Cuts and Funding for Local Government

Back to all Motions

2014 Local Government Service Group Conference
13 February 2014

Conference is alarmed by David Cameron’s statement that Coalition government policy “…means something more profound. It means building a leaner, more efficient state. We need to do more with less. Not just now, but permanently” and by the further cuts to local government planned by George Osborne beyond 2015/16.

Conference notes with alarm that:

1)Catastrophic damage is being visited on local government services, jobs, pay and conditions as a result of reductions in central government support announced in Spending Round 2013. Before adjusting for inflation, these cuts will bring a total cut in support of £11.3bn between May 2010/11 and 2015/16 in England alone.

2)In Scotland distributable revenue funding will fall by £1.311bn from £10.668bn in 2010/11 to £9.257bn in 2015/16. Councils in Wales face cash reductions of 3.5% this year and councils in Northern Ireland are being re-organised and facing overall cash reductions.

3)These cuts are unnecessary. The UK has the sixth largest economy in the world. Only the US, China, Japan, Germany and France have larger economies.

4)The removal of the National Insurance partial exemption for local authorities from the move to a Single Tier pension will create an additional annual cost to local authorities of £2.6bn in 2015/16.

5)While David Cameron, declares that there is “no magic money tree”, the Government has already allowed the Bank of England to create £375bn of new electronic money to finance purchases made under Quantitative Easing which have not benefited public services or public service workers.

6)The Treasury is the principal benefactor from local government pay awards through National Insurance and taxation.

7)The pre-briefed version of David Cameron’s 2011 Conference speech included “The only way out of a debt crisis is to deal with your debts. That means households – all of us – paying off the credit card and store card bills.”

8)Instead the current ‘so called’ recovery is being driven by the Government encouraging increased household debt through public sector pay restrictions, benefit cuts, high increases in fuel, travel and utility costs and measures such as the Help to Buy scheme. New record levels of household debt of £1,431,565,000,000 were recorded in November 2013.

Conference believes that:

a)We need local government funding structures and settlements which provide sufficient resources to improve service provision, meet unmet need, restore the value of local government pay and restore lost working conditions.

b)The Conservative-led Coalition is simply using the 2008 banking crisis as a justification to drastically cut public expenditure in an ideological move to create a ‘smaller state’

c)It is important for the UK economy to improve services provided by local authorities because they are critical to our economic performance, generate good health and levels of education and skills and prevent imprudent use of public money on crisis intervention

Conference therefore calls on the Service Group Executive to work with other parts of the union, other local government bodies and Labour Link to build on UNISON’s current alternative economic strategy which includes a ‘Robin Hood’ tax, tackling tax evasion and avoidance and reversal of tax breaks on the ‘super rich’ and develop an accompanying agenda for local government finance, jobs and pay and conditions within the four UK nations that includes:

i)New proposals for the future direction of local government finance that are sustainable, fair, provide for equalisation, local democratic accountability and determination and which minimise avoidance and maximise ease of collection.

ii)The ‘greening’ of local government to increase efficiency and create environmental sustainability.

iii)A resource distribution model that is based on need.

iv)A ‘sharing model’ that better enables local authorities to support public sector efficiency and share in the results.

v)Immediate financial measures to increase local authority service budgets from 2015/16, including exploration of:

A)using the (debt free) money creation powers of the Bank of England to re-finance existing local authority debt.

B)the development of a public sector equivalent to quantitative easing or the application of ‘overt money finance’.

vi) Careful progress on merger of Local Government Pension Scheme (LGPS) funds, accompanied by the removal of the ‘hidden charges’ by city institutions, the application of the Institutions for Occupational Retirement Provision (IORP) Directive and the move to in-house investment management – bringing savings estimated at £500 million.

vii) A new workforce strategy that includes the Living Wage as the minimum pay rate, maintains equal pay proofed pay structures and provides access to high quality training and workforce development, apprenticeships and a ‘gender agenda’ to address the needs of a predominantly female workforce.