LIVERPOOL faces a staggering shortfall in its budget of £143m over the coming few years, in a squeeze on English council spending that has been described as “the end of local government as we know it”.
The Government’s smarmy pronouncements
of no increases in Council Tax levels is
seen as a poisoned chalice
But even that estimate could be on the low side, depending on a number of factors facing Mayor Joe Anderson, according to a Liverpool City Council report being discussed at a “special” budget meeting of his cabinet this Friday.
The Labour-led city council has already been forced to find £141m in savings – more than a fifth of its controllable budget.
But the new round of expected cuts will mean that by 2016, Liverpool will have seen almost £300m snatched from its purse since the Cailition introduced its austerity programme in 2011.
There’s already talk of axing the £800,000 school’s uniform budget and closing a number of libraries and leisure centres.
A wheelie bin replacement charge may be brought in and 12 local organisations risk closure with a £267K cut in grants to community groups.
Hundreds of thousands of pounds is likely to be cut from services affecting the elderly, deaf and blind, with home care charges likely to go up. A city-wide shopping service for the housebound faces the axe.
But even these swingeing proposals, currently on the table, will hardly make a dent into the budget gap between 2013 and 2016.
The leader of Labour-controlled Birmingham City Council, the UK’s biggest town hall authority, says services there will have to be decomissioned marking a sea change in its role. There, Sir Albert Bore said: "This is the end of local government as we have known it, adding: "This is as serious as I've known it in local government."
Other factors being propelled at councils, like Liverpool, will make things even worse.
The city council, from next year, will be responsible for working out how much Council Tax Benefit to grant to those on low income. The amount being given to the city council is being cut by 10 per cent.
Mayor Joe is looking at various options. Should people paying little or no Council Tax have to pay something? Should it put up the Council Tax for everybody else to cover the cost? Or should it find savings elsewhere to pay for this shortfall?
The Government is hailing a decision to allow local councils to keep the business rates they collect. Currently those rates go into a central pot and are redistributed. Friday's report will warn that this new system of funding carries more risk for the city council based on business rates volatility and reduced levels of national funding.
The Government’s smarmy pronouncements of no increases in Council Tax levels is seen as a poisoned chalice.
Although the Government gives extra money to fund a zero increase, funding this on a year-by-year basis means council tax levels are actually falling behind.
No laughing matterHow? If the Government pays the cost to shoulder a five percent rise in 2012, the following year it will offer another five percent to peg the tax in 2013. That means councils themselves having to meet the ongoing cost of not getting continual help to fund the 2012 reduction.
Essentially spending accumulates each year. The Treasury is cutting the council tax grants given to local councils, while at the same time more or less preventing councils, by a form of moral blackmail, from increasing the tax. Councils putting up the council tax out of desperation will face ridicule from the government.
No wonder the City Treasury is already resembling a ransacked cupboard.
