Compulsory redundancies in local councils are set to increase in the next few years as the spending squeeze from central government continues, a report warned today.
The 1.6 million people who work for England's 353 councils are the country's largest workforce, but their numbers have fallen by 145,000 over the past year and further job losses are "inevitable", said the report by the Audit Commission and Local Government Association.
The report said that the local council workforce - not including teachers, firefighters or police - peaked at the equivalent of 1.063 million full-time posts in 2007 but has since fallen to 932,800 by the middle of this year.
The overall council pay bill rose by 22% between 2004/05 and 2009/10, but has since fallen 5.6% in real terms to around £30 billion and is set to fall further, said the report.
The Work in Progress report called on councils to "strike a balance" between redundancies and restructuring as they reduce workforce costs. It cited cases of councils sharing backroom staff or removing entire layers of management to maintain numbers of frontline posts.
Audit Commission chairman Michael O'Higgins said: "Each council must find its own way of cutting costs tailored to local needs, local circumstances and its own workforce.
"Councils are often the largest employer in their area, so downsizing can affect the local economy.
"Local government is a people business, with staff costs accounting for almost half the money spent by councils, so they need to be aware of all their options and the tools at their disposal."
LGA chairman Sir Merrick Cockell added: "Funding cuts have meant workforce costs must come down. Councils have been ahead of the game in making savings and have already started to reduce workforce costs.
"Unfortunately, job losses are inevitable given the scale of cuts. Where these are necessary, councils are working hard to minimise disruption to staff and services through restructuring, shared services and outsourcing. They are also looking at how they invest in and reward people to ensure they continue to deliver the most efficient public services possible."
Brian Strutton, national officer of the GMB union, said: "The combination of central government budget cuts and councils' own decisions to keep council tax down has led to 145,000 job losses in the last year and there will be a further wave next year.
"Council workers face an unprecedented triple whammy of job losses, pay freezes and attacks on their pensions.
"Frontline council staff like dinner ladies, social workers, care staff, street cleaners, school staff and bin men are being made to pay the highest price in the economy for a financial mess they did not cause.
"As it is not possible to deflate the economy to growth and a balanced budget, the Government should act urgently to ease the budget cuts on councils so they can maintain frontline services to their communities in these difficult times as well as not adding more to the dole queues.
"The economics of the corner shop will not get us out of this mess. It did not do so in the 1930s and it won't now either."
Local government minister Grant Shapps said: "Every bit of the public sector needs to do its bit to help pay off the budget deficit left by Labour's reckless spending spree.
"Despite this, councils received a fair and progressive funding settlement that protects frontline services and shields the most vulnerable.
"The majority have been planning sensibly for smaller budgets.
"We've been clear that frontline staff and services should be protected and, as this report makes clear, the best councils are finding ways to do this by sharing back-office staff, closing vacant posts, allowing natural waste, reviewing bonus schemes and not renewing agency staff."