Are central government and the Audit Commission expecting too much from local government, in terms of addressing problems of the recession and protecting local services, all while cutting costs? asks Stephen Weigel
So, it is now official – unemployment has reached 7.8%, the highest in 14 years.
The news came as the Audit Commission advised that councils were ‘not prepared enough for the next wave of recession’.
The commission believes we are now facing the ‘second wave’ of the downturn, as the effects of business failures, bankruptcies and unemployment bite. Apparently, we in local government are not doing enough ‘to prepare for the expected social, financial and economic development challenges ahead’.
I have also received a letter from JobCentre Plus advising of the important role local government has in employing people – taking on apprentices, offering people work experience, placement and other similar initiatives.
Well, I have got something to say on this, and it may not be that well received.
With reference to the Audit Commission... Of course we need to be ready for when the economic downturn comes to an end. However, it is no good putting everyone on the ship into readiness for landing on shore when we are riding a storm deep out at sea and taking in water with an ever-diminishing crew – it is all hands to the deck to prevent capsizing!
With the current financial arrangements in place, Tandridge DC was forced into freezing all vacancies after October 2008. This has come about due to a number of key factors including, to name just a few:
l poor settlement under the Comprehensive Spending Review of just a 2% increase in grant over three years – 1%; 0.5%; 0.5% – 2008/9-2010/11.
l requirement for a 3% cash saving year on year – Gershon extension, potentially rising in future years
l return to central government of monies received from the sale of our housing stock and a high proportion of our rental income
l reduction in grants, some as much as 50% (eg, Local Authority Business Growth Incentive,) where the £100m available nationally in 2010/11 has been reduced to £50m
l reduction of interest on investments
l rising costs from contracts – despite optimising procurement processes.
Given that we have the same downturn as the private sector to manage and, at the same time, have a large ‘upturn’ in demand and expectations on our services and as a local employer, I wonder just how central government believes local government will be able to continue to deliver quality services at optimum cost which meet local needs and expectations, including that important ‘choice’ word.
Relevant examples of what matters here and now in the current economic climate include:
l benefits service – seeing rising caseloads due to the effect of the recession, despite chancellor Alistair Darling stating that caseloads were static, are at the front end of council services. They are being pressurised to increase take-up of benefits and deal with more and more cases. A small additional administration grant cannot come close to covering the cost
l benefits customers – the most in need in the community are likely to face a freeze of benefits next April, at best. The September RPI is likely to be negative, and this is the figure the Government uses in Budget calculations to increase benefit awards. No-one is telling the benefit claimants their income is likely to go down in April – or stay the same. These queries again will most likely land at the council’s door, both in terms of volume of inquiries and dissatisfaction.
The ideas put forward to local government at this time seem to overlook the following key issues facing our sector:
l there is no spare cash
l there are no jobs. In fact, further reductions, including redundancies and adding to the 7.8% unemployed are on the cards for local government in the immediate future
l services which often make a difference to people who are unemployed and social cohesion are under threat as a result of being cash-strapped.
This all comes when we are reminded about the financial aid from our taxes, which have been ploughed into banking and other sectors, where it would appear likely that big bonus payments will be made again in this and future years.
It is even more important, therefore, that instead of initiatives being launched on what seems a daily basis by central government or announced by opposition parties, that relevant arrangements are in place to deal more strategically and practically with these critical issues in order to avoid a further decline in local services and increased unemployment, with the inevitable social consequences.
There is no ‘magic rabbit in the hat’ and past mistakes – rubbish piled up in parks with shorter working weeks and strikes, etc – need strategic planning, commitment and agreement between all relevant parties, if we wish to avoid any recurrence.
A good start in terms of resources would be to reduce the amount of local business rates and housing monies returned to central government for redistribution. Instead, these could be collected and invested in local services – real localism and empowerment to offer choice, protect local services, jobs and address the remarks of the Audit Commission.
Stephen Weigel is chief executive at Tandridge DC
The news came as the Audit Commission advised that councils were ‘not prepared enough for the next wave of recession’.
The commission believes we are now facing the ‘second wave’ of the downturn, as the effects of business failures, bankruptcies and unemployment bite. Apparently, we in local government are not doing enough ‘to prepare for the expected social, financial and economic development challenges ahead’.
I have also received a letter from JobCentre Plus advising of the important role local government has in employing people – taking on apprentices, offering people work experience, placement and other similar initiatives.
Well, I have got something to say on this, and it may not be that well received.
With reference to the Audit Commission... Of course we need to be ready for when the economic downturn comes to an end. However, it is no good putting everyone on the ship into readiness for landing on shore when we are riding a storm deep out at sea and taking in water with an ever-diminishing crew – it is all hands to the deck to prevent capsizing!
With the current financial arrangements in place, Tandridge DC was forced into freezing all vacancies after October 2008. This has come about due to a number of key factors including, to name just a few:
l poor settlement under the Comprehensive Spending Review of just a 2% increase in grant over three years – 1%; 0.5%; 0.5% – 2008/9-2010/11.
l requirement for a 3% cash saving year on year – Gershon extension, potentially rising in future years
l return to central government of monies received from the sale of our housing stock and a high proportion of our rental income
l reduction in grants, some as much as 50% (eg, Local Authority Business Growth Incentive,) where the £100m available nationally in 2010/11 has been reduced to £50m
l reduction of interest on investments
l rising costs from contracts – despite optimising procurement processes.
Given that we have the same downturn as the private sector to manage and, at the same time, have a large ‘upturn’ in demand and expectations on our services and as a local employer, I wonder just how central government believes local government will be able to continue to deliver quality services at optimum cost which meet local needs and expectations, including that important ‘choice’ word.
Relevant examples of what matters here and now in the current economic climate include:
l benefits service – seeing rising caseloads due to the effect of the recession, despite chancellor Alistair Darling stating that caseloads were static, are at the front end of council services. They are being pressurised to increase take-up of benefits and deal with more and more cases. A small additional administration grant cannot come close to covering the cost
l benefits customers – the most in need in the community are likely to face a freeze of benefits next April, at best. The September RPI is likely to be negative, and this is the figure the Government uses in Budget calculations to increase benefit awards. No-one is telling the benefit claimants their income is likely to go down in April – or stay the same. These queries again will most likely land at the council’s door, both in terms of volume of inquiries and dissatisfaction.
The ideas put forward to local government at this time seem to overlook the following key issues facing our sector:
l there is no spare cash
l there are no jobs. In fact, further reductions, including redundancies and adding to the 7.8% unemployed are on the cards for local government in the immediate future
l services which often make a difference to people who are unemployed and social cohesion are under threat as a result of being cash-strapped.
This all comes when we are reminded about the financial aid from our taxes, which have been ploughed into banking and other sectors, where it would appear likely that big bonus payments will be made again in this and future years.
It is even more important, therefore, that instead of initiatives being launched on what seems a daily basis by central government or announced by opposition parties, that relevant arrangements are in place to deal more strategically and practically with these critical issues in order to avoid a further decline in local services and increased unemployment, with the inevitable social consequences.
There is no ‘magic rabbit in the hat’ and past mistakes – rubbish piled up in parks with shorter working weeks and strikes, etc – need strategic planning, commitment and agreement between all relevant parties, if we wish to avoid any recurrence.
A good start in terms of resources would be to reduce the amount of local business rates and housing monies returned to central government for redistribution. Instead, these could be collected and invested in local services – real localism and empowerment to offer choice, protect local services, jobs and address the remarks of the Audit Commission.
Stephen Weigel is chief executive at Tandridge DC
