What’s in a recession? More than might be necessary or wise when it comes to redundancies in councils, it seems. The cutting of 350 home care jobs and closure of seven daycentres announced in Northumberland is just one recent example of ‘savings’ apparently demanded of local government by the recession. But are these really cuts that the economy needs and the public craves? What’s really behind them? And won’t cutting council jobs help turn a recession into a depression?
Between December 2008 and July 2009, Unison’s weekly ‘Job Watch’ recorded more than 8,000 jobs lost from UK councils – through redundancy and ‘freezing’ or deletion of posts. And councils as dispersed as York, Bristol, Norfolk and Oxfordshire are planning hundreds more redundancies over the next three to five years . That comes on top of years of systemic recruitment and retention problems, high vacancy levels (remember social workers?) and casualisation of major swathes of the local government workforce through agency and temporary working.
Personal misery for our members and service users will be accompanied by crisis for many of our major towns and cities. The Public sector cities – trouble ahead report, published in July by the Centre for Cities, showed not only that 27% of all jobs are public sector ones, but that 45 of 64 UK cities are dependent on councils and other public bodies for a much higher proportion of employment than that. Newcastle, Liverpool, Swansea, Ipswich, Barnsley and Hastings are all ‘highly vulnerable’ economies without their public sector jobs.
The Centre for Cities’ conclusion that the government should avoid cuts ‘while job destruction is outstripping job creation’ is echoed by other noteworthy commentators. David Blanchflower – once of the Monetary Policy Committee and the only member to predict the recession - calls for increased government spending now to avoid a ‘semi-slump’. As he points out, the government can borrow at low long-run rates of interest and investment in infrastructure and public services ‘are smart investments for all our futures’. His message to the three party leaders is: ‘If you want to transform a recession into a depression, go ahead and cut public spending.’
The financial and social costs of cutting public sector jobs is highlighted by Richard Murphy of the Tax Research website. His detailed calculation of tax loss, benefit costs and reduced support for the economy from redundancies demonstrates that 92% of the cost of making a public service worker redundant will be borne by the state through lost revenue and benefit payments. So, cutting the proposed 500,000 public sector jobs at £21,000 (and most earn far less than that!) might reduce the pay bill by £10.5bn, but would only save £0.8bn. That’s without the social costs of reduced access to education, social care, youth services and health-promoting leisure facilities.
Unison is helping our branches facing redundancies and service cuts to understand their local council’s finances, to help them question this widespread knee-jerk reaction with he recession as rationale. Our investigations are proving increasingly interesting. Take Mid-Sussex District Council. Having withdrawn the threat to pull our members out of the Local Government Pension Scheme, they are now threatening cuts all round as a result of the recession. But a close look at the books revealed that what is really happening is a reduction in income caused by the scrapping of a Medium Term Financial Plan containing planned increases in council tax of 6 pence, 4 pence and 5 pence and its replacement with another based on a council tax freeze for the five years up to 2013/14.
The origins of this move – common across Conservative-controlled councils – are obvious. In ‘Control shift – returning power to local communities’ published this year, David Cameron promises councils who reduce council tax by up to 2.5% a central government payment as compensation under a Tory government. ‘...do everything you can to get council tax down’. In May, he demanded councils ‘smash that record, find even more savings’ and many are doing as they were told. Not so many are holding referendums to see if such moves are popular with the local electorate.
That could prove a big mistake. Polling this year by Ipsos Mori suggests that there’s no great appetite for generalised cuts. Far more would prefer to see services made ‘more efficient’. When asked in April this year whether they preferred reduced spending on services or increased taxes, 53% of those polled opted for increased taxes, compared with 35% wanting reduced spending on public services. More recently, in June, only 29% of those polled wanted reduced government borrowing and cuts to services, compared with 69% who wanted to see them left as they are or increased through extra income tax if necessary. Asked which services should be protected, 82% said the NHS, 58% schools and 46% care of the elderly. Tell that to the pensioners of Northumberland. Perhaps David Cameron should have a rethink?
