Mayor’s warning over Comprehensive Spending Review

Liverpool’s Mayor is warning that council services will be hollowed-out by the Comprehensive Spending Review.

It follows the Government’s announcement that the Department for Communities and Local Government will receive a 29 percent cut in its funding between now and 2020.

Not enough information has yet been released by the Government for the council to do a detailed analysis of the exact impact, but it is assumed the local authority will have to find tens of millions of pounds of savings every year between now and 2020, in addition to the £330 million – or 58 percent – that has already been taken away since 2010.

Joe Desk

Joe Anderson said: “It is perverse that we have a Chancellor who consistently misses his deficit reduction targets and then punishes councils by simply passing on eye-watering savings to patch up the holes in the Government’s coffers.

“So far we have risen to the challenge with a combination of local leadership, innovation and ingenuity. However, despite working hard to find innovative ways of keeping our libraries and children’s centres open, we cannot absorb such a scale of further cuts without it having a deep and lasting effect. But there is only so far we can stretch and the next wave will decimate us.

“Take adult social care where, by 2017, we will be spending £130 million compared to £222 million in 2010. The number of people receiving care packages will reduce from 15,000 to 9,000 over the next few years, badly hitting a service that is a lifeline and improves quality of life and independence. The Government’s much trumpeted announcement that we can raise council tax by two percent to pay for social care will make next to no difference, worth just £2.7 million a year to replace the £90m lost already.

“We face tougher decisions than ever before and people need to understand that we are going to have to make some very hard choices over which services we will be able to fund in future. There is no area of spending that will be left untouched, and all we can do is try and protect more of those services that help and support the most vulnerable.

“We are already taking our emergency reserves to below the recommended level, while Grant Thornton who inspect our accounts on behalf of the Government have praised our financial management but warned that we will struggle to fund those services we are legally required to provide after 2018/19.

“Although it is not possible to put an exact figure on it yet, I am in no doubt that it will mean more job losses in addition to the 2,200 workers who have left the council since 2010.

“These numbers are horrifying to contemplate, but they are real without political scaremongering. As always, I make the offer to anyone who wants to come into the council and inspect the accounts and see it for themselves. I have made the same offer to Government ministers and none have been willing.”

Council finance officers will be studying the detail of the announcement over the next few weeks to determine the exact impact on the city’s budget.

FINANCE FACTS

  • Liverpool has a low council tax base and only raises 10 percent of its income locally, meaning it is more dependent on Government grant
  • Each 1 percent cut in Government funding means £3 million less for the council whereas every 1 percent rise in council tax only raises about £1.3 million
  • Liverpool’s emergency reserves will reduce to £17.6 million by 2016/17 which is 4.2 percent of the council’s net budget, below the 5 percent which the Audit Commission used to recommend