Wednesday, 22 December 2010

Council Budget Slashed By A Third.

By Ben Aulakh

An East Midlands council has had its budget slashed by £60 million as the toughest austerity measures in British history begin to bite.

Nottingham City Council is among the worst-hit councils in the country, with the Coalition government reducing its budget by more than a third over the next four years.

The 33 per cent reduction in the government grant for the council is a move which is once again expected to hit the poorest in Nottinghamshire the hardest.

Secretary of State for Communities and Local Government Eric Pickles announced budgets for all councils in the country on Monday, saying that Nottingham City Council will see a cut of 16.5 per cent next year alone.

Chief Executive Jane Todd said: “All of us at every level of the council have been taken aback by the severity of cuts for Nottingham, given the disadvantaged communities we serve.

“We are working hard to get a clear picture but are disappointed that the Government has chosen to present the figures in a way which plays down the real impact on places like Nottingham.”

City Council finance officers are still working through the figures but initial assessments show that a new formula for working out council grants masks the true tale of budgetary woe.

This is because local NHS funding was previously not counted along with Council Tax, which is not a Government grant; both have been included in the local authority’s budget for next year.

The council currently estimates it will see a 16.5% cut in Government funding in 2011, which, along with in-year cuts this year and other Government adjustments, equates to a real-terms cut in the council's budget of around £60m.

Deputy Leader of Nottingham City Council, Councillor Graham Chapman, said: "We still need to fully assess the announcement but it would appear to be almost as bad as we had feared and is going to hit many Nottingham families hard.

“If we have to make savings of this magnitude, even if we stopped doing everything else - cleaning the streets, emptying bins, looking after parks, leisure centres and so on - we would still have to make cuts in services to the most vulnerable.”

The City Council is still working out the full impact of the cuts, including cuts to special grants which councils like Nottingham City, who serve some of the most disadvantaged areas of the country, rely on more than most.

The Government's formula for reducing the amount it gives to councils put forward in the Comprehensive Spending Review – CSR – means that the severest cuts come in the first and second years.

Research by the Special Interest Group of Municipal Authorities – Sigoma – a group of urban councils, anticipated that the worst-hit councils will include some of the most deprived in the country,

This is based on estimates of how the changes already announced to the funding formula will affect the distribution of drastically reduced council budgets.

Cuts to discretionary grants for disadvantaged areas mean the overall effect on Nottingham is expected to be closer to a 33% cut over the four year period of the CSR.

This is because the Government is either scrapping those grants or sharing them across the country to all councils regardless of need, giving Nottingham a smaller share of the funds than before.

The welfare reforms announced by the Government are also likely to have a higher-than-average effect in Nottingham, where one in five people of working age receive a benefit of some kind.

The Government's settlements with councils come on the same day it announces its Localism Bill in Parliament.

Councillor Chapman added, “We have implemented a range of imaginative measures to save money, such as sharing some back office services with Leicestershire County Council, and will continue to do 

“The new proposals in the bill cannot be divorced from the scale and speed of the cuts being announced.”

Photograph by Colin Smith,

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