Now that we’re privy to the specifics in the Spending Review, the extent of today’s cuts is every bit as severe as expected. Over £1 billion off the overarching communities and local government budget, nearly half a million public sector job losses and spending down (and many ring-fences removed) for local councils, police and other public services makes for a challenging time ahead in local government.
The net impact of the chancellor’s various announcements today will see departmental budgets (with the exclusion of health and overseas aid) cut by an average of 19 per cent over four years. That might well mirror the pace and extent touted by the previous administration, but our familiarity with these plans should not belie their impact: this is a fundamental reduction in public service expenditure and one which will define a generation.
There is some comfort to be had in the fact that there is little new news; more confirmation of the inevitable. Many local authorities – and public sector organisations more broadly – have, for some time, been implementing effective changes to pave the way for these cuts. Now, however, activity must be ramped up.
That doesn’t mean knee-jerk reactions or hitting panic stations – anything but. It is more vital than ever that all public bodies – whether local councils, charities or housing associations – take a considered and long-term approach to risk management and carefully think through the implications of any austerity measure – whether that measure is making redundancies, renegotiating contracts, or engaging with new delivery partners.
Failing to do so risks not only service delivery, but could also trigger new costs, threatening to cancel out the very savings these cuts intend to achieve.
Andrew Jepp is head of local government at Zurich Municipal
