Deeper cuts fear as economy stalls
FINANCE leaders fear stalling economic growth and national uncertainty over the Eurozone crisis will mean even deeper Government cuts to city council funding.
Chancellor George Osborne is unlikely to confirm funding settlements for local authorities until the winter – meaning council accountants have to begin planning the next round of savings without knowing how much they will get.
It was expected that plans to cut a quarter of all public sector funding over four years would hit councils hardest between 2011 and 2013.
But with details of Government funding for 2013 to 2015 unconfirmed and the economy stalling, finance bosses fear Mr Osborne may "move the goalposts" and target councils for extra savings.
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Peter Bates, Stoke-on-Trent City Council's assistant director of financial services, said: "When the Government's comprehensive spending review was announced we were hoping for a four-year settlement – however bad it was, that would enable us to plan.
"But it was only a two-year settlement.
And given the challenges in Europe, austerity measures and the private sector not picking up the slack as much as they first envisaged, the Government may move the goalposts.
"It is a real concern for all local authorities, but particularly for Stoke-on-Trent, which had the eighth worst settlement in the country, that we could receive a far more severe settlement than we had been anticipating.
"It's a really difficult time for us as we try to prepare and manage changes to things like the benefit system without really knowing what level of resources we'll have in the future."
Cabinet members will be briefed at a meeting on Thursday on how the authority managed to deliver £36 million savings in the 2011/12 financial year, despite planned savings like £2 million cuts to staff pay and perks failing to materialise.
Finance leaders used measures like a recruitment freeze and an "essential spending only" policy to underspend on back office budgets and offset shortfalls.
A further £24 million savings are being made during 2012/13.
Leaders say they will try to limit cuts to frontline services from 2013/14 but some are inevitable.
Councillor Paul Shotton, deputy leader and cabinet member for finance, pictured, said: "Next year we want to focus on efficiency savings and to minimise the cuts to frontline services.
"But inevitably there will be some cuts to frontline services.
"We will minimise and mitigate those wherever we can."
Mr Shotton also praised the authority's finance officers – and axed former cabinet member Sarah Hill – for delivering savings on budget.
He added: "From a financial management point of view, the result this year has been absolutely outstanding and all credit to Peter Bates and his team and Sarah Hill, the previous portfolio holder."
Comments
by thowtfull
Wednesday, May 30 2012, 8:51AM
“Continual cutbacks to the public sector should be a worry to us all. In addition to the inevitable reduction in services we receive there is the impact to the local economy from lack of economic activity. It is estimated that for lower and medium paid public employees up to 80% of their wages is reinvested in the local economy (meaning only 20% is lost to Stoke). If these staff are lost you end up with: Individuals on benefits which cost the taxpayer the same and far less reinvested in Stoke and a poorer service provided by contracted companies where 100% of the profit made are paid to shareholders outside Stoke.”
by putmefootinit
Tuesday, May 29 2012, 8:45PM
“No mention of realignment (to a realistic value) of the ground rent on the mosque in shelton to help swell the councils wastefull spending power, wonder if Mr Pervez has something to do with this ?”
by magnum57
Tuesday, May 29 2012, 1:07PM
“Don't worry the Council will have a contingency plan, employ more Consultants and a few more "expert"officers on £150k pa and increase Council Tax by 10%.”
by Dizzy1960
Tuesday, May 29 2012, 11:35AM
“And the German's give there workers a pay-rise.....
http://tinyurl.com/burt6ye”
by stokeandvale
Tuesday, May 29 2012, 11:21AM
“I HOPE this does not mean the "VALE" have to go without there annual hand out......HATE to think the £800-1000 a week footballers have to go without.........lol”
by truestokie
Tuesday, May 29 2012, 10:34AM
“Oh I forgot the £40million to lord it over the peasants in new offices.”
by truestokie
Tuesday, May 29 2012, 10:00AM
“Putmefootinit, this is the nub of the problem.
They keep spouting "we're skint" yet money appears for their pay packets, and grandiose schemes.
£130,000 +expenses for a "green projects officer".
£136,000 +expenses for the CEOs "assistant".
Yet all the while they attack the sick, old,disabled, deaf and blind.
The really sad part is that most of the City stand by and watch.”
by mole10
Tuesday, May 29 2012, 9:51AM
“Thank you for shutting our care home.
Thank you for our ipads.”
by putmefootinit
Monday, May 28 2012, 10:36PM
“Truestokie (as you know) they keep telling us we are all in it together and/or there is no money , they are going have to cut something and that something is their pay”
by truestokie
Monday, May 28 2012, 10:05PM
“Putmefootinit, they will be planning another pay rise, and you can be sure they will be feathering their nests good style.”