Councils lose £6.5bn in largest cuts since 1945 with tens of thousands of jobs axed


Tens of thousands of job losses are on the cards at town halls after the Government unveiled what were described as the most savage budget cuts since the end of the Second World War.

Councils will lose up to 17 per cent of their funding from central government grants – which it was claimed could result in more than 70,000 losing their jobs.

A funding shortfall of £6.5billion over the coming year could lead to restrictions on meals on wheels for the elderly, less frequent bin collections and reductions in street lighting.

Bloodbath: Eric Pickles said councils should share resources as he announced budget cuts of 8.9 per cent next year

Bloodbath: Eric Pickles said councils should share resources as he announced budget cuts of 8.9 per cent next year

And there are fears that parking charges and business rates could soar in future years as councils try to balance the books.

But ministers said talk of tens of thousands of job losses was ‘scaremongering’.

Announcing the funding cuts, Communities Secretary Eric Pickles said: ‘Government has been living a credit card lifestyle at taxpayers’ expense, and now it’s time to pay off some of those bills.

‘Taxpayers are no longer prepared to write a blank cheque for the public sector.’

Tony Travers, a local government expert at the London School of Economics, said the cuts would be the worst for local councils since 1945.

‘There’s been nothing like this in modern times,’ he said. ‘If you look at, for example, Denis Healey’s efforts in the late 1970s to cut public spending, it had a one or two-year impact on public expenditure but nothing like this.’

Essential services: Street cleaning, leisure centres and community safety programmes are expected to take a hit in the savage cuts

Essential services: Street cleaning, leisure centres and community safety programmes are expected to take a hit in the savage cuts


Mr Pickles said that next year, the average council’s spending power will be reduced by 4.4 per cent, with a highest fall of 8.9 per cent.

But this is only if receipts from council tax and NHS support for social care are taken into account as well as Whitehall grants.

A closer look at the figures shows that Whitehall grants will fall by much more – on average by 10 per cent, with a 17 per cent fall for the worst-hit authority.

Local authorities are unlikely to be able to meet the shortfall by putting up council tax, because ministers have said this will only be allowed after local referendums, something that is unlikely to get past the public. But a source close to Mr Pickles said: ‘Councils are sitting on £10billion of reserves. There is no reason for huge job losses.

‘The figures that are being bandied around are just scaremongering. Councils could cut chief executive pay, share services and get rid of non-jobs.’

CIPFA, which represents public sector accountants, unveiled a survey showing that councils were planning to cut 73,000 jobs next year, while the unions said even more could go.

Brian Strutton, of the GMB union, said: ‘The scale of cuts will be a devastating blow to council workers as local services are to be slashed. Support for the needy and vulnerable will be particularly hard hit including carers for the elderly and children’s social workers.’

Weekend explainer? Town Halls have been advertising jobs of debatable value for years

Weekend explainer? Town Halls have been advertising jobs of debatable value for years

  • The Olympic Games security budget could be slashed by 21 per cent. Ministers indicated that spending on protecting the 2012 London Games against threats such as terror attacks is set to fall by as much as £125million – from £600million to £475million. The Opposition accused the Government of breaking its promise to protect the budget. But Police Minister Nick Herbert said it was possible to make savings ‘without creating additional risk’.


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