Local government: confusion over cuts

by Richard North

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Councils in Britain are responsible for £114 billion of taxpayers’ money – more than double the defence budget – says the Daily Express, then going on to complain about “waste” and “perks” amounting perhaps to several hundred million, as recorded by a Channel 4 Dispatches programme.

This is all very well and good but, if local authority spending was as low as a mere £114 billion, I wouldn’t begrudge them a few hundred million bunce. As it happens, the latest figures (2011-12) give us an annual expenditure of nearly £162 billion, close to four times the defence budget and nearly £50 billion higher than the Express figure.
To our surprise, though, that figure of near £162 billion actually represents a cut from £172 billion in 2010-11 and £168 billion in 2009-10. Pathetic though the cut is, representing about six percent on a historic peak, we have local authorities whinging about the scale of the cuts, claiming they have taken a 33 percent cut in central government funding since 2010.

The low-circulation Observer then translates this 33 percent cut in government funding into a generic cut, giving the casual reader that there have been swingeing double-figure cuts instead of a paltry six percent in overall spending.

What we are not told either is that the cuts represent only a relatively modest clawback from a situation where the total government grant of nearly £24 billion in 1997-98 more than doubled to reach just short of £58 billion in 2010, the last year of the Labour administration. .

But, what has not been properly explored is the way that, as central government has reined back its grants, and imposed limits on Council Tax, local authorities have upped their charges for a wide range of services, and developed new revenue generation schemes of dubious legality. Thus, by 2009-10 we saw that “sales, fees and charges” plus “other income” almost matched Council Tax, a situation that has continued ever since.

Yet, while even the Guardian is beginning to realise that there is something amiss, with local authorities using traffic fines as a means of revenue-raising, the media have not joined the dots. Council are making up for the drop in government grants and a freeze on Council Tax by upping their revenue-generation activities.

Thus, while we get the likes of Littlejohn huffing and puffing about “waste and perks” – and rightly so – no one seems to be looking past this and pointing out that revenue-generation has become a vast new industry, gouging billions from the pockets of the public.

I suspect that one of the reasons for this is the delay in producing statistics, with the latest volume only published a few days ago, covering only the period until April 2012 – more than a year ago.

But even this tells you that local government accounts for 23 percent of “total managed expenditure”, making councils responsible for nearly a quarter of all public spending. This is serious billions and, after deducting the “non-grant income”, it amounts to a £135 billion cost to local and central government taxpayers, or £2,544 per head in 2011-12.

Not anywhere though, will you get serious reporting or even any evidence that the national media begins to understand what is going on in local government. All it can manage is the occasional cheap shot round the fringes, in this case picking up on £262 millions-worth of expenditure over six years – less than £50 million a year for an operation which spends nearly £500 million a day.

Scrutiny at all levels is needed but here we have the media chasing the trivia and missing the big picture.


5 responses to “Local government: confusion over cuts

  1. Nick diPerna

    Leicester. Some of the most deprived wards in the country, the forth lowest disposable incomes, one of the highest numbers of council staff earning more than 50k, £7.45 minimum wage + perks for all council staff (£6.19 for the rest of us), cuts to care, rent rises, council tax rises, people on low income and JSA now expected to pay a significant chunk of their council tax bill and other cons.

    £1m in bus lane fines alone. Don’t know the total cost of parking permits and parking fines etc…

    They need us more than we need them.

  2. £7.45?
    The War Secretariat wil note the names of all “Leicester Council” “Employees”. They – or their families in perpetuity if they themselves have died in the meantime – shall be sent invoices. For the lot, including compound interest.

    Thieving bastards.
    I mean to say…fuck a brick! How is it they got to get away with such a scam?

  3. And…if the money “isn’t forthcoming” (which means all of it at once) from the invoiced bastards, the War Secretariat will hire “tactically-driven property-rendition-enforcement specialists.” That is to say: looters, as these people could perhaps be described. (As the man said about sons-of-bitches, “they may be looters, but they are OUR looters”….)

    I’m beginning to think that GramscoFabiaNazis really do not understand yet, how viscerally-angry many people are, at their existence and what they do. Perhaps they do, and are saving up all their guns and armed-police for a reckoning: but I do not yet think so.

  4. Nick diPerna

    £7.45 is a lot when the rest of us are expected to work in temporary jobs for as little as £6.19. They get sick pay, pension, perks and a job for life.

    £6.19 is becoming a kind of standard wage in Leicester – and you have to really work hard for it. Nice of them to look after their own people with our taxes.


  5. Nick is right. Invoices will be sent. The “damages” will be enormous.