Councils must stop gorging on taxpayers' money and tighten their belts

January 18, 2011 3:50 PM

Cuts in central funding will affect councils’ budgeting decisions over the coming years. But taxpayers will have to be wary of councils conjuring up new ways to raise money to plug the gap. We’ve seen stories of councils hiking the cost of burial plots and allotments for example, with taxpayers already paying record levels of council tax. It would be wholly wrong for councils to offset the reduction in their central grant with increases in such charges when there are so many areas of waste remaining. What’s happened over the last ten years is akin to what many people go through at Christmas – we eat and drink too much and put on weight. How do we lose it again? We exercise and eat well; we do the hard work. Councils that have gorged on taxpayers’ money are ducking the responsibility of making vital cuts. They’d rather keep feasting by ramping up charges on other services, buying a new belt instead of shedding the pounds.

It is worth keeping a close eye on your own council for similar schemes. There are ways for councils to reduce their spending sensibly, it just requires more imaginative thinking.

Equally pernicious is the attempt by some councils to blame others instead of working at improving their efficiency. For example, Lambeth council have an advertising campaign with the slogan “The Government has cut our money so we are forced to cut services.” This highly provocative and shamelessly political advert is a pathetic attempt to divert the blame towards central government, deflecting attention away from years of unsustainable growth in the public sector and misspending by councils. Rather than making proper cuts in bloated areas – many of which the TPA has repeatedly highlighted – Lambeth have chosen to use taxpayers money for a political ad trying to blame someone else. Indeed, the government is complaining to a financial watchdog about the posters, which cost £600 to produce. While they had free use of advertising space they missed out on private revenue for ads that could have taken it otherwise.  Other nearby councils have shown it possible to deliver greater value for money, like neighbouring Wandsworth.

And some are using front-line workers as political pawns too. National newspapers and major broadcasters covered the news last week that Manchester City Council was being “forced” to cut 2,000 jobs as a result of their latest financial settlement, reducing their enormous 23,340 headcount. In response Harry Phibbs posted numerous other ways the council can adapt to lower central government funding. He suggests that, rather than letting go of front-line workers, maybe Manchester City Council could begin with the 383 middle managers on over £50,000.

We need to remember that spending cuts have to be made. The public sector  grew by over 0.9 million between 1997 and 2010, a staggering 17 per cent, so it would be irresponsible to suggest that there will not be job losses, there has to be. Paying staff is the main cost for many public sector organisations and this has increased to an untenable amount. And some services will have to be pared back, too. Cuts and a reduction in staff numbers will be uncomfortable so we need strong economic growth so there are jobs for people to go to in theprivate sector and to ensure that the cuts are focused to minimise the impact on the services people rely on most.

Local authorities have to work hard to cut the genuine waste. From April all ring fencing around all revenue grants except for schools will be removed. That will give councils more freedom to make financial decisions, meaning they have even less of an excuse to pass the buck when making savings.Cuts in central funding will affect councils’ budgeting decisions over the coming years. But taxpayers will have to be wary of councils conjuring up new ways to raise money to plug the gap. We’ve seen stories of councils hiking the cost of burial plots and allotments for example, with taxpayers already paying record levels of council tax. It would be wholly wrong for councils to offset the reduction in their central grant with increases in such charges when there are so many areas of waste remaining. What’s happened over the last ten years is akin to what many people go through at Christmas – we eat and drink too much and put on weight. How do we lose it again? We exercise and eat well; we do the hard work. Councils that have gorged on taxpayers’ money are ducking the responsibility of making vital cuts. They’d rather keep feasting by ramping up charges on other services, buying a new belt instead of shedding the pounds.

It is worth keeping a close eye on your own council for similar schemes. There are ways for councils to reduce their spending sensibly, it just requires more imaginative thinking.

Equally pernicious is the attempt by some councils to blame others instead of working at improving their efficiency. For example, Lambeth council have an advertising campaign with the slogan “The Government has cut our money so we are forced to cut services.” This highly provocative and shamelessly political advert is a pathetic attempt to divert the blame towards central government, deflecting attention away from years of unsustainable growth in the public sector and misspending by councils. Rather than making proper cuts in bloated areas – many of which the TPA has repeatedly highlighted – Lambeth have chosen to use taxpayers money for a political ad trying to blame someone else. Indeed, the government is complaining to a financial watchdog about the posters, which cost £600 to produce. While they had free use of advertising space they missed out on private revenue for ads that could have taken it otherwise.  Other nearby councils have shown it possible to deliver greater value for money, like neighbouring Wandsworth.

And some are using front-line workers as political pawns too. National newspapers and major broadcasters covered the news last week that Manchester City Council was being “forced” to cut 2,000 jobs as a result of their latest financial settlement, reducing their enormous 23,340 headcount. In response Harry Phibbs posted numerous other ways the council can adapt to lower central government funding. He suggests that, rather than letting go of front-line workers, maybe Manchester City Council could begin with the 383 middle managers on over £50,000.

We need to remember that spending cuts have to be made. The public sector  grew by over 0.9 million between 1997 and 2010, a staggering 17 per cent, so it would be irresponsible to suggest that there will not be job losses, there has to be. Paying staff is the main cost for many public sector organisations and this has increased to an untenable amount. And some services will have to be pared back, too. Cuts and a reduction in staff numbers will be uncomfortable so we need strong economic growth so there are jobs for people to go to in theprivate sector and to ensure that the cuts are focused to minimise the impact on the services people rely on most.

Local authorities have to work hard to cut the genuine waste. From April all ring fencing around all revenue grants except for schools will be removed. That will give councils more freedom to make financial decisions, meaning they have even less of an excuse to pass the buck when making savings.

Latest Blogs: