Spending Review: 'Real pain' to come for millions

Spending Review in full

Thousands of town hall jobs are likely to go in Yorkshire over the next four years and the drastic reduction in funding could tempt some authorities to increase council tax to fill the gap after next year's freeze on bills.

Transport grants to councils will be cut by nearly 30 per cent, posing questions over how well they will be able to fund bus services and repair roads already blighted by potholes in many areas.

Local Government Secretary Eric Pickles said councils should merge departments and share senior officers to cut administration costs and warned he would not take "seriously" anyone who claimed major savings could be made without hitting vital services.

There was some positive news for councils as they were given much more freedom over how they spend their remaining money – and the Government pledged 2bn to help tackle the growing crisis of the cost of caring for the elderly population.

But the chairman of the Local Government Association, Baroness Margaret Eaton – like Mr Pickles, a former leader of Bradford Council – laid bare the impact the cuts will have.

She said: "This spending review will hit councils and the residents they serve very hard and will inevitably lead to cuts at the front line. These are some of the biggest cuts in the public sector and we have to be honest about their impact.

"Town halls will now face extremely tough choices about which services they can keep on running. These cuts will cause real pain and anxiety for millions of people who use the services councils provide, from keeping children safe to ensuring that streets are clean."

Mr Pickles told the Yorkshire Post councils should "cut deep" into administration spending to protect vital services: "If you're telling me local authorities can't take just over seven per cent of their costs each year in the way the private sector has been taking out much larger sums each year from the centre, I can't take that seriously," he said.

Councils welcomed the extra freedom to spend money and the simplification of the funding system, Hull being one of 16 areas testing the pooling of resources between local authorities, police and health services to tackle social problems.

Mark Burke, partner and regional head of Grant Thornton's Government Infrastructure Advisory team in Yorkshire, said local government was "one of the real losers" of the settlement. While Government funding will be cut by 26 per cent, Ministers insist council budgets should only fall by 14 per cent because the revenue from council tax will be unaffected.

Leeds City Council leader Keith Wakefield said: "The spending review presents us with a significant challenge, but this isn't the end to public services in Leeds, it only demonstrates the importance of showing strong civic responsibility to ensure we protect services for the young, the elderly and vulnerable people.

"It also presents a very serious challenge to the future of housing in our city and that will be one of the biggest issues we will have to tackle."

He added: "Leeds City Council has already made efficiency savings of over 100m in five years, but it is now clear that, in future, some services will have to be reduced further and others stopped."

The chief executive of Kirklees Council, Adrian Lythgo added yesterday: "Clearly, with such a significant percentage of our overall funding being cut, a significant impact on services and a number of cuts to traditional areas of work will now be unavoidable."

City cheer as 674m roads project is given go-ahead

TRANSPORT

Laurie Whitwell

A 674M project to improve Sheffield's roads was given the go-ahead, ending fears that the scheme might be shelved.

The largest Private Finance Initiative (PFI) project in the country was spared Chancellor George Osborne's axe, meaning upgrades to bridges, footways and roads in the city will now proceed as planned.

Sheffield politicians last night welcomed the news.

Deputy Prime Minister and Sheffield Hallam MP Nick Clegg said: "I am delighted that the Government has been able to announce the great news for Sheffield that the PFI roads programme will go ahead."

Mr Clegg conceded the withdrawal of an agreed 80m loan to the steelmaker Sheffield Forgemasters was a blow, but said the Government's PFI pledge was a sign of its commitment to the region.

He added: "These kinds of substantial capital investments are a clear indication of this Government's commitment to jobs and growth in Sheffield and across the North."

The Liberal Democrat leader of Sheffield City Council, Paul Scriven, said: "This is the result of a lot of hard lobbying. I'm delighted that Liberal Democrats have managed to secure this new investment for Sheffield.

"Hundreds of millions of pounds will be poured into Sheffield to fix our roads and pavements which had been allowed to crumble under Labour. Not only will it banish our 'pothole city' tag, but it will create lots of local jobs in the process."

The project, to take shape over the next 25 years, will improve road surfaces, footways and cycle paths as well as help fix bridges and street lighting. There will be upgrades to traffic signals, signs, street nameplates and road markings along with the planting of roadside trees and improved street cleaning.

Labour transport spokesman Harry Harpham said he was pleased the coalition Government had "seen sense" and agreed to fund the huge overhaul of Sheffield's highways infrastructure.

He said: "Labour's road improvement scheme will deliver repairs and maintenance to Sheffield's roads for the next 25 years and I'm pleased the coalition Government have seen sense and gone ahead with this much-needed investment."

The Comprehensive Spending Review also pledged funding to other key transport links in the region.

Commuters on the East Coast Mainline will benefit from 14bn to Network Rail for upgrades to stations and tracks, while the M1 will get a slice of 10bn of investment to ease congestion between junctions 28 and 31.

But Leeds Central MP Hilary Benn expressed fears that the Leeds trolleybus scheme had not been mentioned in the review.

He said: "The Chancellor was silent on the future of the Leeds trolleybus. This is ominous for the city. The trolleybus project is vital for our economic future."

Rail travellers face higher prices

Rail users face increased hikes in ticket costs and annual passes from January 2012.

The cap on the price of regulated fares will be lifted from the current rate of one per cent above retail price index (RPI) to three per cent, leaving commuters with extra charges worth hundreds of pounds.

Based on current levels, the rise means that season ticket prices will go up by almost eight per cent next year and around 30 per cent over the three-year period following 2012.

The RPI in July was 4.8 per cent and if it stays the same for the three years following January 2012, season ticket prices will rocket. An annual pass from York to Leeds, currently priced at 1,756, would cost 2,217come January 2014

Jobs axe threat as cash for police cut

YORKSHIRE FORCES

Rob Preece

Crime Correspondent

YORKSHIRE'S police chiefs admitted they would have to cut jobs and work more closely together after the Government announced funding for policing would be slashed by a fifth in real terms over four years.

Police spending will fall by four per cent each year, but the Treasury said increasing the police precept at expected levels would reduce real-terms budget cuts to only 14 per cent by 2014-15.

The Home Office will reduce overall resource spending by 23 per cent over the same period.

Police officers, as servants of the Crown, cannot be made redundant but all four of the region's forces are expected to cut staff positions.

South Yorkshire chief constable Meredydd Hughes confirmed he was in talks with his force's governing authority about setting up a staff severance scheme.

Voluntary redundancies are already under way at Humberside Police and North Yorkshire Police began a similar scheme earlier this week.

The region's forces have already decided to work together to maintain their fleets, buy equipment and carry out forensic investigations from next year, but the cuts make further collaboration increasingly likely.

Mr Hughes said: "These areas are really only the start of the potential collaboration that could take place."

North Yorkshire chief constable Grahame Maxwell said: "One thing that remains clear at this time is that we will have to operate with a smaller workforce. However, North Yorkshire Police are committed to protecting front-line service delivery as far as we possibly can."

Humberside chief constable Tim Hollis said there was bound to be a reduction in head count "because 82 per cent of our budget goes on people".

West Yorkshire Deputy Chief Constable David Crompton said his force faced one of its "biggest challenges" for a decade.

Jail population to be reduced by 3,000

JUSTICE

SAVAGE cuts to Ministry of Justice spending will reduce the prison population by 3,000 and result in 11,000 front-line probation and prison staff losing their jobs, it was predicted last night.

The department's spending on resources, capital projects and administration will be cut by 23, 50 and 33 per cent respectively as it makes average savings of six per cent a year.

In a statement, the Treasury said: "The Government will reform the sentencing framework so that it both punishes the guilty and rehabilitates offenders more effectively."

The chairman of the Prison Officers' Association, Colin Moses, said: "If these savings bring about further reductions in the number of front line staff I fear for the security and safety of the professional men and women of the service."Disabled adults may be hardest hit in benefits crackdown

WELFARE

Jack Blanchard

DISABLED adults in middle-income families could be hit hardest by the Government's latest round of savage cuts to welfare benefits.

The Chancellor announced more welfare reforms, including a fresh crackdown on benefit fraud, aimed at making 7bn cuts on top of previously announced savings of 11bn.

Disabled or seriously ill people who have a partner in work will lose their employment support allowance (ESA) – which was brought in to replace incapacity benefit – after one year, regardless of income, saving the Government around 2bn by 2015.

Working families will also be hit hard, working tax credits being frozen for three years from April and the eligibility criteria changed so that fewer couples will qualify. The childcare element of the working tax credit will also be cut, to cover 70 per cent of costs rather than 80 per cent.

The Educational Maintenance Allowance (EMA) – given to 16- to 19-year-olds where the household income is less than 30,000 to encourage them to continue their schooling – has also been scrapped.

The current "complex" system of means-tested working age benefits and tax credits will also gradually be replaced by a Universal Credit in an attempt to reduce fraud and get more people back to work.

Charities reacted furiously to the announcement, which they said have left Britain's poor shouldering far too much of the spending reduction burden.

The chief executive of charity Family Action, Helen Dent, said: "Vulnerable and low-income working families will be left thinking they're the ones being left to turn around the deficit supertanker. The measures in this spending review will have a considerable impact on families.

"Unfortunately many of the announcements make it difficult for work to pay, and our research shows that the welfare caps will disproportionately affect couples – and in some cases could cost the Treasury more."

But Work and Pensions Secretary Iain Duncan Smith insisted the changes are part of a "vital reform" of the welfare system.

He said: "We need a welfare system that does not trap people into an endless cycle of benefits but instead helps them into work that pays."

WHERE SAVINGS WILL BE MADE

2bn by only paying employment support allowance – which replaced incapacity benefit – for one year to claimants assessed as being ready for work.

625m by freezing working tax credits.

490m by cutting housing benefit by 10 per cent.

385m by cutting the childcare element of working tax credit.

270m through a 26,000 cap on benefits an out-of-work family can receive.

Union's staff fear if brigade presses on with station plan

FIRE SERVICE

Paul Jeeves

UNION leaders have expressed grave concerns that a multi-million pound scheme to build a new fire station in a Yorkshire city could be thrown into turmoil as scores of firefighter posts are under threat from the Government's funding cutbacks.

Fire authorities across the country are having to contend with grants from Westminster being slashed by 25 per cent during the next four years.

North Yorkshire Fire and Rescue Service has revealed that it is expecting to have to cut its budgets by up to 1m for each of the next four financial years to cope.

Despite the tough financial constraints, the brigade confirmed that it is pushing ahead with a 4.5m scheme which includes proposals for a new fire station in York city centre.

However, the Fire Brigades' Union (FBU) has claimed senior officials are "living in a financial dream world" and questioned whether there will be adequate resources to properly staff the new station.

Figures released by the FBU estimated that the 4m in savings equates to the loss of about 140 firefighter posts, although fire chiefs stressed that the financial cutbacks would not be solely made up of redundancies.

But the FBU's brigade secretary for North Yorkshire, Ian Watkins, said: "It is amazing to think that we could end up with a brand new fire station with not enough firefighters to actually staff it."

Union members staged a protest yesterday when they paraded a coffin through York to signify the death of the fire service.

However, Chief Fire Officer Nigel Hutchinson urged the public not to be "misled by scare-mongering".

Brigades elsewhere in the region are bracing themselves for having to enforce redundancies.

In South Yorkshire, non-frontline staff have been briefed about job losses, although it is not yet known how many of the 240 support staff posts will be affected.

Homeless charities blast further cuts to social housing and benefits budgets

TENANTS

HOMELESS charities reacted angrily to further cuts in social housing and housing benefit budgets announced by the coalition Government.

Following big reductions in housing spending already announced in June, Chancellor George Osborne said yesterday that single people under the age of 35 would in future only be given sufficient benefit for a room in a shared house, rather than their own flat as at present.

Currently the "shared room rate" – the lowest of all housing benefits – only applies to people under 25. The Government said raising the age threshold from 2012 would save 215m by 2014-15.

Mr Osborne said: "This will ensure that housing benefit rules reflect the housing expectations of people of a similar age not on benefits."

People living in social housing will also be hit hard, as the rent paid by new tenants will be raised to 80 per cent of the market rate.

The Crisis charity for single homeless people led the condemnation of the changes, saying: "Before the spending review the coalition Government made a clear pledge – that the cuts would be fair. That pledge has been broken.

"It is the poorest and most vulnerable adults who will suffer the most from the cuts announced today. They face the prospect of a 50 per cent reduction in the funding for social and affordable housing, less stability if they do manage to get hold of a home, and fewer opportunities to gain the skills and education they need to help themselves."

The chief executive of homeless charity Shelter, Campbell Robb, added: "The worry of cuts to housing benefit coupled with the absence of a long-term strategy will be devastating for the housing aspirations of thousands of young people."

Some of the money raised will be used to build 150,000 new affordable homes during the coming four years, the Government said.

But the National Housing Federation, which represents English housing associations, warned that the change could lead to thousands of low-income families having to pay up to 9,000 a year more in rent.

MAIN POINTS

Communities and Local Government:

Will lose 51 per cent from its 2.2bn budget in real terms by 2014-15;

1.6bn is being handed to local government;

Capital spending to plummet 74 per cent to 2bn.

Treasury:

33 per cent to be cut, but savings are tiny as it only spends around 200m a year.

Environment, Food and Rural Affairs:

Accepted a 29 per cent real terms cut over four years, limiting spending to 1.8 bn;

Capital budget down by 34 per cent to roughly 400m.

Business, Innovation and Skills:

25 per cent real terms cut;

BIS expenditure will be 13.7bn in 2014-15 – far below this year's 16.7bn;

Capital spending more than halved to 1bn.

Foreign Office, Department for Culture, Media and Sport, and Law Officers' Departments:

All accepted 24 per cent real terms reductions.

Home Office and Ministry of Justice:

Budgets will tumble by 23 per cent;

Departments' capital spending will also halve.

Department for Transport:

Due to lose 21 per cent;

Capital expenditure sees an 11 per cent drop to 7.5 bn.

Energy and Climate Change:

Agreed an 18 per cent cut;

Capital will rise by 41 per cent in real terms to 2.7bn for nuclear decommissioning.

HM Revenue & Customs:

15 per cent real terms cuts on its 3.5 bn budget.

Department for Work and Pensions:

Resource rise of 2.3 per cent to 7.6bn for benefit reforms, but figure does not take into account billions of pounds hacked off welfare.

International Development:

37 per cent increase to 9.4bn;

Devolved administrations in Scotland, Wales and Northern Ireland;

Escaped with 6.8 per cent, 7.5 per cent and 6.9 per cent resource cuts respectively.

Department for Education

Real terms cuts down to 3.5 per cent by 2014-15;

Capital expenditure will fall 60 per cent, to 3.4 bn.