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Austerity cut-backs warning from council

By Western Morning News  |  Posted: December 22, 2012

Money
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A small Westcountry district council has warned its grant from Government has almost been chopped in half by brutal austerity measures.

Mid Devon District Council, which serves a population of around 77,000 people, is the first district authority in the region to put a figure on Local Government Secretary Eric Pickles' "bargain" spending deal for councils.

Officials reckon it will lose £775,000 of Whitehall aid over the next two years following Wednesday's finance settlement. This is on top of a £1.5 million reduction over the previous two years, equivalent to a 40% cut over the four-year period.

Conservative councillor Neal Davey, cabinet member for finance, said: "Overall this is a very tough two-year financial settlement, but our priority will be to continue to protect frontline services and promote economic regeneration within Mid Devon."

Government grant currently makes up just under half of the council's total income – with the rest coming mostly from council tax – meaning its total budget has been slashed by almost a quarter in total in just four years.

MPs have recently warned ministers of the impact of cuts on small councils as West Somerset District Council, which serves 34,000 people, has sailed close to financial collapse.

On Wednesday, Mr Pickles said on Wednesday an average 1.7% cut to "spending power" represented a "bargain".

While unions warn of libraries and day care centres closing, Mr Pickles says councils can do more to generate income, share services with neighbouring authorities and cut excess spending, such as town hall newspapers and consultants.

The "spending power" measure favoured by the Government bundles together all Whitehall grants, and makes assumptions over council tax, business rates and other revenues authorities can raise.

Councils, though, believe the measure does not reflect the full impact of the cuts – and question how Whitehall officials arrived at a 1.7% cut.

They have already indicated the £80 million of cuts that Devon and Cornwall's four upper-tier councils will have to find over two years has been underestimated.

Cornwall Council, Devon County Council and the rest of Devon's district authorities are still picking over the settlement and have yet to comment in detail.

Torbay Council is in line for £10 million of cuts in 2013-14, it said yesterday. Plymouth City Council said its cut from April appears to be at least 7%.

Councils can only hike council tax above 2% next year if they call a local referendum.

Labour councillor Mark Lowry, Plymouth city cabinet member for finance, said: "Eric Pickles seems determined to bring a return to Dickensian Britain, which is probably why he is behaving like Scrooge in not caring about the impact he is having on the most vulnerable residents.

"The gloom from the spending announcement makes it more likely the council will be forced to increase the council tax by 2% next year."

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  • roverdale  |  December 24 2012, 11:55AM

    Mid Devon District Council is to small to go it alone, it should be linked up with another district. That's the way to cut costs.

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