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The truths they don't want you to read....

Tuesday, September 20, 2011

Council budget cuts

The prelude to a very major cut in Council budgets is being characterised with plenty of advance warning and unsubtle Government direction as to where the cuts must fall.  Or more accurately, where expenditure is to be redirected to.

I've done some work on the Comhairle budget, and I estimate that to save the forecast 10% over three years, the Council will have to lose 300-500 jobs and the associated services.

The signs are all there.  Colleges are being forcibly merged.  Police forces are being merged.  Councils are being encouraged to share services.  That 'encouragement' will become a financial compulsion when the full impact of the cuts is known.

Due to the effect of the floor mechanism, I think the real cuts being faced by the Comhairle will be nearer 15% than 10%, and this will be the worst financial settlement in Scotland.  Again.  Again.

Then there is the instruction to increase capital expenditure, by redirecting resources.  In blunt terms that means lose admin staff and employ construction workers, so my estimate of staff losses is at best a net outcome. 

Whilst it will be good to bolster the private sector, I have serious reservations about the view that capital expenditure in some way creates more jobs than revenue expenditure.  Taking £1m from revenue will mean job losses; adding it to capital will not add the same number of jobs.  In simple terms, the lorry and the concrete has to be paid for before you can start thinking about jobs.

Whilst some may argue that it will create jobs 'overall', in the Western Isles we are likely to see local Council jobs replaced by steel rod manufacture and lorry sales on the mainland.

But it is the speed of enforced change that is going to be the problem.  You cannot sensibly rebalance a Council from one direction to another in the six months there are to set a budget.  Just think of how long the 'consultations' on redeployment will take; and how many of the 'never again' Early Retirement packages there are going to be.

The sitting Councillors are going to be on a hiding to nothing - they have to make huge cuts in February next year and seek re-election (or head for the hills) two months later. 

And who is going to get the blame - the Council, the Scottish Government or Westminster?  The answer: it's the other guys fault.  Which might be fair comment, but not a comment the public are going to appreciate when combining services means loss of jobs at the College, the Council or the Health Board when "combining services" becomes "centralising services".

As for the Scottish Government's aspiration that Councils use Prudential (sic) Borrowing to fund Capital....  That's nothing more than taking out HP, which simply means smaller cuts, but for much longer.  And wasn't the Scottish Futures Trust going to provide cheaper loans for the public sector, instead of mutating into a behemoth dishing out big contracts to big contractors?

The public sector in all it's guises is in for a very rough ride over the coming years....


Anonymous said...

Every word of that post is true. And the problem has been exacerbated by the funding issues being put off, in different ways, until now.

It doesn't help that many residents of the Outer Hebrides are, there's no other way of putting this, in denial. I've spoken to two, intelligent, balanced, residents in the last day, and we talked about the Comhairle and council services.

One said that, yes, the next year would be difficult, but we'd get through it - meaning things will be the same, sort of, in a year or so.

The other said that funding would be tighter, but as he was involved in providing an essential service, he should be okay.

They're both wrong. Things won't be the same again. Even when debt and obligations are paid off, unless there's a huge pot of gold (literally) found on Comhairle owned land, funding levels will never be as they were. IT IS OVER.

And there's no such thing as an "essential service", or "ringfenced funding" any more. Care services? All but the core, legally-necessary education services? Subsidies for e.g. bus fares? Infrastructure upgrades? Infrastructure maintenance? Bin collection from your doors?

At the end of 2012, residents will look back to here, the autumn of 2011, with fond nostalgic memories of the services the Comhairle was able to provide then.

Anonymous said...

...and it's going to get far worse. How many years will we be paying for the schools project?

Anonymous said...

There goes any more Comhairle funding for broadband (essential, but here a funding black hole), subsidised fares of all kinds, the arts, gaelic, festival support, extra curricular school learning or event support, specialised health services not paid for by the core NHS budget.

Even then, that's just a fraction of what they'll need to cut.

2020 - you'll only be able to comfortably live in the Outer Hebrides if you're rich, retired, and with a private medical insurance plan.

Anonymous said...

1:49 Yup, too right. Back of the envelope calculations, we reckon the true cuts, after what the Comhairle is legally obliged to pay out, is nearer 30 to 35 percent.

Reckoning in 2013, the Comhairle will have to go to the Scottish government for a bailout.

Anonymous said...

Has anyone seen page 2 of this weeks gazettee. Operational diversity officer, paths to health co-ordinator, choose life co-ordinator. Are all these positions full time? What do they do? Could their roles be combined?
I dont know the answer to this but surely that is the questions that need to be asked in these organisations.