted Gordon Brown’s plans to create jobs. “Already local councils are reporting huge increases in the number of people seeking help for debt counselling, housing advice, employment services,” said Dave Prentis, the general secretary of Unison. “It is the council workers who deliver that, so it would be madness to chuck them on the dole.”

Their findings are supported by the Local Government Association who said that one in seven of the 388 councils in England planned to make redundancies. Those in Scotland and Wales are in similar trouble:

Margaret Eaton, the association’s chairman, said: “The credit crunch and the recession are causing a decline in income and an ever greater demand for essential services such as help for the homeless and increased support for local businesses. It is a highly unpleasant decision for any council to cut jobs, but they also understand that local people are suffering.”

A combination of enforced efficiency savings, inadequate central grants and reduced fees and charges have all taken their toll on local council services. In addition many local authorities have had to curtail their capital spending as a result of the collapse in the property market. Capital receipts used to finance such expenditure have all but dried up.
It does make you wonder when councils will spend that £12 billion emergency money they have stashed away, you know the money coucils have for a rainy day, IT's Raining.
The figure in Wales was £531m, most of which is earmarked already for capital projects such as schools, leisure centres, city centre regeneration, industrial units, transport, roads. Unallocated reserves amount to £144 million, which is kept in accordance with Wales Audit Office guidance. They insist on a 5% reserve being kept by Councils because the risk to local authorities of not having such a reserve is greater than that incurred by WAG. This is because Councils deliver services and WAG do not.

As the WLGA Finance Spokeseperson said in a letter to the Western Mail: "The idea implied in all these arguments is that there is a collective sum of £144m at the disposal of Welsh local government which is nonsense. It's like adding up the reserves of WAG, the Scottish Executive and the Northern Ireland Assembly and creating a figure for something called devolved government. There are 22 individual sovereign authorities in Wales some with reserves as low as £2m. Reserves are constantly used to support service provision, often in the form of compensating for service overspends in volatile areas like education and social services or lowering the council tax.

There are reserves for insurance purposes and they are used as the first point of financial call in emergencies. As the dreadful floods last year in Hull and Sheffield proved, if there is an emergency such as flooding it is not civil servants out there with the sand bags, providing immediate aid, emergency accommodation or social care, it's local authority workers and their reserves that pay for this, particularly in the first instance . The Assembly Government has been urging authorities to settle equal pay claims and job evaluation for over 4 years and many authorities have had to build up significant funds to pay for this. Again, do they want us to renege on our obligations in this respect?"

You really should not believe Ministerial propaganda, especially when it is being deployed to try and detract from their own performance.
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