UK Politics

Can councils take further funding squeeze?

Wolverhampton accordionist

In the centre of Wolverhampton, a lone accordionist plays a rather dispiriting tune.

"Are the cuts biting?" I ask one woman, who nods vigorously before describing what she sees as the disastrous effect of the spending squeeze on parks, housing and social care.

But others seem much less fussed about their cash-strapped council. Their bins are being taken away. They've still got the use of libraries and leisure centres. The streets are being cleaned. The roads are being repaired. In short, despite all the talk of doom in local government, the sky hasn't fallen in.

So what's the reality - are the cuts to local government devastating communities or is life for most people carrying on much as normal?

We're now two years into the local government financial crunch in England which began with the government's Spending Review in 2010. Later that year, councils were told how much money they would have until 2012-13.

'Taking the rap'

In this year's pre-Christmas settlement, local authorities in England have been told their budgets will shrink again in the 2013-14 financial year. Communities Secretary Eric Pickles is once again taking on the role of Father Christmas - but the sack of presents is getting smaller every year.

Image caption The council's motto hints at a powerful capacity to improve the lot of residents

Ministers say the meagre Christmas goodies will be distributed fairly. Those councils that receive a bigger reduction will still have much more to spend per person than those facing smaller cuts.

But as was the case two years ago, we can expect sharp criticism from Labour. Big metropolitan areas, where levels of need and deprivation are highest, will proportionally face the most severe reductions in funding.

"We're facing unprecedented challenges," says Roger Lawrence, leader of Wolverhampton council. "Local government has been unfairly singled out, despite being one of the most effective parts of the public sector. We're having to take the rap."

The council is consulting residents about the best way to make extra savings next year. People may be asked to pay for services that are currently provided free - like pest control.

Libraries may be merged with community centres. Parents might have to pay for more school meals. The Bert Williams leisure centre will be run by an independent trust instead of the council - another way of trying to get better value for money.

Another dose

Wolverhampton isn't the only council to have pre-empted the government's funding settlement with an announcement of its own in recent weeks. Newcastle said it was closing libraries and cutting 1,300 jobs, while calling the cut in the government grant "grossly unfair".

The leader of Birmingham warned of "the end of local government as we know it".

Has any of this dampened the mood of coalition ministers? Mr Pickles and his colleagues seem to be in remarkably festive spirits. So much so, that the communities secretary was asked at a Commons select committee meeting the other day whether he was a "doom denier".

He believes that some councils could still be delivering services much more efficiently, and if necessary dipping into their substantial reserves to meet their current challenges. Ministers say their priority is protecting council tax payers, rather than councils.

But local authorities are increasingly nervous about their ability to absorb funding cuts with efficiency savings alone. Two years ago they were told the cuts would be "frontloaded", and they'd have to endure a few years of pain before normal funding resumed. Now they are facing up to the reality that austerity could continue for many years.

Some in local government are wondering whether they might become victims of their own success. If they are seen to have handled the first round of cuts too easily, their reward could be another big dose of austerity.

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