Spending Review 2013: pain without gain for Birmingham residents

Sir Albert Bore

Sir Albert Bore: ‘pain without gain’

While some are out finding out whether locals think “we” are on the right track after the Tory Chancellor announced a further year of even larger cuts, Sir Albert Bore commented this afternoon that the government’s austerity project has failed to regenerate the economy and thrown the coalition promises of 2010 completely off course.

Chancellor George Osborne this afternoon unveiled a further £11.5bn of cuts to public spending in his 2013 Spending Review for 2015/16.

Responding to news that local authorities face a further two years of the council tax freeze imposed by central government and a 10 per cent budget cut, Sir Albert, Birmingham City Council Leader, said: “In the Comprehensive Spending Review of 2010, the Government planned to implement cuts up to 2014/15, by which time they thought the budget deficit would be under control.

“The Spending Round and further cuts to public services in 2015/16 have happened because there has been little growth in the economy, throwing these forecasts completely off course.

“Instead of bringing the deficit under control, it has been very similar for the last two years and actually increased slightly in 2012/13. This is because of the lack of growth in the economy. So we have had the pain of the cuts but not the gain of sorting out the deficit.

“Local government has already endured the biggest cuts in funding ever seen. It will have been cut by a third, whilst the average cut across government departments is 12 per cent.

“Councils have achieved astonishing efficiency savings and shed around half a million staff very quickly, with many more redundancies to come. In Birmingham, we have already saved around £275m and are making a further £100m of savings this year. We have lost around a quarter of our workforce since 2010. We now anticipate £80m of grant cuts in 2014/15, growing to £151m in 2015/16.

“But the scope for efficiency savings is rapidly disappearing and councils are already cutting front-line services and having to consider bigger cuts in the next year. The further year of even larger cuts will make it even more difficult to maintain vital local services.

“We do welcome the additional money that will be received to help fund social care, although at this stage the details are unclear.

“However, the logic of the Government’s approach is that cuts will continue at this pace for another two years at least – leading to the Jaws of Doom scenario in which we lose over 50 per cent of our controllable budget between 2011 and 2018.

“This is an unsustainable approach that will have dire consequences for local communities and threaten the viability of many councils. Instead, the Government should work with us to rewire public services and ensure that they can be provided in the years ahead.

“This requires opening up departmental budgets, localising them and pooling them under more local control. The Government must be much more radical in this respect: the crisis is now – not in a decade’s time.”

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