MORE than 100 council staff have been issued with redundancy notices as Plymouth struggles to cope with the Government’s austerity drive.
The notices were issued as Local Government Minister Brandon Lewis announced an £8.5million, or 3.6per cent, cut in the city’s “spending power” from April 2014.
The cut is worse than the national average of 2.9per cent.
But Plymouth City Council finance supremo Mark Lowry challenged the figures, which he said included elements such as the New Homes Bonus, the incentive payment for building extra housing.
“The real cut is 9.5per cent, which amounts to a £12million fall in our revenue,” he said.
Ministers were “looking after the Tory shires” at the expense of cities like Plymouth.
Alison Seabeck, Labour MP for Plymouth Sutton and Devonport, warned that it was “not acceptable” that the council was having trouble paying for statutory duties as the Government unveiled the latest local authority financial settlement.
Plymouth’s grant looks likely to be scaled back by another 3per cent for 2015/16, or £6.9million.
Cllr Lowry said that although the council was still able to meet its statutory obligations, “if the cuts continue on this scale we will struggle”.
Cllr Lowry said the latest settlement was very close to the 10per cent cut predicted by Plymouth City Council.
As previously reported in The Herald, the council expects to have to save some £65million over the next three financial years.
Cllr Lowry said: “We issued formal notification to commence the redundancy process for more than 100 council posts.”
The council expects to cut about 300 posts in an attempt to balance the books.
In the House of Commons, City MP Alison Seabeck said: “Over the past five years Plymouth City Council has cut its back-room staff, innovated, and, sadly, laid off staff.
“Now it is telling us that it will not have enough money to fulfil its statutory duties over the three-year period, which is not acceptable.
“Will the minister please tell us what the council is supposed to do when it is being encouraged to freeze council tax, which is a wholly regressive measure?”
Local Government Minister Brandon Lewis said: “If the council freezes the tax, which would be good for its residents, it will receive a support grant from the Government.
“If it is looking for ideas in order to do more than it has already done, I am sure that the Local Government Association will be happy to help.”
Whitehall has provided funding to pay for a council tax freeze, but a growing number of authorities have turned down the offer fearing they would have to make unacceptable cuts to services without a bigger rise.
Labour-controlled Plymouth City Council this year hiked the charge by 2per cent, and is predicting a similar rise next year.
Meanwhile Cornwall Council said the 2.7per cent cut in its budget was close to what it had predicted.
Cornwall will lose £13.6million in spending power in 2014 and £5.6million the year after.
Devon County Council will have to make do with spending power reduced by £9million from April, or a 1.6per cent fall. It will actually see a £3million increase the year after, or a 0.5per cent jump.
South Hams will see a drop of 1.2per cent, then 1.9per cent the following year and West Devon down 2per cent and then 3per cent.
West Devon Borough Cllr Philip Sanders said: “Although like all councils we are still receiving a decrease in central government funding, today’s announcement is what we broadly expected.
“There was some good news in that the Government has finally recognised that sparsely populated rural authorities are currently underfunded compared to urban authorities and has added approximately £50,000 to our base grant.
“Although the additional sum that we have been given is very small at least it is an acknowledgement that we are being underfunded. Small though it is, the money is a reward for all the lobbying that has been carried out by ourselves, MPs and an organisation called SPARSE which helps rural councils.
“I view this changing government position as a positive step and I look forward to seeing the gap between rural and urban funding reducing still further in the coming years.”