True scale of settlement cuts emerges

Copied from Local Government Chronicle online
20 December, 2012 | By Dan Drillsma-Milgrom

Councils face much higher funding cuts than those announced by communities secretary Eric Pickles, fresh analysis of the local government settlement has revealed.

An LGA briefing on the settlement said council funding would be cut by almost 4% next year and 9% the year after.

The cuts in core government funding for councils stands in contrast to communities secretary Eric Pickles’ claims that local authorities’ ‘spending power’ would reduce by only 1.7% next year.

LGA chairman Sir Merrick Cockell (Con) said the figures showed that local government continued “to bear the brunt of public spending cuts in the spending review period”.

The LGA’s calculations showed that councils’ start-up funding allocation in the new retained business rate funding system would decrease on a like-for-like basis of 3.9% in 2013-14. The following year, while councils’ local share of retained business rates is projected to grow by 3.1%, the revenue support grant which still makes up the bulk of councils’ funding is forecast to fall by 17%. The net effect is for a projected 8.6% decrease in funding.

Sir Merrick claimed that local government’s cuts in the spending review period would now exceed 33%, in comparison to the 28% originally announced.

The briefing also confirmed a number of details from the settlement announcement:

Of the £661m being paid to councils through the New Homes Bonus, £411m would be top-sliced from councils’ formula funding in 2013-14.
The amount held back to fund the safety net has been reduced from £245m to £25m
Twenty areas have been designated as pools for the purposes of top-ups, tariffs and safety net payments. These are: Berkshire; Greater Birmingham & Solihull; Buckinghamshire; Coventry & Warwickshire; Cambridgeshire; Devon; Gloucestershire; Leeds City Region; Leicester & Leicestershire; Lincolnshire; Greater Manchester; Norfolk CC and Broadland; Northamptonshire; Nottinghamshire; Oxfordshire; Somerset; Staffordshire & Stoke-on-Trent; Suffolk; Surrey; Worcestershire

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Graham669 | 20-Dec-2012 2:40 pm
Pickled is doing his usual act of stupidity, the secondary effects of the crazy cuts in LA funding will last far longer than he is in office.
This charlatan will unfortunately leave a legacy of social damage that will take decades to heal.

patrick newman | 20-Dec-2012 4:04 pm
As predicted we only find out the truth well after Pickles has spoken but I doubt if cares too much about that. A further round of redundancies is inevitable thus putting more pressure on state finances through increased benefits and reduced tax yield. There must be many councillors who feel unhappy about being Pickles’ neighbourhood axemen.

Councillors barred from pension scheme

This should please many of those who see elected members as surplus to requirements and wish to consign them to local government history as a failed experiment in democracy.

Copied from Local Government Chronicle online
19 December, 2012 | By Dan Drillsma-Milgrom

Councillors are to be barred from being members of the Local Government Pension Scheme (LGPS), local government minister Brandon Lewis has announced.

In a written ministerial statement made on Wednesday morning, Mr Lewis said that councillors would not be able to join the scheme after April 2014 and that councillors who are already members would not be able to accrue any further benefits after that date.

Mr Lewis said the government “did not believe that taxpayer-funded pensions are justified”.

“Councillors are volunteers undertaking public service; they are not and should be employees of the council dependent on the municipal payroll. They are not professional, full-time politicians, nor should they be encouraged to become so.”

However, the statement revealed that elected mayors would not be barred from LGPS membership in recognition of the “greater expectation than an elected mayor is a full-time position”. The government will consult on allowing elected mayors to remain in the scheme “as a voluntary option (but not as an expectation)”.

The salaries of Police and Crime Commissioners, the Mayor of London and London Assembly Members will also remain pensionable.

Mr Lewis admitted that his department did not hold records on councillors’ participation in the scheme. However, he said that “initial rough estimates suggest that this could save £7m a year in taxpayers’ money”. He said there was “absolutely no case” for increasing councillor allowances to compensate for the move.

Councillors have been able to join the LGPS since 2003. The Councillors’ Commission report found that by 2004, 912 councillors had joined the scheme. However, research from the Taxpayers’ Alliance found that number had grown to 3,527 in 2007-08 and 4,548 by 2010-11.

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Roger | 19-Dec-2012 12:55 pm
Another good example of different politicians in the same government department looking in completely different directions on an issue. One the one hand we have this statement, that members are volunteers and not to be considered or encouraged to be full time ’employees’ of the council. Then you have Eric Pickles telling elected members that they can fill the gap and replace officers culled under hiis ‘modest’ local government funding cuts. Do these people actually talk to each other?
If these sort of petty almost spiteful statements don’t deter the younger members of our communities from becoming councillors in the future, then I’m sure DCLG have more up their sleeves to do the job!

Do we stay calm and carry on? No…

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13 December 2012 | By Michael Bichard

The Public Services Hub at the RSA together with the Social Market Foundation (SMF) recently produced an important report entitled ‘Fiscal Fallout’, which is worth a read…but is not for the fainthearted.

It spells out the scale of the continuing financial crisis and makes a strong case for much greater coherence between the national strategies for fiscal sustainability,sustainable growth and public service reform.

The report – co-authored by Ben Lucas and Ian Mulheirn – explains how growth has been weaker than expected, social security expenditure continues to grow and government borrowing is, this year, running at 10% above forecast.

As a result, using HM Treasury’s method for estimating the structural part of the deficit, the SMF suggests that to remain on it’s planned fiscal path the government will need to make a further £22bn of cuts or tax rises by 2017/18 on top of the already planned £26bn of cuts announced in the last Autumn Statement.

Looked at in Departmental terms, if the NHS, Education and International Development remain ring-fenced then the consequences for other departments, including DCLG will be brutal.

Stay calm and carry on?
In the face of such forecasts the future is alarming if all we do is ’stay calm and carry on’.

As I have argued before,and the report reinforces,we have to be more radical than that not least because of other unavoidable pressures. After all,the LSE predict that an additional 6% of GDP will need to be spent on public services by 2020 to meet the social costs of an ageing society and the LGA estimate that the cost of meeting increased demand for statutory services will leave a funding gap of £16.5bn by the end of the decade.

What we need is for the next spending review to point the way towards a new Public Service model with a very different starting point. As the RSA report concludes, we need to redefine the relationship between citizens and services because value in public services is not transactional; it is about enabling people to achieve their goals to be capable, autonomous and socially responsible’In the language of the RSA you need to build social productivity by shifting resources away from traditional departmental priorities and silos towards the the things that citizens need to build strong and capable communities.

We have to move away from social protection to social productivity and we need to move on from a philosophy primarily concerned with response to one which gives much greater emphasis to prevention,early intervention and demand management; and we should know that this approach works because it is already happening in some local authority areas.

Councils like Oldham and Sunderland have begun to develop innovative approaches based on decentralising services,developing local commissioning capacity and taking a community leadership role in brokering and catalysing neighbourhood behaviour change thereby reducing demand for public/state services.

The question for me is whether the centre understands the importance of these radical initiatives and is capable of redesigning a public service model that has been shown to be expensively flawed.

Lord Bichard, senior fellow, Institute for Government

Eric Pickles: a response

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13 December, 2012 | By Dan Drillsma-Milgrom

Those that listened to the Department for Communities & Local Government’s ministerial team give evidence to its equivalent select committee on Wednesday will have heard Eric Pickles make the bizarre claim that quoting from LGC is like “quoting from a Labour party press release”.

The thoughtlessness of this comment can be demonstrated by simply pointing out that just a month ago, Mr Pickles’ own department was happy to quote LGC’s research into council chief executives’ salary levels in a press release about ending chiefs’ “golden goodbyes”. We don’t necessarily agree with the policy but were happy for Mr Pickles’ department to quote from our research, just as we were happy for David Cameron to do so last year.

Still, mud can stick. So for the record, let me restate Local Government Chronicle’s editorial position.

LGC has absolutely no affiliation to or bias towards any political party. Our editorial position is that we act as a friend to the sector – albeit a critical one where necessary. Our objective is to report on policy issues that affect all councils and, where we can, to put forward the case for local government to be part of the solution to some of the social and economic issues that the country faces. To do this, our reporters speak regularly with senior council officers, civil servants and local and national politicians of all parties.

Mr Pickles’ comment on Wednesday came in response to a question about DCLG’s permanent secretary Sir Bob Kerslake being branded a ‘doom denier’ for dismissing the LGA’s predictions of a looming financial crisis. The actual “doom denier” label was coined by the organisation’s Liberal Democrat group while the original ‘graph of doom’ was created by Conservative-run Barnet LBC. It was the LGA’s Conservative chairman Sir Merrick Cockell who said that while “denying” the growing funding gap that local government is facing “may be convenient for some”, it is “not accurate to suggest the view is overly pessimistic”. It is hard to see how reporting on this issue is representing the Labour party’s viewpoint.

To be honest, with Labour having not released much policy on local government, LGC has not devoted an awful lot of coverage to the party recently. One exception was when we exclusively revealed Labour councillors’ anger at their party’s leadership for forcing peers to vote against plans to give councils greater flexibility to deal with council tax benefit reforms – again, hardly the stuff of central office press releases.

LGC has, however, been critical of the lack of support Mr Pickles and his department have shown for local government. Our lead story and leader article in this week’s issue give an example of why this is.

But at the select committee hearing, Mr Pickles himself gave an interesting insight into why there’s such anger within the sector towards him. The communities secretary was asked by MPs whether Greg Clark’s decentralisation report, published last week, had implicitly criticised his department by saying “it should come to a more settled but ambitious view of the role of local government and communities and neighbourhoods”. He replied that he had inherited a department that was “the voice of local government within government” and that had changed to being “the voice of the council tax payer, of the citizen inside local government services”.

It is quite right for Mr Pickles to act as the voice of the council tax payer – Mr Pickles’ predecessors would surely claim to have done likewise – but many officers and local politicians now feel that councils do not have an advocate within Whitehall. Mr Pickles’ comment seems to confirm that this is the case. Or at the very least, if there is one, it’s not him.

Incidentally, it’s worth pointing out that reports in the press this week that Ed Miliband and Ed Balls are planning to oppose George Osborne’s plans to raise benefits and tax credits at a below-inflation 1% have important implications for local government.

If spending on the NHS, schools and overseas aid is to be protected whilst overall spending is reduced, then a decision to also protect welfare expenditure implies extra cuts for other spending departments, local government included.

Councils will be unlikely to sit higher up the pecking order under a Labour administration.

Pickles attacks LGA’s crisis forecast

Copied from Local Government Chronicle online
13 December, 2012 | By Kaye Wiggins

A response to the unwarranted attack on LGC’s editorial impartiality will be posted shortly

Communities secretary Eric Pickles has attacked the LGA’s prediction of a crisis in local government services, accusing the group of being “seduced by statistics” and arguing that cuts to councils’ funding have been “modest”.

Mr Pickles (left) told the communities and local government select committee that it was “utterly ludicrous” for the LGA to predict that councils could struggle in future to fund anything other than social care and waste services.

He made his comments after committee chair Clive Betts (Lab) quoted reports in LGC that Department for Communities & Local Government permanent secretary Sir Bob Kerslake had been branded a “doom denier” for rejecting the LGA’s gloomy projections.

“I think it’s utterly ludicrous”, he said. “The LGA have allowed themselves to be seduced by statistics and have got themselves into a Malthusian fantasy” – a reference to the eighteenth-century scholar Thomas Malthus who argued that population growth would outstrip food supply, leading to starvation.

Mr Pickles said: “I do not believe the modest change we’ve seen means the end of civilisation as we know it. Local government will continue and find more efficient ways of doing things. If they find it difficult to do…new people will come.”

Mr Pickles also told the committee that quoting from LGC was “like quoting from a Labour Party press release”. The phrase “doom denier” was in fact coined by the LGA’s Liberal Democrat group.

To read acting editor Dan Drillsma-Milgrom’s response to Eric Pickles’ comments, click here

Asked whether Greg Clark’s decentralisation report, published last week, had implicity criticised his department by saying “it should come to a more settled but ambitious view of the role of local government and communities and neighbourhoods, he said that he had inherited a department that was “the voice of local government within government” and that had changed to being “the voice of the council tax payer, of the citizen inside local government services”.

Council tax

Mr Pickles also used the hearing to insist that freezing council tax levels was “entirely voluntary”. This week, LGC reported that civil servants in Mr Pickles’ department had discussed delaying the local government finance settlement until after Christmas in order to impose a blanket council tax freeze. He added that the settlement would be announced next week.

Sacking chiefs

Mr Pickles was also asked by MPs about his plans to make it easier to dismiss council chief executives – and said the request to do this came from local government itself.

Asked whether he was worried about chiefs being unprotected against politically motivated dismissals, he said: “I just don’t think local government is like that any more.

“You’ve got to rely on the integrity of politicians to make sure the threat of removals is not used lightly”, he said, adding that the removal of a chief usually meant that the council “goes into virtual stasis for six months”.

He praised David White, chief executive of Norfolk CC, who had stood down with a payoff of “just £35,000”. This was a lot of money, he said, but a long way from the settlements of more than £100,000 that some chief executives had received.

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philcoppard | 13-Dec-2012 4:28 pm
Eric Pickles has previous form with these ludicrous statements.
As previously identified, the man is a clown.

West Somerset to become ‘virtual authority’

And so it begins. For those who think elected members should be culled, here’s the answer, just get rid of the council and give it to the private sector!

Copied from Local Government Chronicle online
6 December, 2012 | By Ruth Keeling

Minsters have persuaded a council branded ‘unviable’ not to pursue a merger with neighbours and instead becoming a “virtual authority” commissioning services from other providers.

West Somerset DC has rejected LGA advice to commence a boundary review following a meeting with local government minister Brandon Lewis during which he made it clear he believed the authority should continue as a sovereign democratic body.

According to West Somerset’s account of a meeting held last month between Mr Lewis and the council’s chief executive and leader, the ministers endorsed the LGA view that the authority was “not sustainable” in its current structure but insisted there was “no need to engage with the Boundary Commission on the subject of a merger” as advised by the LGA.

He also warned the authority that it should not expect the local government settlement due later this month to solve the council’s problems, the report states.

Mr Lewis was of the “firm belief that the council should be retained as a democratically elected and accountable unit of local government representing the people of West Somerset”, according to West Somerset papers published on Wednesday, a stance in direct contrast to an LGA report published last month which stated “the council is not viable as a unit of local democracy and governance over the long term”.

‘Virtual authority’

Following Mr Lewis’ advice that West Somerset work closely with neighbours and become a commissioning council, a business case is to be drawn up with neighbours to investigate how the council can commission from “other service providers whom would predominantly, but not exclusively, be neighbouring councils”.

Under the fledgling plan the council of 82 full time employees would reduce its workforce further and “only retain a small nucleus staff to manage the commissioning arrangements once in place”.

The report to full council, due to be debated next week, states the council’s existing lack of capacity will “impact on the council’s ability to move forward with the necessary urgency” and, as a result, £25,000 has been set outside to employ outside expertise.

In setting out the objections to other options, the report notes that a boundary review would be unlikely to be completed before elections in May 2015, as recommended by the LGA, and argues that a large council tax increase was a short term solution which would be unlikely to win the support of the electorate in a referendum.

A business case for the move to commissioning is to be drawn up “as soon as possible” with the council’s own risk assessment making it clear that, if no action is taken, it is “possible” the council will be unable to balance next year’s budget. It also states it is “likely” ministers will identify West Somerset “as a failing authority and put intervention measures in place”.

Shared management arrangements with Taunton Deane BC and Sedgemoor DC were investigated in 2010, after an earlier report also questioned the viability of the council, but the proposals were abandoned in early 2011 partly because the cost savings were minimal. Other shared service ventures were pursued, however.

Ministerial advice

The West Somerset papers, which set out in detail the pros and cons of the options available ahead of a full council meeting to be held next week, also reveal that Mr Lewis’ recent advice contradicted advice given by his predecessor Bob Neill.

At a December 2011 meeting with Bob Neill “the advice given at the time was to seek local support for a council tax increase that was above the national threshold or seek a merger with a neighbouring council through the Boundary Commission”, according to West Somerset.

However, a Department for Communities & Local Government spokesman disputed this suggestion.

“It is wrong to suggest government has changed its views. In December the local government minister [Bob Neill] made no proposals for boundary review, he raised concerns over possible council tax increase specifically that government could not countenance large increases and said it would be supportive of a shared service approach,” the spokesman said.

“The important thing is that West Somerset is looking to ensure that they have a sustainable approach to the financing of their council and should be actively looking at the scope for joint working to make sensible savings.”

The report also said the view of the LGA had “seemingly changed” since its report said a boundary review would be necessary in the long term. A spokesman for the LGA said it stood by the advice given in October based on information available at the time, but that it supported West Somerset in pursuing alternative options following discussions with other parties.

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Roger | 8-Dec-2012 12:36 pm
This council is being led down the garden path by this minister, for reasons I cannot currently fathom.
It may be that he is following the Pickles plan of decide and conquer when it comes to this government’s wish to see local government reduced to no more than a parochial puppet of central government. This would also align with this government’s obsession with everything private. Conning this council into becoming no more than a front for a totally outsourced solution, that can then be touted around as the way forward for all councils, is also a possible goal.
Can somebody please explain to me what the role of the elected member is in an organisation where everything is totally contracted out and therefore offers little or no flexibility without throwing more money at the issue? Every complaint would elicit the same answer, sorry, it’s in the contract. I suppose they would only ever need to turn up for the quarterly performance reviews, followed by the annual contract review.

Peers champion ‘graph of doom’ prediction in Lords debate

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3 December, 2012 | By Keith Cooper

The government’s effort to discredit local government predictions of a looming social care funding crisis have failed to convince Labour and Liberal Democrat members of the House of Lords.

Peers debating the future of social care in the upper chamber this week pointed repeatedly to the now-famous “Barnet Graph of Doom” which shows that council budgets could soon be eaten up entirely by an inexorable increase in adult social care.

Senior civil servants dispatched to the Communities and Local Government had this month dismissed this prediction as overly ‘apocalyptic’ and too ‘pessimistic’.

But Baroness Barker (Lib Dem) told peers it was “understandable that people talk in apocalyptic terms about social care”.

“The Barnet graph of doom says it all. I have to say that the LGA laid it on by doing exactly what I would have done in the circumstances, which is to pick the very worst case.”

Lord Lipsey (Lab) also pointed to the north London borough’s graphic portrayal of the alleged impending social care crisis. “[The Barnet Graph of Doom] shows what the council expects to spend on services and, on another line, what it expects to be allowed to spend in total.

“By 2030, spending on social services alone, the bulk of that on old people, exceeds the total budget,” he added. “Either no bins will be emptied in Barnet…there will be no libraries or parks- no town hall even- or there will be further big cuts for old people.”

Lord Warner (Lab), a member of the Dilnot commission, agreed with Lord Lipsey’s characterisation of social care funding. “This will mean that big cities in particular lose their civic services around arts, leisure, and other things which make for a civilised society as their authorities concentrate on social care and child protection.”

Earle Howe (Con), parlimentary under-secretary of state Department of Health, challenged the “story of cuts” portrayed by his fellow peers.

“We remain firmly of the view that the funding we have provided is enough to allow authorities to maintain access to services and to provide good-quality care. Independent research from the King’s Fund corroborates this.”

“This is not the story of cuts as some critics have made out, and there is only limited evidence of the impact on services or on users.”

Baroness Pitkeathley (Lab) and vice president of Carers UK, who opened the debat sais she found it hard to recognise “the picture of local services” painted by Lord Howe.

Parish councils ‘confused’ by government stance on benefit deals

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4 December, 2012 | By Ruth Keeling

District and parish councils have been left disappointed by the government’s decision to make every district negotiate council tax benefit deals with their parishes.

The move goes against the majority of submissions to a government consultation on the funding formula. Ninety-four per cent of respondents backed the creation of an unadjusted tax base which would avoid the need for detailed calculations for every town and parish authority.

Sandra Cowley, head of finance at Stroud DC and council tax lead for the Society of District Council Treasurers, described the decision as “astounding”; Michael Chater OBE, chairman of the National Association of Local Councils, expressed “strong disappointment”.

The government’s consultation response said it had returned to its original proposal because of concerns about the financial burden on districts should they be left covering parish shares of any mismatch between council tax benefit funding and provision.

The government’s apparent disregard for parish councils’ viewpoint comes after communities secretary Eric Pickles described ast month described them as “localism’s magic wand”.

Mr Chater said billing authorities had “a mixed track record of passing down finance to grassroots councils”. The decision to revert to the government’s original proposal to leave the decision to negotiation between billing and local councils would “put a strain on the delivery of localism and potentially weaken the trust local councils have in government”.

“The real risk for some local councils, is that the billing authority pays over no grant and the council tax base is reduced so resulting in an increase in the council tax rate charged for the local council without there being any change in the basic precept,” he added.

Ms Cowley said colleagues were “confused” by the government’s approach.

“I find it astounding after they have gone to all the trouble of running the consultation,” she said. Responses to the government’s consultation showed that 94% thought the unadjusted tax base was the right approach, including 77% of district councils who expressed concern about the complexities of calculating grant shares for a large number of parishes. “With the majority saying this is an issue they have chosen to go with the minority,” Ms Cowley added.

One district treasurer who did not want to be named said: “This is bad news our town and parish councils set their precepts mainly in December and they thought this issue had been resolved. How we liaise with more than 100 parishes at this time of year will be a new challenge.”

The Department for Communities & Local Government’s consultation response said: “16 respondents disagreed with the proposals with billing authorities making up the majority of those disagreeing. The general view was that the proposals would unfairly protect parish councils from the impact of localising council tax support and would put a financial pressure on the billing authority. Some billing authorities suggested this potential financial pressure would be higher where the parish has a precept larger than that of the district council.”

The response also said that taking action on the “basis of an assumption that billing authorities will not pass down funding…is contrary to the spirit of localism” and, as a result, “the government considers that greater weight should be given to the potential for the proposal set out in the council tax base consultation to increase the financial burden on billing authorities”.