Since the Chancellor’s announcement of the Comprehensive Spending Review more detail has been emerging and it is becoming clear that his assurances about public services were mere bluster.
What we know for sure is that the next few years will be incredibly difficult for our Council and our community. Lewisham currently receives over £100m in direct support grant for local services each year. Osborne has announced that every last penny of this will be gone by 2020! He has tried to create the impression that by letting Councils raise Council Tax a little and changing the way the Business Rate works Council will be able to make up the difference.
But today we spend £271m on services like caring for vulnerable adults and children, libraries and youth work, refuse and recycling, parks and leisure, community safety and trading standards. That is already down by £120m – almost a third – because of cuts in funding from Central Government since 2010 and those other sources of income won’t make up the difference.
Even the head of the body that represents public sector accountants, Rob Whiteman thinks Osborne’s plans don’t add up. He said ‘The claim councils will spend as much as now by parliament end will include some deft and dodgy arithmetic on devolution.’
On current projections, and if the Government does not change course, councils including Lewisham will reach a point where we have no money left for anything other than adult social care, children’s care and collecting refuse.
But Osborne’s statement goes way beyond just financial cuts. It lays bare the Tory attack on the school system too. Osborne baldly states that it “represents the next step towards the government’s goal of ending local authorities’ role in running schools and all schools becoming an academy.” And he also plans to introduce a new funding formula for schools which will disadvantage school sin urban areas like Lewisham.
The Chancellor made much of his commitment to Housing but his plans to thousand of so-called ‘starter homes’ could require first time buyer incomes of £100,000 a year, and a new analysis from Shelter suggests that shared ownership properties could be unaffordable to more than half of all households across the country.
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Even members of Osborne’s own party have been criticising his statement. The Conservative Chair of the Local Government Association, Lord Porter said: "It is wrong that the services our local communities rely on will face deeper cuts than the rest of the public sector yet again and for local taxpayers to be left to pick up the bill for new government policies without any additional funding.
"Even if councils stopped filling in potholes, maintaining parks, closed all children's centres, libraries, museums, leisure centres and turned off every street light they will not have saved enough money to plug the financial black hole they face by 2020."
Lord Porter is right. The coming years will be difficult indeed. Some in our Party have said that we should respond by setting a ‘no cuts’ budget. We don’t believe this is the right thing to do, and it is not Labour policy.
Councils are required by law to set a balanced budget. If we don’t, the Tory Government will send in accountants to make the cuts. It would be like LewishamHospital again – a Kershaw for the Council – but this time we would have no legal grounds to stop them. A ‘no cuts’ budget would not mean no cuts. It would just take what little discretion we have out of the hands of locally elected and accountable people.
We are working with other Labour Councils to challenge the Government and make clear the impact of their drastic cuts to local government – including on the NHS. Mayor Steve Bullock was a signatory to a joint statement with the Shadow Chancellor which sets this out in more detail recently and which can be accessed here.
So what can we do? Next May, we have the elections for Mayor of London where Sadiq Khan will be our candidate. We must win this election. Sadiq will stand up for London, tackle the housing crisis and work with councils that are being hit by Tory cuts.