140,000 council jobs set to go in 2011
Around 140,000 local authority jobs are expected to be shed in the next year as a result of spending cuts, council leaders have warned.
New analysis by the Local Government Group has revealed that the scale of job losses is likely to be 40 per cent higher than was originally thought following last month's Comprehensive Spending Review.
The LGA originally predicted 100,000 posts would go after Chancellor George Osborne set out the broad framework for public spending in the June budget. But the Government's decision to 'front load' a large proportion of the cuts into the first year - rather than allow councils to spread them evenly over the four years of the spending review - is likely to lead to around 140,000 posts being cut.
The unexpected severity of the first year cuts means councils will have to trim their budgets by an average of 11 per cent in 2011/12. Some authorities will also have to deal with the difficult impact of the loss of the Working Neighbourhoods Fund, which channelled £450 million to different parts of the country.
The Government has set up a £200 million capitalisation fund to help councils with the cost of cutting jobs, which is helpful, but the LGA is calling on the Government to go further to ease the effect of these reductions in next month’s local government finance settlement so councils can spread the cuts more evenly over the next four years. The Government also needs to clarify the level of new central government grants that will replace existing specific grants. A number of these grants were not finalised in last month's CSR announcements.
Baroness Margaret Eaton, chairman of the Local Government Association, said:
“Local councils knew the cuts were coming and had planned prudently to reduce spending over the coming years. We cut more than £1 billion from our budgets in the middle of this year, rolled up our sleeves and got on with the job. But the unexpected severity of the cuts that will have to be made next year will put many councils in an unprecedented and difficult position.
“No council cuts jobs lightly, but many are being left with no choice. Some jobs will go in natural wastage, not filling vacancies and voluntary redundancy, however, we cannot escape the fact that some losses will be dedicated professional posts that, given a choice, councils would not want to see go. These are the tough choices we are going to have to make.
“Local government will have to make cuts next year of around £2 billion more than we anticipated just a month ago. This stifles the opportunities for innovation and means town halls will be forced to cut further and deeper next year than they first thought.
“In order to protect frontline services, the Government must ensure that councils have the flexibility needed to manage changes to grant funding that are heavily loaded at the beginning of the four year settlement period. Grants that have yet to be finalised must be set at levels that help councils, rather than making a difficult situation even worse. ”
