Clive Betts: These cuts strip cash from the North and threaten even vital local services

IN the course of this Parliament, Government funding to local government will be cut by 43 per cent in real terms – which is more than twice the level of cuts experienced across government as a whole. David Cameron has suggested that the June spending review added “just an extra 2.3 per cent cut” in the next few years. I’ve asked him to provide an analysis of this, as independent experts suggest the figure is closer to an extra 10 per cent.
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Although that 43 per cent is the average cut, there has also been a massive redistribution from north to south, from urban to rural, and from the poorest areas to the richest.

For example, at around £200 per head, Sheffield’s cuts are more than five times those in Windsor. Yes, Sheffield does get more grant and spending power, but that is because Sheffield has bigger problems, more challenges and fewer resources than areas such 
as Windsor.

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The extra grant and spending power was designed to give both a level playing field.

This massive transfer of resources is not just taking place in local authorities. The Government is proposing to do exactly the same in health services too. The latest government proposals would mean that Sheffield would get a near £50m annual cut in NHS resources which would be transferred directly to areas where, according to recent research by the University of Liverpool, people are “already healthier, live longer, have the best quality of life and are the least hit by cuts in council resources”.

It is also happening in fire and police service funding. It is the combination of these massive transfers which hit the poorest areas the hardest.

It is simply ridiculous to believe that “cutting out the biscuits” or “sacking a chief executive” will come anywhere near to compensating for these cuts. Sir Merrick Cockell, the Conservative leader of the Local Government Association (and not a man given to hyperbole), says the cuts are “unsustainable”.

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When David Cameron and Nick Clegg say that it is only “northern Labour cities” that are making big cuts, they are being disingenuous.

Despite the more favourable financial treatment being received by southern Conservative and Liberal Democrat councils, they are now starting to make big cuts too.

For instance, Liberal Democrat Portsmouth is cutting library and Sure Start services, while David Cameron’s own Conservative-controlled Oxfordshire is planning to shut 37 of its 44 Sure Start Children’s Centres – in direct contravention of the pledge David Cameron himself made in 2010.

The really big cuts, however, are yet to come. In the next six months, we will see councils proposing service closures and/or big fee increases in a whole range of services.

This will continue for at least the next three years.

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The cuts will be concentrated in those activities which councils are not statutorily required to provide, for example leisure services. But the scale of the cuts will inevitably mean that even statutory services will be badly hit, with provision pared to the bone.

Let me use Sheffield as an example. There will have been £182m of cuts between the beginning of this Parliament and 2013-14. On top of that, we know that in 2014-15 and 2015-16 a further gap of £80m will have to be bridged. The Chancellor has now indicated that there will be another £26m on top of that up to 2018-19.

Currently, about 38 per cent of Sheffield’s budget goes on care for adults and children. Another 46 per cent goes on what are effectively inescapable commitments, like the long-term contracts for refuse collection and disposal, highways improvements and repayments for school buildings.

That leaves just 16 per cent of a rapidly reducing budget for everything else. But the further cuts through to 2018-19 will wipe away that 16 per cent. There will be nothing left.

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It won’t be about which libraries will be closed, because there will be no cash to keep any library open. That money cannot be found without cutting into statutory services, because there will be no leeway at all on discretionary services.

That situation will be replicated in a large number of councils. To think that this is a problem for just a few northern cities is to completely misunderstand the scale of what is happening.

It is not about one or a few authorities failing, it is a potential failure of local government as a whole. Not through its own fault, but because it will not have either the necessary resources from central Government or the ability to raise the money itself. This is serious; more serious by far than the challenges of rate-capping in the 1980s.

Based on the Government’s own current forecast, there are 56 councils whose current levels of expenditure are 15 per cent higher than their income is likely to be by 2015-16. Some are heading into serious financial difficulties.

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They are councils across the political and geographical spectrum, with some early casualties being smaller, rural, Independent and Conservative-controlled councils.

*Clive Betts is MP for Sheffield South East and chairman of Parliament’s communities and local government select committee.