Socialist Worker

Tory axe leaves black hole in local councils' finances

Contrary to claims by some of the press austerity is not over. Socialist Worker looks in more detail at Tory chancellor George Osborne’s Autumn Statement

Issue No. 2482

Hundreds of thousands of people have marched against austerity in Britain

Hundreds of thousands of people have marched against austerity in Britain (Pic: Guy Smallman)

The Tories’ slash and burn of council services continued in last week’s Autumn Statement.

Local government grants in England would be cut by 56 percent in the next five years.

That’s another £6.1 billion from councils by 2019. The Local Government Association’s (LGA) reaction warned of a bleak future.

“Even if councils stopped filling in potholes, maintaining parks, closed all children’s centres, libraries, museums, leisure centres and turned off every street light they will not have saved enough money to plug the financial black hole they face by 2020.”

Council budgets face a £4.1 billion a year black hole. This follows a reduction of 40 percent in the last five years.

That is a 79 percent cut in government funding for councils since the Tories came to office in 2010. And by the end of this parliament they plan to axe the central government grant altogether.

George Osborne has again pushed the brunt of cuts onto local councils.

For example he shifted responsibility for funding social care for the elderly and vulnerable from government to local residents.


All 150 councils that provide social care will now be able to levy an extra 2 percent on to their council tax bills from next year.

That means a doubling of council tax increases, adding hundreds of pounds to council tax bills.

Council bosses say they face a £2.9 billion shortfall in care funding alone. There is no guarantee every council will raise tax by 2 percent or that it would be used to fund social care.

An extra £1.5 billion is to go into the Better Care Fund, which is supposed to help integrate health and social care services. But the scale of the austerity-driven crisis in care services has meant the money has simply been used to plug gaping holes in order to avert disaster.

Osborne claims his measures will lead to a rise in social care spending by 2020, but the LGA disputes this and said that a £700 million funding gap would only widen.

The Tory chancellor said councils will be able to retain 100 percent of their business rates instead of 50 percent as they do now.

This means councils in rich areas will do better than those in poor areas.

Osborne also said councils can use the proceeds of any assets they sell to fund services. So encouraging more sell offs at a local level.

The winners in all of this are the corporate vultures preparing to swoop as services get farmed out.

Assets sold, pledges gone - but more cash for Her Maj

  1. The Great British Fire Sale Whitehall departments will sell £4.5 billion of land to fund cuts, including £1.9 billion from the Department of Health. Osborne is also selling off bank loans and government debt for £40 billion. He is is continuing with his fire sale of the Land Registry, Ordinance Survey and Student Loans for £5 billion.
  2. Student nurse funding scrapped Osborne made a big deal about scrapping the cap on student nurse numbers during his speech. But he slipped in that state funding for student nurses is going to be scrapped altogether. Nurses will get their £6,000 tuition paid for with a loan, which they’ll have to pay back after they qualify.
  3. Free childcare pledge disappears Osborne has stripped back the Tories’ free childcare pledge by denying it to up to 1.4 million part-time workers. People working less than 16 hours a week won’t be able to claim 30 hours of free childcare when it launches in 2017.
  4. Two million graduates to pay more Millions of graduates will soon have to repay much more of their loans than they were initially told after the Tories secretly backtracked on a promise. It will mean more than two million graduates will end up paying £306 more each year by 2020-21 if they earn over £21,000. It wasn’t in Osborne’s speech, but buried on page 126 of the Autumn Statement.
  5. Tampons still a “luxury” George Osborne has refused to slash the offensive “tampon tax”. Instead £15 million raised from VAT placed on sanitary products, which are classed as luxuries, will now be ploughed into women’s charities, including domestic abuse refuges.
  6. Maj scrounges more from the state A tiny detail buried on page 114 of the Autumn Statement confirmed the queen will get £42.8 million next year—up from £40.1 million. George Osborne has handed the queen a whopping 7 percent pay rise. This will no doubt help the chief royal scrounger get by, as she has to struggle to live on her estimated £340 million fortune.

National debt on the up, despite Tory cuts

Deep cuts to government departments will see the operational transport department budget fall by 37 percent, the Treasury’s by a quarter and three other ministries’ by 15 percent.

It means at least another 100,000 public sector jobs cuts on top of the 500,000 that have already gone, and more pay freezes for those that remain.

The national debt the Tories claimed they wanted to cut is set to rise to £1.7 trillion.

More dosh for developers

Osborne said, “We are builders.” He meant property sharks.

Some £61 billion is going to transport infrastructure—but this will be trousered by private firms.

He announced £2.3 billion extra for property developers but it is far from clear that the 400,000 homes promised will be built at all, let alone where people most need them.

None of them will be council homes.

House building companies’ shares jumped at the announcement.

More dosh for jails

About £1.3 billion is to be spent on nine new jails—five to be erected by 2020.

Inner-city Victorian prisons will be sold off to housing developers. The closure of courts and prisons would release more land on which can also be farmed off to property sharks.

New video conference facilities are to enable 90,000 cases to be heard in prisons instead of in a court.

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