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."