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And so the first big bombs in the CSR war have gone off. Councils will lose 25% to 30% of their funding over the next four years. These cuts will be front loaded so we will definitely be seeing further redundancies in the current year. Whilst the overall picture is grim, and certainly grimmer than the CSR announcement itself would have you believe, the position for many authorities is still not clear. The grant system from which the government intends to cut funding has itself been changed. This adds some obscurity to the actual funding a Council may look forward to. It is said that the Deputy Prime Minister is concerned about the lack of detail and clarity in some of Communities and Local Government’s proposals, and there may yet be changes, which introduces another degree of uncertainty.
All over the UK councils will now be looking at the announcements on grant, modelling the massive cuts to capital spending, trying to work out what the changes to council house rents and housing benefits will mean to their communities and to their own income streams and then looking at what increased demands for services, that are always part of a recession, means for their business planning. And for some they will still only be able to see half the picture. Decisions on grants and formulas will now be made in Government departments that will have a crucial impact on communities across the UK. For many the bombs have only just started to explode, there are more to come.
And of course this level of reduction cannot be ring fenced to the public sector. I have been predicting for some time that this level of both size and speed of reduction will also decimate companies that are in local government’s supply chain. Well now, after the event, both PWC and KPMG have said that this will destroy many private sector jobs. I am grateful for their support, but it may have been stronger if they had issued their warnings prior to the Chancellor’s speech. See the PWC view here and the one from KPMG here. And finally, a small piece of etiquette was apparently overlooked by Mr Pickles’s team at CLG this week. After announcements such as the CSR the Secretary of State traditionally writes to all Council leaders and to Chief Executives outlining why the government’s announcement are good news (and they are always couched as good news irrespective of the announcement!)
It seems that this week he forgot to post the ones to Chief Executives. Well it is a new set of ministers and mistakes do happen. If you want to see what he would have said, and did say to leaders, click here
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I can imagine why large private sector companies are worried about imminent cuts, perhaps even more so than the Public Servants - like many others they have been leeching off the Public Sector for years. Why is it that they continue to be rewarded with massive contracts, most of which fail to deliver anything tangible, leave the Public Sector exposed, or leave the Public Servants to pick up the pieces afterwards? How many of your members have already had the "Big 4" in, lining up cost cutting projects, charging a fat fee, then leaving the hard work of actually doing it to the Public Servants? How many are picking up the pieces from Rok and Connaught? How many are now being advised to make (artificial) savings by consolidating procurement into larger wholesalers, for example, thus squeezing even more small players and SME's out? How many have been encouraged to outsource everything, on the premise that private companies are more productive?
I greatly enjoyed your speech at the recent PS Event at the Barbican, but feel that the paradigm shift of which you spoke is being bungled and botched, badly.
By Richard Shipperbottom on 02/12/2010 @ 10:29:46 | Country: UK |
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