Eric Pickles: scaling back the quango state.

Local government cuts go deep

Published:  18 June, 2010

UK: Just under one-third of the Government's £6.2bn in-year savings will come from local government-related spending. Heather Jameson reports.

As the sector feared, the bulk of the Government's saving plans have fallen onto local government. This is due to the Government's readiness to protect health and schools budgets.

After several delays, local government secretary Eric Pickles published details of where the cuts would fail. While the department claimed councils would face no more than 2% revenue grant cuts, the full reality of the impact on the sector is far more stark.

Local government itself will face £1.166bn cuts, while Communities and Local Government and its arms length bodies face a further £780m – bringing the grand total for the sector to just under £2bn.

The biggest casualties of the cuts seem to be the Local Authority Business Growth Incentive (LABGI) and cross-cutting cash to tackle community cohesion.

The CLG has pledged it will cut 10% of the operational costs of the department and its arms length bodies, but claims the£29bn general grant will not be cut which it says will 'ensure that key frontline services can be protected' and councils will not have to increase council tax.

Announcing the cuts, Mr Pickles said: "Tough fiscal times will be challenging for all, but the reductions have been made to reflect the Government's policy of decentralisation and a scaling back of the quango state.

"The detailed spending decisions outlined today show a clear determination to make the necessary savings while minimising the impact on essential frontline services like rubbish collections and protecting spending on schools and Sure Start. We have focused attention on reducing the centre and it is here that the reductions are the hardest.

"Steps have been taken to limit the impact on local authorities and make savings proportionally. Councils have been given the flexibility they need to determine where they make savings. We are clear that no extra burden must fall on local taxpayers. We are committed to freezing council tax in England for at least one year, and seek to freeze it for a further year, in partnership with local authorities."

Commenting on the cuts, Local Government Association chairman, Margaret Eaton said: "We have to recognise that these cuts will be painful to implement this year and will have a significant effect on services and the people who rely on them.

"Town halls have already carefully planned their budgets, made commitments and set priorities and it is not easy to change their plans in the middle of a year. Extra flexibility to take local spending decisions will help councils cope.

"Further cuts are inevitable and we will work with the Government to deliver reform and minimise the impact on services people rely on."

In return for the savings, she said councils "need nothing less than a transformation of the way the public sector works to deliver savings through a bonfire of bureaucracy, a radical scaling back of the quango state and giving power to the people who know their areas best".

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