The politics of an ever decreasing budget
Prior to the local government elections in May there was a popular conceit running around the British press. This went something along the lines of:
‘Members of the public will only really get their head around the cuts once they start to really hit in April 2011.’
This in turn led to the general sense that the Government had survived the worst of the ‘cuts backlash’ when they, or at least the Conservative Party, got through the local elections unscathed. The commentators were, in this case, wrong.
I don’t want to argue that the cuts have not come. There have been cuts, and in some places the cuts have been quite heavy. I talk to colleagues/friends in the third sector who have seen quite large cuts in funding and some councils have been quite vocal about the cuts they need to make.
However, the cuts in April 2011 were in many ways just a prelude to what is yet to come. The reasons are multiple but most of it has to do with the way the local government budget works and the way the cuts were structured.
The announcement of the cuts was not made until October 2011.
This left local authorities less than three or four months to put their budget in place. Some had been prepared for the scale of the cuts but most of them were surprised by the front loading and the depth of the cuts in years one and two.
So what did some councils do?
Well, some of them looked at what they could do in a few months and made some small cuts around the edges. Others looked at small financial adjustments they could make which could keep them going for a year. Some found ‘underspends’ to roll over whilst others just dived into their reserves to make ends meet from 2010/11 to 2011/12.
Most of these things are one off savings that can’t be easily repeated. And if they can’t be repeated in year 2 then unfortunately the full savings of both years 1 and 2 need to be found in for year 2.
So, this leaves many local authorities with not just one year’s cuts to make but more like one and half year’s worth of cuts. And if those cuts are around 9% then we’re talking of maybe 12 or 15%; almost one sixth of the entire council budget needing to be found… In a year!
The politicians may want us to believe that the cuts are over, and indeed the press doesn’t seem quite so excited about it at the moment, but as we roll around to Autumn and Spring the cuts are going to hit and they are going to be substantially more than anyone has ever seen before.
And what is the other side of this political dimension? Local councillors are going to be asked to make tougher decisions than any of them probably expected. How that plays out will probably be even more interesting than the effect on the national picture.
More on that one to follow I’m sure!
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