Councils fear another £150m of cuts

George Osborne
George Osborne
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YORKSHIRE councils fear they may have to find further savings of up to £150m as a result of unforeseen Government funding cuts.

Local authorities in the region were already expecting to have to find £300m of savings after Chancellor George Osborne set out his spending plans for the 2015-16 financial year in June.

But details that have now emerged of the way Whitehall-level cuts will feed through to local authorities have left councils in Yorkshire fearing that figure could end up being closer to £450m.

The Chancellor’s spending review included proposals to cut the amount going to councils by 10 per cent. But calculations by the Local Government Association seen by the Yorkshire Post suggest that for many authorities the fall could actually be more like 15 per cent.

Leeds City Council leader Keith Wakefield said: “It is no exaggeration to say the latest revelations about local authority funding will signal the end of many public services.

“I am astounded at the audacity of the Government in publicly announcing 10 per cent real-term cuts for local government, fully in the knowledge that the reduction would actually be 15 per cent.

“In 2015-16 that will be an additional cut of £20m for Leeds on top of the £26m we were already aware of. By that time we will already have saved over £200m.

“In the face of yet more cuts, our ability to protect vital public services and avoid compulsory redundancies is becoming more restricted than ever.”

Early calculations by SIGOMA, the body representing towns and cities across the North, suggest individual Yorkshire councils could have to find an extra £5m in savings over and above what they were expecting following the spending review.

Fears of higher than expected cuts stem from new detail released by the Government on how money will be allocated in future.

It suggests £1bn that councils were expecting to receive in their main Government grant will be diverted into other funding pots which are not guaranteed to benefit all local authorities and which may involve extra costs.

The Government has always insisted that while the amount going to councils in 2015-16 will be cut by 10 per cent, the impact will actually be close to two per cent when incomes available to local authorities are taken into account.

The Department for Communities and Local Government said suggestions of further budget reductions were “disingenuous”.

A spokeswoman said: “In the recent spending round the coalition Government set out a saving of 2.3 per cent for 2015-16 in overall local government spending, including funding from central government, business rates and council tax income.

“This change is balanced with a progressive package of measures which create a real opportunity to transform local services and help deliver better outcomes for less.

“It is disingenuous to suggest there are further budget reductions since the total amounts allocated to local authorities have not changed.”

As part of the spending round Mr Osborne also extended for a further two years the offer of additional grants to councils which freeze their council tax bills.

This year, however, seven councils in the region chose to increase their bills rather than taking the “freeze grant” and the Yorkshire Post understands that number is likely to grow in 2014-15.

Speaking after the spending review in June, Tom Fox, the leader of Conservative-run Scarborough Council, joined Labour authorities in expressing concern over the depth of the cuts being sought.

If the cuts imposed on Yorkshire councils do amount to nearly £450m, that would take the total taken from their budgets between 2010 and 2016 to more than £1.1bn.

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