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London councils to slash services in cash squeeze
Katharine Barney, Evening Standard26.11.08
KEY council services face the axe because of low levels of government funding announced today.
More than two thirds of London's 33boroughs will receive an increase in their budgets of just 1.75 per cent, putting their finances under severe pressure. All of the boroughs will receive funding levels of below inflation, at 4.5 per cent, from the Government.
Rubbish collections, schools, housing and social services could all suffer from the below-inflation settlement.
Their income is topped up by council tax but several authorities have already committed to low or zero council tax rises, meaning services and staff are under threat.
One council has already made a promise to cut council tax by three per cent, with other boroughs expected to make announcements in the new year.
Tory-controlled Westminster, Wandsworth and Kensington and Chelsea councils are among the boroughs which have agreed to plans by shadow chancellor George Osbourne for a council tax freeze.
Mayor Boris Johnson has also announced a freeze for City Hall's share of the household bill. Tony Travers, from the London School of Economics, said: "Many councils, especially Conservative ones, will be put in a very difficult position because they have committed themselves to low or zero per cent rises, but they will find themselves receiving a funding increase of under two per cent when inflation is nearer to four, so I would predict some reduction in employment. It's not going to lead to council tax hikes, but inevitably to cuts in services in whatever form councils choose to make them."
But local government minister John Healey praised the efficiency savings that had been made by London councils - more than in any other region.
He cited Westminster's new cashless parking payment system, which has reduced theft of revenue, and the use of external contractors in Hackney.
Mr Healey told the Commons that new regulations meant councils would not have to cut this year's budget if they had funds stuck in collapsed Icelandic banks.
He added that while London authorities had made considerable efficiency savings, nationally efforts to cut costs were "not good enough" and another £500 million a year needed to be found.
The funding arrangements are part of the Government's three-year funding plan for local authorities, which was agreed last year. Only four London authorities - Barking and Dagenham, Enfield, Redbridge and Newham - will receive an increase of more than three per cent.
Reader views (13)
Here's a sample of the latest views published.
There is plenty of scope for big savings in local government: idiocies like diversity training and lesbian etc 'outreach' programmes; grotesque rents paid to private landlords for sub-standard housing; much middle management; housing of tenants in enormously expensive city-centre council accommodation which should be sold off and the tenants moved to cheaper areas. The only efficient operation in many councils seems to be the system whereby they collect and chase up payment of the council tax.
- Richard, London, London. UK
Before they cut services, they could review the rents they pay to private landlords. The case of the £12,000 per month rent in Ealing is not a one off. Many London boroughs pay exhorbitant rents without even inspecting the properties. Dilapidated flats cost us - taxpayers £300 - £400 per week; houses for £500 - 600 per week, or more!
- Beatriz, London
A still the ID card scheme limps on...
- The Beagle, Welling UK
Hello London,
But they will find cash for the 2012 Oylimpics ....... FACT?.
- John L., Scarborough N.YKS. U.K.
Stop wasting precious resources on free houses, free transport and all for free-loaders who can cheat the Nu Labor bureaucracies we have. It is clear the Conservative councils have a much better handle on finances.
- Jacqueline, Hampstead, London
Get back to the basics: Defence, fire, police, roads and streets. The more money people have, the more jobs that will be created, less welfare will be needed. If people don't want to work, they go suck on the welfare in some other country.
- Trunk, US
Reduce numbers of useless staff and bullet-proof pensions. Divert resources to frontline services. Job done. Next problem, please.
- Nobby Clark, Perth, Scotland
Try finding out the number of consultants engaged by Local Authorities on rates upwards of £400 per day, for jobs that ordinarily would be @ £35k per annum. The saving could be achieved by LA's converting consultants to temporary or permanent staff, without affecting normal positions or services.
- Chris, London
We know exactly where the cuts will fall, on our old and sick. We know where the cuts should fall, IE, housing benefits and hand outs to scroungers.
- Mike,, London
It would be interesting to compare this to northern "Labour stronghold" councils funding, there wouldn't be any disparity at all would there?
- Bob, Cheam
Instead of scrapping services, why not scrap the pensions the staff at councils get?
And cut the wages of the staff over say £50K?
After all it's not like they give value for money, and are actually worth it.
- P I Staker, London
We have too many people working in local government and too many earning too much money, it is time that salaries and pensions are looked at, capped or reduced. We need a reduction in the number of fat cats employed. If these councils were private companies they would be cutting back on staff to try and stay in business.
- Maggie, London
they'd be better off stopping the generous and far too expensive final salary public sector pensions....why should my service go down to pay for that? no one pays for my pension?
- Naomi, london
