Councils are already manning the barricades in the face of impending cuts. But we are in a phoney war and a future attack from a hostile public will test their resolve
Councils face an unprecedented decade of spending reductions. The Institute for Fiscal Studies believes the cuts in ‘unprotected’ government spending will be deeper and more protracted than anything since 1945.
But, in the meantime, demand for many services, notably care for elderly people and children’s services, will continue to increase. Moreover, local government will not enter this period of cuts from as well-funded a starting point as the NHS, which has had far steeper rises in revenue spending in recent years. Councils have never been particularly loved by ministers of any party.
Councillors and their officers appear to be approaching the future with equanimity, despite the near-certainty of local government being singled out for the deepest cuts affecting any part of the public sector. There is no panic. Instead, in traditional British style, the war on the deficit has produced a true stiff-upper-lip spirit of the Blitz.
Most councils have been quietly preparing for the Big Adjustment for some time. Voluntary redundancy programmes, recruitment freezes and pay limits have become the norm. There is a powerful ‘keep calm and carry on’ mentality in town and county halls.
Official statistics already show a stark difference between the changing behaviour of councils and the NHS. Local government has cut employment by 43,000 since the middle of 2007, while over the same period the NHS has taken on an additional 136,000 staff and the police 15,000. The caution of council finance officers has ensured the momentum of change is already backwards.
In the light of the perverse incentives that appear to operate across Whitehall, those sectors that are most capable of managing their spending are likely to be cut hardest. The more councils show they are able to reduce spending, the more the screw will be tightened. Most council leaders have a fatalistic view about the future and believe they cannot avoid expenditure reductions of 25% to 40% in their net current spending.
What no-one in local government (or, indeed, the rest of us) can know is the likely public response to spending reductions when they take effect. For the time being, the Conservatives, if not the Liberal Democrats, are doing respectably in opinion polls. Leaderless Labour are probably still taking some of the blame for the government’s massive deficit and have not yet been able to articulate a constructive Opposition stance.
But from next April, when libraries, fire stations and even village primary schools start to be threatened with imminent closure, public opinion will almost certainly move against the coalition government. Experience suggests people do not fully grasp the impact of big policy changes until the very moment it occurs. Councils know from experience that the closure of a single library or primary school produces a massive local reaction. On the basis of current financial projections, we can expect to see placard-waving infants at the head of protests outside every civic office from Northumberland to Cornwall.
None of this is made any easier by the lack of firm grant allocations for 2011/12 and beyond. Because the Spending Review will not be published until October 20, the Department for Communities and Local Government will not be able to determine each authority’s funding total until, conceivably, early December – just 13 working weeks before the new financial year. In the meantime, directors of finance will have to plan against a background of their worst imaginings. On the basis of existing independent forecasts, cash reductions in grant of up to 10% for each of the next five years cannot be ruled out.
The ‘phoney war’ period between September 1939 and May 1940 was a time when people in Britain knew the Second World War had been declared – yet there was little evidence of hostilities. Children were evacuated from cities, and a blackout was imposed, but there were no bombing raids. It would have been easy to imagine the war would be easily survived. But it wasn’t. It is impossible to understand the impact of any massive change until it is hits home.
Perhaps we are in a short period of calm before the real struggle.
Tony Travers is director of the Greater London Group at the London School of Economics
