Worthy News: Big decisions

Monday 18 October 2010

Big decisions

Libraries have been early targets for cutbacks

Leisure services, parks and libraries have all been early targets of cutbacks, but nothing is considered off limits as councils brace themselves for the Spending Review.

How hard are local authorities going to be hit?

Councils in England are going to lose a big chunk of the financial support they receive from central government. A typical local authority derives 20% of its income from council tax, 10% from levying various charges such as parking and 70% from Westminster. This year (2010-11) councils in England received £76.2bn in government grants. Local authorities anticipate the Spending Review will reduce their government support by 25% to 35% over the next four years. That means a cut, collectively, of several billion pounds in their primary source of income. Comparable cuts are also expected in Scotland, Wales and Northern Ireland, where the level of government support for councils is decided by the devolved administrations.

When will councils know the extent of the cuts they face?

The Spending Review is expected to give the percentage saving which the government plans to make in its overall support for local government. Individual councils will then review their own budgets, department by department, to see where cuts need to be made. The exact financial details - or the local government settlement as it is called - will be published at the beginning of December. Councils will agree their budgets for 2011-12 early next year.

How long will it be before we know how services will be affected?

Some councils, mainly Conservative-controlled ones, have already made cutbacks in anticipation of the financial squeeze. Lincolnshire County Council, for example, is part of the way through a three-year efficiency programme to save £100m. It believes it will have to cut an additional £60m to £80m as a result of the Spending Review. Most councils will be making the big decisions in the run-up to Christmas, so we can expect an increasing volume of announcements and leaks about specific cuts as we move into the new year.

Are some areas more likely than others to be hit?

Leisure services, parks and libraries have all been early targets for cutbacks. Though valued by local communities, they are not seen as "front line" and many councils are eager to divest them to the voluntary sector. Support services for children and young people have also been scaled back in many parts of the country. But the size of the reduction in government support means that local authorities will have to reconsider every area of activity. Nothing is off limits, including sensitive areas like adult social care.

Is anything ring-fenced?

Of the £76.2bn which councils received from the government this year, £42.2bn is ring-fenced - in other words the money has to be used for a specific purpose and the local authority has no control over that part of its budget. The prime example is the Dedicated Schools Grant. The schools budget is protected, but there are many aspects of education spending - such as the new school building programme - which fall outside the ring-fence and are therefore vulnerable to cutbacks, as we have already seen.

What other ideas are being considered?

Many councils have launched programmes to share services and staff in a bid to cut costs. Mainly this takes the form of merging back office functions such as information technology and human resources. But some local authorities have gone much further. Hammersmith and Fulham council is merging its entire education department with Westminster, while Christchurch Borough Council will share a chief executive and senior management team with neighbouring East Dorset. The other big idea, pioneered by Suffolk County Council, is to outsource virtually all local services to private companies, charities or volunteers. Suffolk claims this will save 30% of its budget.

What does the government say about the cuts?

It says: "The government is overseeing a fundamental shift of power away from Westminster to councils, communities and homes across the nation. A radical localist vision is turning Whitehall on its head by decentralising central government and giving power to the people."

This article is from the BBC News website. � British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.