Of all the victims of George Osborne's Comprehensive Spending Review, none have more cause for complaint than local government. Councils are facing a 27 per cent cut in central funding, adjusted for inflation, by 2014-15. That compares with a 3.4 per cent cut for education, a 7.5 per cent cut for defence and a real terms increase for health. And thanks to the Coalition's two year freeze on council tax it will be difficult for councils to raise more money themselves to ease the pressure of this squeeze from the centre.
It has been estimated that this fiscal consolidation will result in 100,000 jobs disappearing in local government. Birmingham City Council, Britain's largest local authority, has already put 26,000 employees on notice that their jobs are at risk. But it is not just those who work for councils who are under threat, it is the things they do too. Spending on basic council functions such as rubbish collection and local transport is likely to fall.
And the impact will go considerably further. The other services that councils provide – from youth groups, to local swimming pools, to libraries, to social workers, to meals-on-wheels – are part of the social glue that keeps communities together. They too are under threat.
One positive element amid the gloom of the Spending Review was the announcement that councils will be given more freedom about how they spend their grants from the centre. The number of ring-fenced subventions from Whitehall will be reduced. If a council feels strongly that a specific local service ought to be saved, it can attempt to do so. Yet with cuts on this scale, it is inevitable that a host of valued services will go. The social glue that local councils provide is going to decay.
The bitter irony of the situation is that the Conservative Party has taken a refreshingly close interest in binding communities together in recent years. The goal of David Cameron's "Big Society" agenda is to encourage and facilitate volunteering and community action. The thrust of this is entirely laudable. Mr Cameron is right when he argues that too many of our communities (particularly in our inner cities) suffer from inadequate mutual bonds of support.
Yet Mr Cameron and his policy guru, Steve Hilton, have never recognised the extent to which local charities and volunteer groups are supported by local councils. Sometimes the support can be purely financial, in the form of grants. At other times it can be indirect, such as when a voluntary group is permitted to use a council's premises for free, or at below market rates. Both of these lines of support are likely to be cut as councils come under intense pressure to save every penny and maximise every revenue stream.
More ominous still is that Mr Cameron and those around him seem hostile to the very principle of active local government. Their schools policy has been designed to bypass Local Education Authorities, making the lines of accountability between new community-run schools run directly to the Education Secretary. And if local authorities want to raise council tax above a certain rate, the Communities Secretary, Eric Pickles, plans to impose a local referendum lock. This is a recipe for the long-term fiscal emasculation of councils.
All the evidence suggests that the Big Society Mr Cameron envisages will be a replacement, rather than an addition, to the things councils do at the moment. So will a Big Society spontaneously rise up to fill the gap that will be created by his Chancellor's savage assault on local government? The answer is that it will have to, because thanks to the Spending Review, councils are now out of the game.Reuse content