Category Archives: Local Government Finance

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24 Apr 2019

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Accountability, East Devon Tories, Local Government Finance, Voting

Less tax, many fewer services – lowest investment in public services in EU

“Spending on public services in Britain would be higher by £2,500 per person each year if the government matched comparable European levels of funding, an analysis shows today.

The Institute for Public Policy Research found that Britain spends about 40 per cent of GDP on public services, down from 47 per cent in 2010. European spending has also fallen, but comparable EU countries still spend an average of 48 per cent of their GDP on areas such as health, education and welfare, the think tank said.

Austria, Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Spain and Sweden were classed as the comparable countries.

Britain’s tax burden is also lower than the European average. Employee taxes amount to about 11.6 per cent of average income in the UK, compared with 15.4 per cent in the EU.

The total burden of taxation in Britain is 33.3 per cent compared with 41.8 per cent. The figures, from the left-wing think tank, are likely to be seized on by Labour as evidence that its plan to increase taxes to support greater public spending is not as radical as Conservative critics would claim.

Harry Quilter-Pinner, senior research fellow at the institute, said that its report showed that after years of austerity there was now a need to increase public sector spending. “Our neighbours have consistently invested more in welfare and public services and consistently deliver better social outcomes than us,” he said. “We need a fundamental shift in our approach to investment in this country to deliver high-quality social and childcare, a life-long education system, 21st-century healthcare and a properly funded benefits system. Ending austerity must be more than a political soundbite.”

The report also highlighted international rankings by the OECD that it said showed that Britain was lagging behind comparable European countries in social outcomes. These showed that out of 11 countries the UK was ranked ninth for life expectancy and eighth for child poverty.

The group said that since 2010 life expectancy in the UK, which had consistently risen over the previous century, had stopped rising. It added that health inequalities were also significant, with the poorest in society living 8.4 years less than the richest.

The UK did, however, have the second lowest levels of long-term unemployment and lower levels of insecure employment than most of the other countries surveyed.”

Source: The Times (pay wall)

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23 Apr 2019

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Accountability, Councillor Cathy Gardner EDA, East Devon Alliance, EDDC, Knowle/Honiton/Exmouth relocation, Local Government Finance

East Devon Alliance Councillor Gardner clarifies Sidmouth Herald EDDC debt story

Owl reported this story from the Sidmouth Herald in full yesterday:

https://eastdevonwatch.org/2019/04/22/more-than-86-6million-in-outstanding-loans-is-owed-by-east-devon-district-council/

East Devon Alliance councillor Cathy Gardner has contacted EDW to clarify the story:

“To my knowledge (as a District Cllr), EDDC has over £80m in debt because it had to borrow money to hold on to its council housing when the conservative government were making councils sell it off. So this is debt for a good & bad reason!

I’m surprised that the ‘politically neutral’ press officers have not added this to their comment to the Herald. I’ve objected to the council proposing to borrow money to invest in commercial property (to generate income), something else forced on them by the conservative government cuts to council grants (now zero).

The relocation from the Knowle is another matter. If re-elected I will continue to push for transparency on costs and to see if any of the Conservative group can ever prove break even.”

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12 Apr 2019

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Accountability, Austerity cuts, Inequality, Local Government Finance

Deprivation no longer a criterion for extra local authority funding

“Labour leader Jeremy Corbyn this week chose local government funding as the central focus of Prime Ministers Questions, describing the Fair Funding Review as an Orwellian phrase.

Local government organisations have voiced concerns that poor areas of the country will lose out under government proposals to remove deprivation as a factor in calculating the foundation formula for grants to councils.

Speaking in the Commons on Wednesday, Corbyn said that the Fair Funding Review proposals are likely to make things worse for struggling local authorities.

He said: “Tory proposals on the new funding formula for councils will make poorer areas even poorer. “They are removing the word ‘deprivation’ from the funding criteria. “In a phrase that George Orwell would have been very proud of, they have called this the fairer funding formula.”

However, May hit back, saying: “No, that is not what we are doing. “What we are doing is ensuring that we have a fairer funding formula across local authorities. “We are also ensuring that we are making more money available for local authorities to spend.”

However, Corbyn pointed to concerns raised by local authority representatives over the removal of the deprivation factor. He said: “The Society of Local Authority Chief Executives has called the fairer funding formula decision ‘perverse’. “Even before this new formula kicks in, councils are losing out now.

“A Conservative council leader said earlier this year: ‘We are really, really short of money…I mean there is no money.’”

Publication of the review proposals sparked an angry response from urban councils, which said they would be hit by the removal of the current deprivation measure.

And in February, even the County Councils Network (CCN), whose members are set to benefit from the move, said: “Considering recent debate within the sector on deprivation we recognise that the government may wish to consider whether deprivation should be included…”

However, the CCN it said that this should only be done at a small weighting, if its inclusion was supported by evidence, and did not compromise the review’s principles of simplifying the system.

Paul Carter, chairman of the CCN, said: “…if we are to see this review through – and if we are to grasp this opportunity – compromise and pragmatism on all sides of the local government sector, will be necessary.” …”

Corbyn attacks ‘Orwellian’ Fair Funding Review

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31 Mar 2019

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Accountability, Austerity cuts, Local Government Finance, Poverty

Dying for a profit

“Burial and cremation fees have soared by up to 124 per cent in four years – forcing some ­families into debt, research shows.

The biggest increase is in Poole, Dorset, where burial costs have shot up by 124 per cent from £1,450 to £3,255.

But the most expensive place to be laid to rest is Wandsworth, South London, which charges £4,861 per plot.

The figures were revealed by insurance giant Royal London, which says town halls are ramping up prices to make up for government budget cuts. …”

https://www.mirror.co.uk/money/families-plunged-debt-burial-fees-14209449

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23 Mar 2019

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Accountability, Asset sweating, Local Government Finance

How to make very bad council decisions – leave them to clueless councillors!

Owl says: Do you think this applies to Tavistock? Dream on!

“Auditors have blown wide open failings in the way plans were cooked up for a sprawling Premier Inn development in a leafy Devon town.

West Devon council chiefs have been criticised for the way they led multi-million plan proposals to build over a key car park in the heart of Tavistock.

A damning new independent dossier reveals how Invest to Earn – a team of three councillors tasked with leading the project – lacked crucial knowledge of the property market and received no training to ensure they knew every risk before taking decisions.

A lack of communication between elected members about the gravity of the development, ‘hostility’ on social media and a failure to access key documents online all inevitably brought down what many deemed a pipe dream, the public file reveals. …”

[read on for more shocking information how bad decisions got worse]

https://www.plymouthherald.co.uk/news/plymouth-news/premier-inn-tavistock-report-findings-2665718

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20 Mar 2019

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Accountability, Austerity cuts, Local Government Finance, NHS (local), Scrutiny, Transparency

Outgoing audit chief tells government some home truths

“I still get angry – and that is the word for it, angry – 10 years into the role, when I see badly-thought-through programmes and wasted public money,” says outgoing watchdog chief Sir Amyas Morse. “And the reason I’m angry is because the citizen ends up picking up the tab. They are the ones who end up suffering.”

For almost a decade, as comptroller and auditor general – the head of the National Audit Office – it’s been Morse’s statutory duty to keep an eagle eye on the spending of central government departments, holding ministers and civil servants to account for cost overruns, project mismanagement and profligacy with taxpayers’ money.

He doesn’t have far to look. As he prepares to leave his post in May, Morse’s final public speech at the Institute for Government last week included a damning list of failures: Crossrail costing £2.8bn more than forecast; changes to probation costing £467m to put right; the smart meters fiasco that will cost at least £500m more than originally estimated; and the Ministry of Defence’s latest unaffordable and unsustainable 10-year equipment plan going over budget by at least £7bn. And that’s just a selection from the past few months.

Morse looks back in anger at the billions that could have been spent on vital services, wasted instead through what he calls “inappropriate bravado” on the part of government ministers, lording it over cowed civil servants, behind an increasing amount of secrecy and spin. “We don’t need people jumping out of an aeroplane in the dark with a parachute of taxpayers’ money,” he says.

A proud Scot – his only meeting with Theresa May was a “brief conversation” at a No 10 Burns Night last year – Morse cares passionately about public services. While his upbringing has contributed to his concern for fairness, it’s his decade at the watchdog, to which he came from a senior position in consultancy PricewaterhouseCoopers via the MoD, that has fuelled his rage over the wasteful ways of too many government ministers. “I really realised that society belongs to us. We’re all paying for it.”

Public money is finite, he points out. There is no magic money tree. When money is lost in one place, it’s taken away from another programme, usually one that’s easier to cut. Every wasted £1bn, he says, is enough to run NHS England for three days, fund 625m A&E attendances, 135m day cases in hospital, or 4m ambulance attendances.

Morse has warned the government that it needs to invest more in the NHS and social care, to meet the needs of an ageing population. In 2016-17, the UK spent just over £170bn on health and social care – more than 10% of GDP, but less than the 11.2% of GDP Germany spent in 2015 on health alone. …”

https://www.theguardian.com/society/2019/mar/20/amyas-morse-head-national-audit-office-ministers-waste-taxpayers-billions

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18 Mar 2019

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Accountability, Austerity cuts, Local Government Finance, NHS (local), Privatisation

Shadow state – part 3

And now the Chartered Institute of Public Finance and Accounting agrees privatisation isn’t working. The National Audit Office and the Government’s own Public Accounts Committee have said the same.

Will this cause a change of policy – particularly in the NHS? Not a chance!

“The collapse of outsourcing giant Interserve will be “costly and disruptive” for the public sector, a public services commentator has told PF.

Interserve, one of Britain’s biggest government contractors, was due to file for administration this evening. This was after just under 60% of the company’s shareholders voted against a rescue plan earlier today.

The business holds thousands of public sector contracts, including for local government, cleaning schools and hospitals. It also runs catering and probation services as well as managing construction projects.

John Tizard told PF that public sector clients will need to “spring into action either to bring the services back into public management or to broker the contracts to other contractors”.

The firm’s collapse will likely be “costly and disruptive” for public services, he added. The ‘deleveraging plan’, proposed on Friday, would have seen creditors take control in a ‘debt-for-equity’ swap. It was rejected 59% to 41% by shareholders.

The rescue plan would have meant lenders being given the greater number of shares in the business with the shareholders’ stake being reduced to 5%, the BBC has reported. A US hedge fund Coltrane, which owns 27% of the company, voted to reject the proposals.

Tizard told PF: “It’s another question mark over the appropriateness of outsourcing particularly on this scale – to companies that have business models which are risky and fragile and where ownership changes.

“They are likely to go into administration because Coltrane has said they won’t vote for the deal, but can we really afford to have key public services decided by US hedge funds?” he queried.

Tizard said he had no doubt that contingency plans will have been drawn and added that it was now necessary for public sector clients to implement these.

Interserve employs 45,000 people in the UK. Its website also states that it provides probation services for 40,000 people on behalf of the Ministry of Justice.

A damning report from the National Audit Office recently highlighted the failings of prison reforms, which saw probation services transferred to the private sector.”

https://www.publicfinance.co.uk/news/2019/03/public-sector-likely-suffer-collapse-interserve

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18 Mar 2019

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Accountability, Austerity cuts, Local Government Finance, Privatisation

Privatisation: ” a shadow state apparatus run solely for profit”

“Oh, how we laughed. Failing Grayling, the transport secretary, Chris Grayling, the Mr Bean of contemporary politics, had awarded a cross-Channel ferry contract to Seaborne, a company that had no ferries and had never run a ferry service. Six weeks later, the contract was torn up.

The trouble is, the laugh’s on us too. For it’s not just Grayling who’s failing. The Seaborne style of awarding contracts – never mind the competence, just get the signature – has long been the public sector norm for outsourced work. The result has been scandalous services and collapsing companies.

Consider Interserve. It’s another of those corporations, like Capita, Carillion and Serco, with bland names, barely visible to the public, but which have become a kind of shadow state, providing much of Britain’s essential public services.The outsourcing of public services began as a Thatcherite policy in the late 1980s, became turbocharged under New Labour and was pushed further still by the coalition government after 2010. An Institute for Government report last year calculated that a third of government expenditure – £284bn – was disbursed to external suppliers handling everything from parking permits to immigration control to the maintenance of nuclear warheads.

But why should the same company be deemed capable of motorway construction and probation management, of sewer repairs and hospital catering? And why is this not as scandalous as a company with no ferries being awarded a ferry contract?

Interserve is not unique. Take Serco, which began life as the British arm of the US entertainment firm RCA. By the late 1980s it had changed its name and aggressively moved to take advantage of the market in government outsourcing. Within 25 years, it was running everything from out-of-hours GP services to asylum detention centres.

It’s not uncommon for companies to change strategy or seek new markets, but this usually involves having some expertise in the subject. When it comes to public service contracts, however, expertise appears to mean primarily the ability to win contracts. Serco’s “panache in the bidding process”, one report observed, allowed it to “beat out competition from specialist firms”.

Inevitably, this has led to a constant stream of debacles. From charging for the tagging of nonexistent criminals to accusations of neglect and sexual assault at Yarl’s Wood migrant detention centre, from allegations of data falsification in an out-of-hours GP service to disastrous work capability assessments, the one thing that outsourcing companies have never been able to outsource is the stench of scandal.

A decade ago, such companies were boasting about reaping the rewards of the financial crash. Paul Pindar, CEO of Capita, told the Financial Times that he’d be “deeply disappointed” if the company did not double revenues from government contracts within five years. In fact, within a decade, Capita was knee-deep in debt and issuing profit warnings. Serco’s profits had already plummeted. Carillion collapsed. And now Interserve is in administration.

Government cuts may have opened up new markets, but they also squeezed profit margins. Combined with greed and overstretch and never-ending scandals, outsourcing companies have been forced into a “bankrupt” business model of chasing new public sector contracts to make up for the razor-thin margins in the old ones.

Shareholders have seen assets disappear and creditors have lost money. But the real losers are NHS patients, benefits claimants, asylum detainees – and the tens of thousands of workers employed by such companies, often in gig-economy conditions.

It’s time we recognised that the policy of giving construction or facilities management companies power over health provision, welfare assessment or prisoners is as rational as awarding a ferry contract to a company that’s never ferried a bugger in its life.”

https://www.theguardian.com/commentisfree/2019/mar/17/we-scoffed-at-chris-grayling-ferries-but-his-way-is-now-a-public-service-norm

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15 Mar 2019

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Accountability, Audit (EDDC), Local Government Finance

“Local bodies poor at securing value for money, says Public Accounts Committee “

“An increasing number of local public bodies are demonstrating “significant weaknesses” in securing value for money, MPs have warned.

Auditors found more than 20% of local authorities, NHS bodies and police and fire authorities in England did not have proper arrangements in place to achieve value for money in 2017-18, the Public Accounts Committee has said.

Central government’s measures to stop this were “limited”, the watchdog added.

NHS bodies, like Clinical Commissioning Groups and hospital trusts, were found to be the worst public bodies for assuring taxpayers’ money is spent effectively, according to the PAC report out today.

Qualified audit opinions – which signify weaknesses in an organisations accounts – were issued to 38% of NHS bodies in the last financial year, compared to 29% in 2015-16, it said.

In 2015-16 18% of non-NHS local bodies were given a qualified audit opinion, compared to 22% in 2017-18.

There were 495 local authorities, local police and local fire bodies subject to external audit, with responsibility for £54bn of net revenue spending in 2017-18. Another 442 local NHS bodies received funding from the Department of Health and Social Care of approximately £100bn.

Only 5% of local bodies had implemented changes to address weaknesses highlighted by auditors last year, according to information obtained by the National Audit Office.

The PAC noted that some bodies were failing to put enough information in the public domain, including reports from external auditors and suggested that central government should “make clear their expectations” for information that should be made public helping citizens hold bodies to account.

“Local bodies should also be taking auditors’ concerns seriously and addressing them promptly, but there appear to be few consequences for those who do not,” the report said.

The committee said that central departments were not doing enough to make sure that local bodies take “prompt corrective action”.

Meg Hillier, chair of the PAC, said: “Taxpayers must be assured that their money is well-spent but in too many cases local bodies cannot properly safeguard value.

“Particularly concerning are NHS bodies such as CCGs and hospital trusts: last year almost two in five did not have adequate arrangements.

“It is vital that local bodies take auditors’ concerns seriously, address them swiftly and ensure meaningful information on performance is made accessible to the public.”

DHSC and the Ministry of Housing, Communities and Local Government have been contacted for comment.”

https://www.publicfinance.co.uk/news/2019/03/local-bodies-poor-securing-value-money-says-pac

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12 Mar 2019

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Accountability, Audit (EDDC), Local Government Finance

Retiring National Audit Office Chief: ministers with no qualifications and “inappropriate bravado when it comes to spending taxpayers’ money”

“The relationship between ministers, accounting officers and civil servants is currently not working, the outgoing auditor general of UK’s spending watchdog has said in his last speech in the role.

Some ministers “see themselves more or less as chief executive officers but without the qualifications”, National Audit Office head Amyas Morse told an event on accountability at the Institute for Government think-tank’s offices this morning.

The comptroller said this meant ministers sometimes made decisions prioritising a project “close to their hearts” – when they should be held accountable but are not – which “has led to the abandonment of good practice”, he said.

The problem rests with the “interaction between ministers, accounting officers and civil servants,” Morse said. “That really needs to be addressed. I don’t think the relationship is where it ought to be at the moment.”

He said he did not see ministers having a say in the appointment of accounting officers as producing a “healthy result”.

Accounting officers can only ensure value for money for the public purse “if they are in a position where they are sufficiently influential to assert the importance of public value”, he added, suggesting they currently do not have this influence.

Morse said the civil service had become much more professional over the past few years, partly through initiatives like the Infrastructure and Projects Authority. The authority is a centre of expertise for delivering infrastructure and major projects.

But he added civil servants, who he noted often feel they need to defend ministerial decisions, required “greater clarity” on how they were was supposed to work alongside those decisions.

Morse talked of the importance of transparency in public life and the “outbreak of secrecy” in government over Brexit.

This secrecy had “slowed down the ability of the civil service to react and may have helped create an element of distrust more widely in parliament,” Morse said.

He suggested there was currently “inappropriate bravado when it comes to spending taxpayers’ money”. He highlighted Crossrail and the probation service’s contracting as examples of where government had recently overspent. “I didn’t have to go far into my in-tray to find those,” he said.

Morse will hand over the reins as auditor general and comptroller to CIPFA fellow Gareth Davies on 1 June.”

https://www.publicfinance.co.uk/news/2019/03/outgoing-nao-chief-questions-ministerial-accountability-over-public-spending1

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8 Mar 2019

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East Devon economy, East Devon Growth Point, EDDC, Local Government Finance

EDDC pouring £3m into new airport road

“The £3m scheme will provide sufficient access in order to develop the Airpark and will be forward funded by East Devon District Council.

The road that runs past Exeter Airport and down to Hampton by Hilton hotel is set to be widened – and will enable a new 17 acre business park to be built.

The Airpark – to be built next to the Flybe Hangar – is one of the four planned ‘Enterprise Zones’ – but the substandard nature of Long Lane and the limitations to current highway network are a direct barrier to it coming forward.

An enhancement scheme, which will see the widening of Long Lane from the Airport Terminal entrance, past the hangers and the FlyBe Academy/Hampton by Hilton hotel through to Harrier Court in the east.

While Long Lane is being widened, a new road to connect Silverdown Office Park to the FlyBe Academy access road, known as the “Silverdown Link”, will be built, and when the Long Lane works are finished, the Silverdown Link will become a permanent bus only link.

The cabinet on Wednesday night unanimously recommend to full council to borrow up to £3m against ring fenced business rate income to implement the scheme and enter in to a funding agreement with Devon County Council to deliver it. …”

https://www.devonlive.com/news/huge-plans-exeter-airport-road-2620576

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8 Mar 2019

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Accountability, Austerity cuts, Economy, Education (local), Health and Social Care (local), Inequality, Local Government Finance, NHS (local), Police (local), Poverty

“Sticking plaster won’t save our services now”

“Britain’s fabric is fraying. It’s not just the occasional crisis: schools that can’t afford a five-day week, prisons getting emergency funding because officer cuts have left jails unsafe, a privatised probation service that isn’t supervising ex-criminals. The services we take for granted have been pared so deeply that many are unravelling. The danger signals are flashing everywhere.

Local authorities have lost three quarters of their central government funding since 2010. They are cutting and selling off wherever possible: parks, libraries, youth services. The mainly Tory-run councils in the County Councils Network warned last year that their members were facing a “black hole” and were heading for “truly unpalatable” cuts to key services, including children’s centres, road repairs, elderly care, and rubbish collection.

The chief executive of the Local Government Information Unit, a think tank, says councils are already on life support. Yet they face their biggest fall in funding next year. Volunteers are already running some libraries and parks. Councils will have to cut further; Theresa May’s new stronger towns fund is far too small to make a difference.

The criminal justice system has been stretched beyond reliability. The number of recorded crimes being prosecuted is falling and runs at just 8.2 per cent, as funding cuts bite, evidence isn’t scrutinised, courts close and neither defence nor prosecution teams have adequate resources or time. The chairman of the Law Society’s criminal law committee says “we are facing a crisis within our justice system, we are starting to see it crumble around us”.

In health, waiting times at A&E have hit their worst level in 15 years; in some surgeries the wait for a GP appointment can be weeks; and this week public satisfaction with the NHS fell to its lowest for more than a decade, at 53 per cent, down from 70 per cent in 2010. Britain’s spending watchdog, Sir Amyas Morse, departed from his usual role as a tenacious critic of government waste to warn us, bluntly, that May’s recent boost for the NHS is nothing like enough. An ageing population will need higher spending. The falling budgets for social care are “unsustainable”.

The news in education this week was that 15 Birmingham primary schools will close at lunchtime on Fridays because they can’t afford to stay open. It’s the most vivid recent example of the slashing of budgets per pupil by almost 10 per cent, in real terms, since 2010. Sixth forms have lost a quarter of their funding. Schools have reduced teaching hours, cut A-level courses in maths, science, languages, sacked librarians, school nurses, mental health and support staff, and cut back on music, art, drama and sport.

When this process began in 2010 I backed it. Like many people, I had come across enough unhelpful, incompetent jobsworths to know the state was wasting money. As a Labour supporter I’d written at the end of the Brown years warning that Labour was destroying its case for high public spending by squandering much of it.

Privately, many in the system agreed. One chief executive of a Labour council told me he’d been relieved to get rid of half his staff in the first couple of years; it had cleared out the pointless and lazy, and forced everyone to focus on what mattered and what worked. Other chief executives agreed cheerfully that they too had been “p***ing money up against the wall”.

But we are years past that point. We have moved beyond cutting fat, or transformation through efficiencies. Instead we are shrivelling the web of hopes, expectations and responsibilities that connect us all, making lives meaner and more limited, leaving streets dirtier, public spaces outside the prosperous southeast visibly neglected.

So many cuts are to the fabric that knitted people together or gave them purpose. The disappearance of day centres for the disabled, lunch clubs for the elderly or sport and social clubs for the young is easy to shrug off for the unaffected. But the consequences are often brutal for those who lose them, isolating people and leaving them with the cold message that unless you can pay, nobody cares. The hope that volunteers and charities could fill all the state’s gaps has evaporated. They haven’t and they don’t. Is this how we want Britain to be, and if not, where does this end?

Austerity was never meant to be lengthy, just a few tough years to drive reform. It was intended to be over by 2017, when a thriving economy would float us off the rocks, but events did not go to George Osborne’s plan. The economy is not about to rescue us now, either. All forms of Brexit are going to slow our growth.

Which leaves us with three choices. We could accept the decay of services, and decide to live in a crueller, more divided, more fearful country. If we didn’t want that, we could back a party that planned higher taxes to fund them — Britain’s tax burden is currently 34 per cent, three quarters of the French, Belgian and Danish rates.

Alternatively, Philip Hammond could seize the chance to start reversing this policy in his spring statement next week. In America many Republicans and Democrats, for different reasons, have begun to treat deficits with insouciance, after years of obsessing over them. What matters is whether governments can afford the interest on the debt. Rates are low. Britain desperately needs investment in its people and their futures. The cautious Hammond should open the financial taps.”

Source: The Times (pay wall)

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6 Mar 2019

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Accountability, Austerity cuts, Inequality, Local Government Finance

“Our Council Funding Crisis Will Not Be Solved By A Small Pot To Fix Short-Term Problems”

“When people voted to leave the European Union in 2016 it expressed a clear demand for change. Many felt that the places where they lived had been locked out and left behind by prosperity while they could not see opportunities for them and their families to achieve a better life.

On Monday, the government announced a new £1.6billion Stronger Towns Fund to be spread over seven years – but the lukewarm response has reflected the urgency for much more serious and sustained investment in all the communities that need it. There needs to be investment that people can see and feel, and prosperity that they feel they are a part of.

The announcement reflects the needs of many of our towns, but we need to see far greater ambition in terms of boosting job prospects and living standards throughout the UK. We need a series of significant investments as part of a long-term plan to transform prospects and help the four million people in working poverty in the UK.

The Government’s commitment to deliver on its Shared Prosperity Fund – a manifesto pledge to replace the EU structural funds for economically disadvantaged places – has far more potential. Fully implemented, it could make a much more significant difference to people in places that have been locked out of prosperity. EU Structural Funds are currently worth £2.4billion a year in EU and national match funding.

But we’ve been waiting over a year for the consultation to be published on what the Shared Prosperity Fund should look like, let alone seen any progress on delivering for the places that need it. It’s not just towns that are struggling, rural areas are too and some of the lowest employment and pay is found in cities such as Nottingham, Leicester, Manchester, Liverpool and Birmingham.

“I’ve done labouring and warehouse work, manual labour most of my life … work with bricklayers, joiners, different trades. Warehouses, packing … I’d prefer to … have a decent wage. I’ve never had secure employment. The longest I’ve worked is about three months max. There have been big stretches of unemployment, like years – two years.”

At JRF we root our work in the experiences of people in poverty, and as this man describes too often work provides an income but fails to deliver the security that enables people to build a better life. In parts of the UK this is sometimes all that is effectively on offer. While the country overall has a great story to tell on employment some people are locked out of this success because of where they live, with some places reporting employment rates over ten percentage points behind the average.

The Government has emphasised that both the Stronger Towns Fund and SPF will focus on closing productivity gaps – but this must be done in a way that delivers inclusive growth. That means growing the economy and creating jobs for those locked out of the labour market, making sure people have skills to get on at work, and improving firm performance in low pay sectors like hospitality and retail.

HuffPost’s joint investigation with The Bureau of Investigative Journalism into local authority selloffs, especially those being used to fund redundancies and cuts, demonstrates how these economic challenges can be compounded, leaving places with a sense of decline. Where towns, cities and rural areas lose jobs, services and their sense of purpose, people can be swept into poverty of every kind.

Living without secure employment means living without the ability to save or plan – one of the burning injustices which the Prime Minister pledged to tackle on taking office. It is absolutely right that we look at how to help communities around the country – whether it is Wigan, Bassetlaw or Doncaster. But the way forward must solve deeper problems than the parliamentary conundrum which currently faces the Prime Minister.

It is essential that the pledged funding via the Shared Prosperity Fund is based on need, as the communities secretary James Brokenshire pledged the new Stronger Towns Fund would be. Funding needs to recognise the real experience of economic challenges facing towns and cities across the UK, as highlighted in the HuffPost investigation.

People around the UK need to know how this wrong is going to be righted through the Brexit process and beyond. Implementing the Shared Prosperity Fund needs to be the priority for beginning to shape a new deal.

If the Government is serious about transforming towns, and anywhere else people are not enjoying the opportunities or living standards prosperity brings, it needs to bring serious money to the table. A small pot to fix short-term problems is not ambitious enough and may fail to solve the conundrums of either local prosperity or parliamentary arithmetic.

Campbell Robb is the chief executive of the Joseph Rowntree Foundation

https://www.huffingtonpost.co.uk/entry/local-government-cuts_uk_5c7ea408e4b0e62f69e6da2d

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5 Mar 2019

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Accountability, Austerity cuts, Local Government Finance

” ‘Totally unfair’ and ‘no way to run public services’: Two councils slam government as £40m total cuts approved”

Owl says: but Conservative policy is to shrink or eliminate the “state” (i.e. public services) and use private companies to make profits out of services, so actually it IS their way of doing things and IS extremely successful!

“Two councils have approved over £20m worth of cuts as both authorities slam an “ever-increasing tough financial climate” due to austerity and a “totally unfair” year of drastic government cuts.

Doncaster Council and Nottingham City Council yesterday both approved budget proposals to make £21m and £23m of savings respectively, with substantial council tax hikes and job losses amongst the plans.

Nottingham council said its central government funding had fallen from £127m in 2013 to just £25m for next year, leading to difficult decisions such as the initial reduction of 27 jobs “with more likely.”

Other cuts at the authority include reducing Link Bus services, a range of changes to adult social care, reducing contributions to its youth centre, and a 2.99% council tax rise.

The council said independent analysis shows that places like Nottingham with higher deprivation have been hit harder by government funding cuts compared to areas such as Surrey, leaving the authority “with no other option” to enforce cuts and raise council tax.

Nottingham City Council leader Jon Collins went further, stating that the tenth budget in a row with funding cuts was made worse by the “totally unfair blatant favouring by government of Conservative-led councils in affluent southern areas.”

“It means setting this budget has been extremely difficult and we don’t take any pleasure in making decisions which detrimentally affect local service users.”

Doncaster Council has had to use some of its one-off reserves to meet its budget gap for 2019-20 and still forecasts a further deficit of £13m for the following year.

It has proposed a 5% council tax increase using the social care ‘precept’ to generate over £5m towards plugging the budget gap, but stresses that £323m will be given to capital funding for projects to stimulate growth over the next four years.

Mayor Ros Jones also slammed the government over a lack of certainty around local government funding.

He stated: “The government continues to cut our funding with no plans for the future.

“Doncaster has been hard hit and it is beyond belief that there is no firm plan for the sustainability of local government finances post 2020.

“It’s all well and good having individual funding streams and one-off pots of money that we can bid for but it’s no way to run public services.”

http://www.publicsectorexecutive.com/Public-Sector-News/totally-unfair-and-no-way-to-run-public-services-two-councils-slam-government-as-40m-total-cuts-approved-

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5 Mar 2019

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Accountability, Austerity cuts, Local Government Finance

“Great British sell-off: how desperate councils sold £9.1bn of public assets”

” … Far-reaching research by the Bureau for Investigative Journalism and the Huffington Post UK has found that nine years of swingeing central government cuts to local council budgets have resulted in a vast and irreversible sell-off of public assets. Of England’s 354 local authorities, 301 replied to the primary Freedom of Information (FOI) request, which revealed that between 2014 and July 2018, more than 12,000 publicly owned assets have been offloaded by local councils. In total more than £9.1bn was generated.

Some of the assets sold off are grand historic buildings; some are small scraps of land. All are now gone forever, in a one-off fire sale of public assets accumulated over many decades, intended to serve the public good, and now generating profit for their new private owners.

Replies to the Bureau’s second set of FOI requests were even more comprehensive (342 out of 354) – and alarming. These concerned the use of “flexible capital receipts”, and showed that in many cases local councils have begun offloading their assets – playing fields, community centres, libraries, youth clubs, swimming pools – to fund redundancies made necessary by central government cuts.

Until new legislation was introduced in April 2016, councils had to to use any proceeds raised from selling land and buildings they own to buy new assets. David Cameron’s government changed all that by allowing them to invest the proceeds of any assets sold by April 2019 to fund frontline services.

FOI data shows that in the first two years following the change in the law, at least 64 councils – one-fifth of those who responded – used these capital receipts to plug gaping holes in their budgets. Often, this has included redundancy payments.

In some cases, desperation has driven local authorities to offload these public assets at knock-down prices. Northamptonshire – which relied on selling assets to plug huge gaps in its finances – got rid of land or buildings it owned for less than they were worth on 12 separate occasions, potentially missing out on income of £6.3m. Half of these under-value sales were to property developers. …”

https://www.theguardian.com/cities/2019/mar/05/great-british-sell-off-how-desperate-councils-sold-91bn-of-public-assets

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4 Mar 2019

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Accountability, Austerity cuts, Local Government Finance

“Councils using cash from property sales to fund redundancies”

“Councils in England have spent £115m of money raised from property sales on funding redundancies, analysis has revealed.

Since former chancellor George Osborne relaxed rules on councils spending receipts from public assets in 2016, 64 councils in England have spent £381m generated by property sales – a third of which (£115m) was used to make staff redundant, according to the research by the Bureau of Investigative Journalism and Huffpost UK.

Previously, when a local authority sold off an asset, it could only use the money to fund the cost of replacing that asset. However, changes introduced by Osborne allowed councils to spend those receipts on cost-cutting measures.

Freedom of Information requests submitted by the Bureau revealed that councils that made the most of this law change had a redundancy rate 75% higher than councils that did not.

In Bristol, the number of council workers made redundant has jumped ten times since the change, from 39 in 2015-16 to 401 in 2016-17.

Simon Edwards, director of the County Councils Network, said: “In rural England, county authorities face a £3.2bn funding gap by 2020, largely due to costs outside of their control.

“It is therefore inevitable that councils have had to reduce highly-valued services to a minimum, with discretionary services disappearing and new charges introduced for services ranging from black sacks to parts of social care.

Urban councils also used asset receipts to fund redundancies, with five London boroughs doing so. Haringey spent £8m this way and job losses increased 70%, according to the data.

Northamptonshire County Council agreed the sale of its brand new council headquarters in April last year for a sum of £64m. This was the single most valuable asset sold since 2016, the research found.

Andrew Gwynne, Labour’s shadow communities and local government secretary, said: “Austerity has hollowed out the heart of our communities. This report reveals the shocking disposal of our community assets under the Tories.

“Cuts have forced many councils to sell off their parks, community centres and libraries; cut back on staff and the neighbourhood and care services that all of us rely on; and push up council tax – just to keep the lights on.”

https://www.publicfinance.co.uk/news/2019/03/councils-using-cash-property-sales-fund-redundancies

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4 Mar 2019

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Accountability, EDDC, EDDC HQ, Local Government Finance, PegasusLife

EDDC HQ move cost neutral? Don’t make Owl laugh!

“… The new headquarters cost the council £8.7m, while an additional £1.5m was spent on upgrading Exmouth Town Hall – where one third of the council staff are to be based.

The Knowle has been sold to developers Pegasus Life for £7.5m, which has been granted planning permission to convert the building into a 113-apartment [top-end luxury] assisted-living community for older people. …”

https://www.bbc.co.uk/news/live/uk-england-devon-47369240

It has been estimated by a local property developer that the new HQ has a market value of no more than £3.5 million.

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1 Mar 2019

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Accountability, Austerity cuts, East Devon Tories, EDDC, Local Government Finance

PROPERTY SPECULATION SAFEGUARDS REJECTED BY EDDC TORIES

Owl says: The safeguards proposed in the amendment below, which was rejected by the Conservative majority, appear to Owl to be entirely sensible, and a necessary check on an inherently risky strategy. Owl considers that the East Devon Tories is showing a reckless disregard for financial prudence, and for their stewardship of public money – OUR money.

Independent councillors at East Devon District Council tabled a Notice of Motion, to allow a full debate and vote, on EDDC`s highly controversial Commercial Investment Framework (CIF) at the council meeting on 27 February.

The CIF would allow EDDC to borrow £20 million to speculate in the property market. But the EDDC Chief Executive refused to allow the Notice of Motion to appear on the agenda paper for the full council meeting.

The Independents therefore had to resort to Plan B – and move an amendment to the Cabinet minutes.

At the council meeting on 27 February, Cllr Roger Giles (Ottery Town) moved an amendment to EDDC Cabinet minute 160 of 6 February. The amendment (BELOW) was to introduce safeguards to what he described as a high risk strategy; it was seconded by Ben Ingham (Woodbury).

The amendment was to add the following words:

“The Council recognises that property investment is a potentially high risk strategy, and therefore agrees that any such property acquisitions should only be undertaken after stringent financial assessment taking into account the following guidelines:

1. Any property purchases should be made within East Devon, to maximise local expertise in the property market, and to benefit the local economy;

2. A firm of Commercial Chartered Surveyors should be appointed to provide a full Valuation report and Schedule of Condition in respect of each property; a financial assessment should be provided by an appropriate Qualified Firm in respect of existing tenants; the said reports of any property purchase should be submitted to the full council for approval prior to purchase;

3. An annual report detailing purchase costs and all disbursements relating thereto shall be made to the full council”.

At the meeting, Independent Councillor Roger Giles said that the strategy:

* was not in accord with the council`s economic development strategy, because property could be purchased outside of East Devon;

* was high risk, and would massively increase the council`s indebtedness;

* would result in just 4 of the council`s 59 councillors being involved in major decisions;

* did not have public support – there was considerable public unease about the council strategy.

Other Independent councillors expressed concerns about the strategy, and spoke in support of the amendment.

At the conclusion of the debate, the Conservative majority on the council voted down the amendment, and decided to press on without the safeguards proposed.

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16 Feb 2019

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Accountability, Local Government Finance, Post-Brexit Adjustments

“Baffled town halls ordered to plan for Brexit ‘without knowing what it is’ “

“With 43 days left on the clock, local authorities have been told to prepare for March 29.

Government incompetence is causing ‘chaos’ within councils that have been ordered to plan for Brexit, a town hall boss has warned.

Stockport council leader Alex Ganotis said local authorities had been told to prepare for leaving the EU in less than 50 days ‘without telling us what to plan for’.

He was speaking at the latest meeting of the combined authority, at which Manchester council leader Sir Richard Leese said huge anxiety remains among businesses in the region over what happens when Britain leaves.

While Greater Manchester had been doing its best to prepare, he said, ‘it’s not a happy story at the moment by any stretch of the imagination’.

Local leaders were meeting with just 43 days left on the clock before March 29 and no clear plan in Westminster about what will happen.

Coun Ganotis said government had been very clear that councils were expected to plan, however, just not what they were planning for.

“There are six weeks left until we are due to leave the EU and the government clearly has no plan over crucial, crucial areas of the way this country is run and the way this country works,” he said.

“And yet they are being very clear with local authorities that local authorities need to plan for Brexit.

“We need to make sure our council supports our communities after Brexit, but without telling us what to plan for, exactly what resources will be required, and exactly what the impact will be on our areas.

“We as councils have to take our responsibilities to residents seriously – and in a way that this government is not taking its responsibilities towards British citizens seriously, because it’s in hoc to a group of fanatics that do not care about ordinary people and the way they go about their lives.”

Reeling off a list of potential issues faced by councils, he said government had announced a funding package for town halls, but that it was ‘far, far less’ than would be needed.

“So we are going to have to find funding within our own councils that we would have otherwise put to other uses in terms of frontline services to provide for and fund Brexit,” he said.

“But in terms of what exactly we do, we still don’t know.

“Areas around staffing – local authority staffing, staffing of our contracted services, of care workers are a very good example of that.

“Civil resilience, our regulatory responsibilities, especially in term of product regulation, the services we provide to people from EU countries who don’t know where they will stand, the support we provide for people in terms of employment, as well as keeping things going in the event of Brexit.

“We are going to have to plan for all of this as local authorities and it’s causing chaos.

“And I think the government needs to understand the hypocrisy of what they are putting on local authorities.”

Greater Manchester leaders have been receiving regular updates since June 2016 about the potential effects Brexit is having – or will have – on the local economy, including local efforts to support businesses worried about the impact.

The government has refused to share its exact economic impact assessment for the area, however, with councils instead drawing up their own – suggesting more than £8bn could be wiped off the conurbation’s economy in the next 15 years in the event of a no deal.

Manchester council leader Sir Richard Leese, who is in charge of economic issues for the region, said the current picture was bleak.

“It goes without saying that at a time when the performance of the economy is at its lowest point since the recession, there’s an enormous amount of anxiety amongst businesses and still a lot of concern about a lack of preparedness in business even though we are now days rather than months away from March 29,” he said.

Pointing to Greater Manchester’s 60,000 EU citizens, he said the potential effects could be particularly problematic for ‘sensitive’ areas such as the NHS that rely upon them for staffing.

However planes would not be grounded, he said, as Manchester Airport had plans in place for flights to continue even in the event of a no-deal.

But he added: “I’ve come to dread this item, to be honest.

“As someone who’s been in active politics for most of my adult life, I have to confess I’m now completely confused as to how our parliamentary democracy – how representative government works.

“If any of the leaders around this council chamber at the moment, if we were to ignore our councils in the way the PM ignores parliament we wouldn’t last five minutes.

“I tend to wonder what parliament is for, because they keep passing votes and the PM keeps saying ‘I’m right, I’m going to ignore them’.

“But underpinning that is that at the moment, whatever your views on Brexit – it doesn’t matter whether you’re for or against – we are at the moment rushing headlong to at least a short term disaster, which is the risk of a disorderly no deal exit from the EU.”

https://www.manchestereveningnews.co.uk/news/greater-manchester-news/baffled-town-halls-ordered-plan-15838753?fbclid

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14 Feb 2019

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Austerity cuts, Inequality, Local Government Finance, Poverty

“Local Government on life support”

“Almost all councils in England plan to increase council tax from April and three-quarters intend to raise it above 2.75%, research reveals. Most councils have also warned they will still be reducing a range of services, from adult social care to libraries and recycling, while raising charges and fees.

The Local Government Information Unit thinktank says eight years of austerity have cost English councils 40% of their central funding. Last week Somerset and Northamptonshire county councils reversed winter gritting cuts amid outcry when untreated roads caused car accidents, while unrepaired potholes and cuts to libraries have grated with residents.

“Years of chronic underfunding has left local government on life support,” said the chief executive of the thinktank, Dr Jonathan Carr-West. The local government ministry says councils are to receive an extra £1bn in the coming year.”

https://www.theguardian.com/world/2019/feb/14/thursday-briefing-up-goes-council-tax-as-austerity-grinds-on