Councils warn of huge cuts as budgets get slashed

Local authorities are facing a ten per cent reduction in Government funding next year – leaving multimillion-pound black holes in budgets.

Southampton City Council leader Simon Letts, below, said the Chancellor’s spending review presented a “bleak picture” and the city should brace itself for more cuts to services and for hundreds of posts to disappear.

Hundreds of jobs could go at the county council alone on top of the 1,400 that have already been shed over the last two years.

The Conservative-led council is looking to save up to £80m by 2015 to cope with reduced Government funding.

But public sector union Unison has called the cuts “totally unnecessary” and said strike action could not be ruled out.

County council chief Roy Perry insisted he did not yet know how many jobs will go, but £10m has been earmarked in reserves for bigger payouts to staff who take voluntary redundancy.

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This is the same sum set aside in 2011-12 when about 1,400 jobs were shed, including 800 voluntary redundancies and 600 posts frozen.

The Cabinet met behind closed doors on Monday to discuss where the axe will fall.

But a confidential report on “transforming” the local authority was made public by Cllr Perry, below, after a request from the Daily Echo.

The report revealed that the council, which has 12,500 employees, is considering: l Further cuts to senior management and a freeze on recruitment l Clampdown on use of expensive agency staff l More effective partnership with the NHS to reduce demand for services, such as social care of the elderly l Renegotiating contracts l Fewer offices.

The county is facing a reduction of £13.7m in funding from Government in 2014-15 with further cuts to come.

The Government grant to local authorities for freezing council tax has also ended. The county is expecting a total loss in central funding of £32m next year.

Mr Perry was among 152 council leaders to sign an open letter to Chancellor George Osborne earlier this month warning of a “serious impact on local services” if the cuts continue.

Meanwhile Southampton leader Simon Letts said city residents would be hit the hardest.

He said: “It will be extremely difficult and bleak for Southampton and other urban councils who have borne the brunt of the cuts.

“Hampshire County Council raises most of its money through council tax, but we get more grants because we have more poverty.”

With 75 per cent of costs being staff wages and salaries, Cllr Letts said it was inevitable that jobs would go at the same rate they have been going.

In the past three years, 555 posts have been lost, with the axe falling hard in children’s and adults services.

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Park keepers, street cleaners, librarians, social workers and care managers have also been among the casualties.

He added: “Frankly we are at the stage now where all the flesh has been cut from the body and we are down to the bone.

“It’s a like a needle in a haystack searching for efficiencies that don’t affect frontline services.

“We are basically delivering Tory cuts.”

But senior Conservatives in Westminster have insisted there is still “plenty” of waste for town halls to cut.

Conservative Party chairman Grant Shapps, below, attacked some council bosses for boosting their reserves even as they protested about funding cuts.

Hampshire has come under fire from unions and Liberal democrat opposition councillors for hoarding more than £300m in contingency funds meant to cushion the authority in hard times.

Most of the funds are earmarked for specific purposes, such as settling insurance claims and schools, but millions could be used to head off service and job cuts.

The reserves are expected to increase in the annual accounts to be published in September, according to a Cabinet report.

Tim Cutter, branch secretary of Unison at the county council, said: “Our position is the council should use its reserves to make up for the loss of Government grants.

“These job cuts are totally unnecessary. The reduced Government grant is just an excuse to pursue a political agenda of privatising services.”

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Councillor Keith House, leader of the Liberal Democrat opposition group on the council, said job losses were “inevitable” given the reduced central funding.

He said: “Hampshire has cut more services than necessary in the past.

“My challenge to the Conservatives is to make savings without reducing the quality of frontline services.

“This means more cuts to management and more joint working with districts and public sector partners in the NHS and the police.”

But Mr Perry defended the council’s cost-cutting plans.

He said: “If we did not have further reductions in county council spending, we would quickly exhaust the reserves and have no means in the long term to reduce our expenditure.”

The county council has already slashed £100m from its budget over the last two years.

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