Local Councillors criticise government funding for Devon

The government is creating a “wild west economy” that is failing to address Devon’s problems, the county council’s opposition leader has claimed.


Lib Dem councillor Julian Brazil (Kingsbridge) made the remarks at a cabinet meeting on Monday [26 September] after hearing that the Conservative-run council’s overspend could be as much as £27 million this financial year, despite it already finding millions of pounds of savings and extra income.

It followed a mini-budget by chancellor Kwasi Kwarteng last week that featured the biggest tax cuts by a government for 50 years.

The cost-of-living crisis and increasing demand for help for vulnerable children and adults has led to spiralling costs in Devon, with the council recently warning it had “never before faced a combination of demand growth and price shock pressures of this scale.”

And while the underlying budget forecast has worsened since then, a ‘financial sustainability programme’ at county hall – finding services that can be modernised, postponed or cut – has helped to reduce the projected black hole by almost £20 million.

However, it still predicts an overspend this year of £17 million, which could increase to around £27 million because of inflation.

Reacting to the update from cabinet member for finance Phil Twiss (Conservative, Feniton), Cllr Brazil said: “I suppose the underlying problem that we have in Devon is a lack of funding from central government. And what we had on Friday was a particularly large fiscal event or mini budget or whatever they wanted to call it, but unfortunately failing to address any of the problems that we suffer here in Devon.”

He continued: “It’s almost as if they’re living in a sort of parallel universe that while our services are struggling to provide for the most vulnerable in our communities, there seems to be this idea that somehow you can magic it all away by giving tax cuts.

While Cllr Brazil said he had “some sympathy” for Cllr Twiss, he added: “I wonder at what point he’s going to say, ‘enough’s enough’ and break away from a government that seems hell bent on creating some kind of wild west economy without actually addressing all the incredibly pressing needs that we have here in Devon and particularly supporting the most vulnerable who need our help more than ever.”

Labour group leader, Councillor Carol Whitton (St David’s and Haven Banks), also expressed concern about the council’s current predicament and urged its leadership to lobby for more financial help.

“The situation is desperate and there is no prospect that it’s getting any better. At the end of the day, the books will balance this year because, if necessary, money will be pulled out of reserves. So, we won’t go bankrupt but what will happen next year [and] what will happen the year after that?

“Unless there is a rebooting and a rethink at Westminster about how local services are provided, how frontline services are provided, this situation is not going to change and I find that very depressing going forward.

“As Cllr Brazil says, I hope that you as cabinet members and as leader make it as plain as you possibly can to the powers that be that local government is really in trouble here. And it’s not just Devon, we know this, it’s a national situation.

In response, Cllr Twiss said they could be “absolutely sure” that members of the cabinet attending this weekend’s Conservative party conference in Birmingham will be “lobbying anybody and everybody we can to make the case for local government.”

“[Cllr Whitton]’s hit it on the head, local government is in trouble and unless it’s funded properly, we’re going to be in a lot more trouble. But I don’t take the doom and gloom approach … we will balance the books and we’ll do our very best.”

The updated total does not include a separate, projected £34.5 million overspend this year on caring for children with special educational needs and disabilities (SEND). This is because the government has told councils to put SEND overspends into separate ring-fenced accounts for three years while it develops a new funding plan.

The arrangement ends in April and Devon, and along with a number of other authorities, Devon is still waiting to hear from the government about what will happen with the overspends. The county’s current ring-fenced overspend on SEND – effectively debt – is projected to rise to £121 million by next year.

Cllr Twiss hopes additional funding will be provided by the Department for Education soon but admitted the authority will “have to change the way we work.”

A spokesperson for the Department for Levelling Up, Housing and Communities said: “We have made an additional £3.7 billion available to councils this year in recognition of their vital role. This includes an additional £40 million for Devon County Council to ensure they are able to deliver key services.”

Devon’s ruling cabinet noted the budget update, which concluded: “The good work underway must continue at pace and scale to ensure the authority is in the strongest position possible to continue to provide the best services we can within the resources available.”

Welcome to the economics of the rich

The British Pound has fallen so much that instead of buying a Rolex in the US, it’s actually cheaper to fly first-class from New York to London, buy the watch, stay in a 5-star hotel and fly back.

Sayan Chakravarty luxurylaunches.com 

What if I told you that you can buy a Rolex at a 30% discount? It immediately grabbed your attention, right? But it’s true; let me explain how. The British pound plummeted to a record low against the US dollar at the beginning of this week, which has created a unique opportunity for those looking to buy a Rolex or any other high-end luxury watch for that matter. Thanks to the currency slump, these watches are available at discounts of as much as 19 percent when compared to their corresponding prices in the US. To bring price parity, brands like Rolex, Patek Philippe, Omega, and Audemars Piguet have already hiked prices twice already this year in the UK. In fact, most brands increased prices by 5-7% on September 1. However, the rate at which GBP has crashed recently has made the attempts to hike prices pretty much useless.

But you must be wondering, that still doesn’t account for the 30% discount I told you about at the beginning. You see, the UK government is planning to bring back VAT-free shopping for international tourists to help to boost sales. If the promised policy changes go through, the total discounts available on luxury watches will be boosted to as much as 32 percent, according to a report by WatchPro. According to current prices, a steel Rolex GMT-Master II available for US$11,289 in the US can be purchased for US$9,293 in the UK with US dollars, while American visitors can save over $2,800 if they choose to buy a 41mm Rolex DateJust in Oystersteel.

We did a bit of digging around for information and a little math to discover something really interesting. For those in the US, it is currently cheaper to travel to the UK and buy a gold Rolex Cosmograph Daytona there even if they choose to fly first class. The highly-coveted Rolex model is around $10,000 cheaper in the UK, while the first-class ticket from New York to London on an American Airlines flight is currently hovering close to $8000. That still leaves you with $2000 in change. Add $1,000 for spending the night at the Bulgari London and you will still be richer by $1,000. The only caveat is it’s almost impossible to get your hands on the Rolex Cosmograph Daytona or any highly sought-after Rolex watch thanks to insane demand and not enough supply. Yet, we still expect a lot of people to take advantage of this unique situation.

Don’t forget to pack the travel sickness pills this weekend Simon

Conservative MPs are dreading their annual conference, which kicks off this weekend amid a raging economic crisis, splits on a list of big-ticket issues and an opposition surging to record poll numbers. The mammoth Liz Truss broadcast round that was designed to calm the markets, her backbenchers and the public appeared to have the opposite effect, with even some of her biggest champions plunging their heads into their hands and her detractors plotting to vote down her economic plans and topple her nascent administration. Those planning to attend the jamboree in Birmingham in 72 hours might want to pack travel sickness pills. It’s going to be turbulent. 

From Politico Playbook

‘Return to austerity’: Almost £50bn of cuts needed to fund tax breaks for rich, economists warn

Liz Truss’s government is on course to make public spending cuts of almost £50bn a year after the “unenforced error” of Kwasi Kwarteng’s mini-Budget, according to top economists.

Adam Forrest www.independent.co.uk

Experts at the Resolution Foundation warned that Britain’s public sector was heading for a return to the austerity period imposed by the David Cameron-led Tory government.

If Ms Truss refuses to U-turn on her borrowing-fuelled splurge on tax cuts, the level of spending cuts will have to be “broadly the same or bigger” than then-chancellor George Osborne set out in 2010 after the banking crash, the think tank said.

The government is likely to need to announce fiscal tightening of between £37 and £47bn a year in order to meet a commitment to get debt falling by 2026-27, the Resolution Foundation warned.

Ms Truss confirmed on Thursday that she and her ministers are now looking for cuts across government – declaring that there are “plenty of areas” where taxpayers’ money could be saved.

“There are always ways that we can organise things more efficiently. What I want to make sure is that taxpayer money is focused on frontline services,” the prime minister told broadcasters.

Whitehall sources told The Independent that the Treasury had written to all departments asking them to find savings. Asked about the efficiency drive, a spokesperson said: “The British taxpayer expects government to run as efficiently and effectively as possible.”

The prospect of austerity has sparked anger among unions and campaigners, who warned the cuts to pay and services would be “an act of national vandalism and a huge betrayal of the British people”.

A group of 18 trade unions wrote to the PM demanding a “cast iron assurance” she would honour a Tory leadership campaign pledge that there would be no cuts to public services, already struggling with the impact of inflation.

“Frontline services are already at breaking point. They must not be sacrificed to make the top 1 per cent even richer,” said the letter signed by the TUC’s Frances O’Grady, Unite’s Sharon Graham and others. “We won’t allow the social fabric of this country to be destroyed.”

Mr Kwarteng has promised a “medium-term” fiscal plan on 23 November to spell out how he will balance the nation’s finances and a £45bn-a-year tax giveaway disproportionately benefiting the rich.

The Resolution Foundation said the market turmoil which has seen traders dumping government bonds had increased the UK’s debt interest costs by around £12.5bn a year by 2026-27.

Torsten Bell, the think tank’s chief executive, said the huge package of tax cuts “without any explanation of how they would be paid for” was the “biggest unforced economic policy error of my lifetime”.

Warning of “unpleasant” cuts ahead, the top economist added: “The intention may have been to emulate Margaret Thatcher – but the reality may involve looking a lot like George Osborne in the years ahead.”

The Resolution Foundation suggested that the “painful” policy choices that the Treasury would now have to consider include cutting public investment projects and abandoning the pledge to increase defence spending to 3 per cent of GDP by 2030.

The think tank said the government could consider uprating benefits and pensions by earnings instead of inflation – a 4 per cent real-terms cut. This would save £20bn over two years, but would cost a typical low-income family with two children over £1,000 a year.

NHS Providers have warned that cuts to the health service would represent a “huge setback” to a service already stretched by a decade of austerity. “NHS budgets are already severely stretched,” Miriam Deakin of the trusts’ membership body told The Independent.

Unison general secretary Christina McAnea said the prospect of NHS budget cuts was “terrifying” and would exacerbate the existing “exodus” of staff leaving after the Covid crisis.

School leaders also reacted with alarm to the prospect of a return to austerity. Paul Whiteman, general secretary of school leaders’ union NAHT, told The Independent: “An economic policy of further cuts to public services at this point would be disastrous.”

Treasury minister Chris Philp said government departments have been asked to stick to existing spending limits during the current three-year settlement – as well as being asked to make efficiency savings.

However, Mr Philp argued on BBC Radio 4’s Today programme that “iron discipline” on public spending would not necessarily lead to austerity.

“If we can get economic growth going, which is our intention, it will lead to wages going up and lead to new and better jobs being created and will ultimately pay the taxes that fund public services like health, the NHS and so on,” he said.

Mr Philp suggested the government may not hike benefits in line with inflation in April 2023 as promised, while Mr Kwarteng said it was “premature for me to come to a decision on that”.

Charities warned that U-turning on a commitment to increase benefits in line with inflation would lead to disabled people “starving and freezing in their own homes”.

The Child Poverty Action Group said “unless benefits are uprated to match inflation, [children] will also become the casualties of a collapsing economy”.

Liz Truss to meet head of UK’s independent fiscal watchdog after market meltdown

Prime minister Liz Truss and chancellor Kwasi Kwarteng will meet the head of Britain’s independent fiscal watchdog today following a market meltdown triggered by the mini-budget.

Alisha Rahaman Sarkar www.independent.co.uk

In an unusual move, Ms Truss and chancellor Kwarteng will meet the chairman of the Office for Budget Responsibility (OBR) Richard Hughes to discuss the economic and fiscal developments.

Mr Kwarteng unveiled a string of tax cuts last week in a fiscal statement that was not accompanied by OBR forecasts. The forecaster said it had offered to prepare a draft for the new chancellor in time for the mini-budget but it was not taken up.

Now, a group of lawmakers have reportedly called for the forecast to be released immediately.

The chancellor has insisted that he is “sticking with” his mini-budget, despite it spooking markets and forcing an emergency Bank of England intervention.

Meanwhile, Tory MP Sir Charles Walker said the Conservative Party faces an existential threat after Labour surged to a 33-point lead in one poll.

He suggested the Conservatives would “cease to exist as a political party” if the 33-point lead is repeated at a general election.

Latest Opinion Polls 

Conservatives currently tanking

www.politics.co.uk (Extracts)

The Result Of A General Election Today

In the first three weeks of the Liz Truss premiership, the Labour lead over the Conservatives has grown considerably and is now trending at 11.2%.  This 11.2% average lead relates to a period before Chancellor Kwarsi Kwarteng’s ‘mini budget’ on September 23 had a chance to feed into the opinion poll numbers.

Polling averages extrapolated in the three weeks running up to 27 September place Labour on 42.7%, the Conservatives on 31.5%, and the Liberal Democrats on 11.2%.

If a General Election was held today, and the public vote reflected that average polling position, this would likely lead to the following composition of the House of Commons:

The result of a general election is projected as a hung parliament with Labour as the largest party. but some 8 seats short of an outright majority. 

Latest Polls

YouGov (25 September) which placed Labour on 45%, the Conservatives on 28%, and the Liberal Democrts on 9%.

Redfield and Winton (25 September) which placed Labour on 44%, the Conservatives on 31%, and the Liberal Democrts on 11%.

Ipsos (22 September) which placed Labour on 40%, the Conservatives on 30%, and the Liberal Democrts on 13%.

Public Opinion since the 2019 General Election

In the aftermath of the 2019 General Election, the Conservative party enjoyed a healthy lead in the opinion polls. With the Conservatives polling over 50%, this lead briefly surpassed 20% at the beginning of the Covid  pandemic in March and April 2020.

In late February 2022, and prior to the Russian invastion of Ukraine, there were some tentative signs that the Conservative position had recovered slightly from its early 2022 lows.

With the Russian invasion of Ukraine heavily dominating the UK news agenda, the position of the UK’s political parties became somewhat becalmed during the spring on 2022 with no notable movements in the polls.

However amidst mounting pressure on Boris Johnson’s position in late June, and the drawn out nature of his resignation in early July, the Labour party  once extended their lead over the Conservatives in the polls.  This lead was trending at around 8% at the point that Liz Truss became prime minister in September 2022.

Rather than experience a new prime ministerial bounce, in September 2022, the picture was not positive for Liz Truss.  In the first three weeks of her premiership, the Labour lead over the Conservatives extended to 11%.

Pollsters showed that Liberal Democrat voting intention during most of this Parliament was constant at around the 9% mark with only temporary uplifts above this point.  In the autum of 2022, the party was polling around the 11%.

Dear Colleague

There are reports that Kwasi Kwarteng is writing to various MP WhatsApp groups for support.

Owl imagines the “Dear Colleague” message:

Dear Colleague,

I understand your concerns that you may lose your seats at the next election, but we have to make tough choices if I am to stay Chancellor and Liz as PM.

Our priority is to grow the economy so that everyone can get a slice of a bigger cake while those at the top enjoy the cream.

The only way to do this is by cutting taxes at the top, and that is what we must deliver. There is no alternative.

If necessary, we must fund this by reviewing government expenditure, even the inflation uplift on benefits. Nothing is off the table. 

We will show markets that our plan is sound. At the moment it is all based on ideology and my team of teenage Spads need to flesh out the details. When we have a plan, of course we will ask the OBR to demonstrate that it is sound, credible and will work to drive growth. Their existence as an independent organisation will depend on it.

We need your support to do this as the only people who win if we divide will be ordinary people, rather than the rich who are the only ones driving the economy and funding our party.

I am always available for a meeting and I hope we can engage dynamically in the coming weeks.