An open letter to Eric Pickles MP, Secretary of State for Communities and Local Government, on the local government cuts from the leaders of English core cities
As leaders of English core cities we are writing to request that you meet with us urgently to discuss the very real difficulties for local public services that are now being created by cuts in central government funding. These now amount to a looming financial crisis in the nation's largest cities.
To be clear from the outset, none of us is under any illusion about the need for spending reductions and the potential for efficiency savings. But the cuts we are now being asked to make in the years ahead will go far beyond the level at which we can protect vital local services. Many non statutory services that improve the quality of life and provide real economic value are already at risk of disappearing in the next two years as we try to prioritise statutory services for the most vulnerable.
Each of our councils has made significant cuts in spending in the last two years and been diligent and innovative in finding new ways of working:
- In Birmingham, savings of £275m have already been made, including a 25% reduction in staffing accompanied by a radical business transformation programme
- Newcastle has saved £100m in the last three years through a mix of service reductions but where possible innovation and efficiency
- Nottingham has made £92m of savings in the last three years and been named Overall Council of the Year for service delivery by the Association of Public Service Excellence
- Liverpool has taken £143m out of its budget since 2011 and the Mayor has worked constructively across parties to identify savings
- Manchester has made £170m of savings since 2011-12 (25% of budget) and lost 2,025 FTE staff
- Sheffield has taken £141m out of its budget over the last two years whilst continuing to work positively with partners across the city
- Leeds has made £145m of cuts in the last two years and reduced head count by 1800 posts.
The reductions in grant have been unfairly distributed from the start, with the most deprived parts of the country facing the largest cuts, as has already been amply demonstrated. In Wokingham they faced a very manageable 0.6% cut in 2011-12. In Windsor and Maidenhead the figure was 1.1%, whilst in most of the large cities and the most deprived London boroughs it was over 8%. Research by Newcastle City Council showed that the cities and some London boroughs have seen total cuts almost ten times those of rural authorities in the south of England. The percentage cut for some of the most deprived areas is double the average across the country. It has become clear that amongst the worst hit areas are the core cities and our city regions, where we are facing some of the most intense pressures on services and where the sheer scale of the cuts will be most apparent.
The cuts have also been unfairly distributed across Whitehall and between local and central government, with no other department facing anything like the level of reduction that local government as a whole and the big cities in particular are having to deal with. On top of that there have been a number of last minute changes from different departments that add to the problems we face in 2013-14. The Chancellor's announcement this month of a further 2% cut in 2014-15 and the likelihood of further huge reductions in 2015-17 may be the straw that breaks the camel's back.
Combined with unprecedented spending pressures, particularly in the social care services, the cuts we now anticipate will leave us unable to provide anything like the range or quality of public services we believe our citizens have a right to expect. The “Graph of Doom” can be replicated in each of our cities and shows that - if current plans are not changed – there will be no money for anything but social care and refuse collection later in this decade. Some also face major commitments for Waste Disposal PFI schemes and investment in transport infrastructure e.g. Greater Manchester Transport Fund. We can debate whether this position will ever actually be reached, and of course it would not have to be reached for many services to become unviable, but the data should make us all appreciate the need to work together to avert such a crisis.
We are now planning for the following cuts and spending pressures:
- In Birmingham there is an estimated gap of £600m between funding and spending pressures between 2011 and 2017 - a 50% reduction in the controllable budget of £1.2bn – with £110m of cuts in 2013-14
- Liverpool anticipates a further budget gap of £143m from its £480m by 2017 (a 30% reduction on top of a similar reduction in 2011-13), including £32m in 2013-14
- Newcastle is facing an estimated £90m funding gap over the three years to 2016, within a starting budget of £267m (a 34% reduction in that period), with £38m in 2013-14
- Manchester is facing an estimated £80m funding gap over the next 2 years and is set to lose up to 900 further staff. 2015/16 will undoubtedly see further savings once the new CSR numbers become clear
- For Sheffield it is forecast that the potential revenue gap for 2013/14 will be in the region of £50m and cumulative gap by 2017/18 will be about £116m
- Leeds is estimating that they will need to make a further £140m savings by 2017, including £51m in 2013-14.
The Government has rightly recognised that the core cities hold the key to Britain's future economic growth and prosperity. We have worked well together to complete our city deals and now look forward to further radical change in the light of the Heseltine review.
But it makes no sense to invest in economic development and infrastructure whilst at the same time the basic services upon which our cities depend are being systematically under funded. Our cities must be socially sustainable if they are to succeed economically. As the LGA has shown, local government plays a key role in supporting economic growth through its mainstream services and expenditure. Excessive cuts in local services are also counterproductive as they will have consequences in terms of spending pressures on central government departments.
We want to engage in a genuine and honest dialogue about how to restructure the funding system and implement reforms such as community budgets and we would urge you to take that forward without delay. But right now we are seeking an urgent meeting as you announce next year's settlement so that we can find ways of averting the worst of the damage that might otherwise be inflicted next year.
We are sure that you will take these concerns seriously and that the Government will want to avoid the worst consequences of the emerging financial crisis in our cities. So, on behalf of the 3.7m people of our cities, we look forward to your early reply in anticipation of a positive response to this request.
Mayor Joe Anderson, Mayor of Liverpool
Sir Albert Bore, Leader of Birmingham City Council
Cllr Jon Collins, Leader of Nottingham City Council
Cllr Julie Dore, Leader of Sheffield City Council
Cllr Nick Forbes, Leader of Newcastle City Council
Sir Richard Leese, Leader of Manchester City Council
Cllr Keith Wakefield, Leader of Leeds City Council