Austerity cuts are threatening the future of local authority services in the East Midlands, says TUC

date: 14 January 2015
embargo: 00.01hrs Friday 16 January 2015

The future of local authority services in the East Midlands is under threat from a growing financial crisis, with significant cuts already being made to statutory adult care and children’s services, says new analysis published today (Friday) by the TUC and the Centre for Local Economic Strategies (CLES).

The report Austerity Uncovered looks at the impacts of austerity, focusing upon how changes in publicly-funded services affect both people and places across the country, now and in the years to come.

The report, commissioned by the TUC, shows that the government’s austerity plans have considerably increased in scale, with cuts extending well into the next parliament.

The report shows that:

• Changes to the government’s deficit reduction programme since it was first announced in June 2010 mean that we are now only halfway through a nine year programme of austerity, when we should have been three quarters of the way through a six year programme. The government’s original proposals expected austerity to amount to 6.7 per cent of GDP. This is now expected to reach 10.3 per cent, increasing in cash terms from £120 billion to £210 billion.

• By 2015–16 the government will have reduced its funding to local authorities by an estimated 37 per cent. A significant funding gap is emerging within local government as a result of this. The total funding gap is forecast to increase at an average rate of £2.1bn per year until 2019–20 when it will reach £12.4bn.

• This is affecting services across the region, with closures and changes to services affecting local communities. In its case study on Derby City Council, for example, it finds that the authority has to find £81m in savings in the next two years. This is likely to lead to severe cuts in service budgets estimated by the council as up to a third.

• Derby City Council will be increasing thresholds for social care, treating only those older people with serious needs, which means that 2,700 people out of 8,500 receiving council-funded care and support will no longer be eligible.

• The Council’s Supporting People budget was cut by over £6.5m (70 per cent) in 2013/14, affecting a range of vulnerable people particularly the homeless or those at risk of homelessness.

• Derby City Council is likely to be shedding a further 250 jobs in the next three years, in addition to over 1,300 lost to date.

Austerity Uncovered identifies a number of common themes emerging from the nine local case studies. These include: a marked move away from the principle of universal services, with increased use of rationing, targeting and thresholds; significant cutbacks in adult care, particularly home care; and increasing levels of outsourcing of services in some cases. However, the report also shows how some councils, such as Derby City Council, have worked with unions and other local partners to help save services and identify spending priorities.

East Midlands TUC Regional Secretary Lee Barron said: “This report is damning and highlights how this government is shredding local government and public services.

“Unfortunately, the Derby case study is replicated right across the East Midlands. Social care is in crisis and children’s services are under increasing attack. What’s more, those local authorities with the greatest need have been the worst hit.

“We need a new approach to public services and a fairer funding settlement for local government. Derby City Council should be congratulated on working with unions to shape priorities and protect services from the harshest austerity. Other local authorities and politicians should take note.”

The report makes a number of recommendations on how to mitigate the impacts of austerity. These include: a needs-based approach to funding settlements that take into account places with higher levels of social and economic deprivation; further devolution of resources and decision-making powers at the local level; develop a long-term plan for increasing funding for adult social care; a high-level commitment to improve child wellbeing and reduce inequalities; more intelligent commissioning of services that promote the living wage and reduce the use of zero-hours contracts; and more collaboration with public service unions and community groups to encourage local strategies and solutions.

CLES Chief Executive Neil McInroy said: “This report outlines the wide range of impacts on people and communities. The scale and depth of the austerity cuts are harming both our present and future.

“This research tells us that austerity affects all the country, though it bites deeper in poorer areas. There are signs of economic recovery in the East Midlands, but 24 per cent are paid less than the Living Wage. There are also huge pressures on services such as social care.

“We need to get the priorities right and appreciate that austerity means people’s needs are no longer being met like they should be. Without considered decisions based on the needs of people and places, now and into the future, we risk causing irreversible damage.”

NOTES TO EDITORS:
- The East Midlands TUC/CLES report can be found at: http://www.tuc.org.uk/sites/default/files/East%20Midlands%20Final%20Rep…
- The national TUC/CLES report can be found at: http://www.tuc.org.uk/sites/default/files/TUC%20Final%20Report%20Dec%27…
- All TUC press releases can be found at www.tuc.org.uk
- Follow the TUC on Twitter: @tucnews
- CLES are the UK's leading member and research organisation dedicated to economic development, regeneration and local governance www.cles.org.uk

Contacts:
Media enquiries:
Adrian Nolan (CLES)  T: 0161 236 7036   M: 07545 609511   E: adriannolan@cles.org.uk
Rob Johnston TUC Midlands T: 0121 236 4454  M: 07879 497291  E: rjohnston@tuc.org.uk