Agenda item

The Chancellors Autumn statement has set the country on course for a “more painful” austerity drive after the next general election   after more than a Decade of austerity starting under David Cameron and George Osborne.

The £20bn package of tax cuts is almost entirely funded by swinging real-terms reductions to public spending planned from 2025 when it may not even be in government according to the Institute for Fiscal Studies.

It is estimated that the NHS receives 20% of its funding from National Insurance.
The plans to cut National Insurance means that some funding for social care and the NHS will have to come from other budgets or general taxation.

This implied a 1.8% cut for unprotected budgets each year from 2024-25 to 2028-29, including for prisons, the courts system, local government and further education.
After taking into account funding settlements for Scotland, Wales and Northern Ireland, it said the plans implied cuts of 3.4% in England.

This Council  has had more than 50% of its budget cut since 2010 and is already again having to make difficult decisions in planning to achieve a legally balances budget for 2024-5.

Economists doubt efficiency gains on such a scale can be achieved. Councils all around us in the Southwest and throughout the county are on the verge of bankruptcy and many have already issued S114 notices.

This Council resolves to

1)    Write to the government to ask them to make no real time cuts to Local Government until  it has undertaken a spending review; and

2)    Seek the support of the Local MPs and the LGA to oppose the Chancellor’s Budget for Local Government.

Councillor Atkinson, seconded by Councillor Miller, moved a Notice of Motion in the following terms:-

The Chancellor's Autumn statement had set the country on course for a “more painful” austerity drive after the next general election and after more than a Decade of austerity starting under David Cameron and George Osborne.

The £20billion package of tax cuts was almost entirely funded by swinging real-term reductions to public spending planned from 2025 according to the Institute for Fiscal Studies

It was estimated that the NHS received 20% of its funding from National Insurance. The plan to cut National Insurance meant that some funding for social care and the NHS would have to come from other budgets or general taxation.
This implied a 1.8% cut for unprotected budgets each year from 2024-25 to 2028-29 – including for prisons, the courts system, local government and further education.
After taking into account funding settlements for Scotland, Wales and Northern Ireland, the plan implied cuts of 3.4% in England.

This Council has had more than 50% of its budget cut since 2010 and was still having to make difficult decisions in planning to achieve a legally balanced budget for 2024-25.

Economists doubt efficiency gains on such a scale could be achieved and Councils in the Southwest and throughout the County were on the verge of bankruptcy, with many having already issued S114 notices.

This Council resolves to

1)    write to the Government to ask them to make no real time cuts to local government until it has undertaken a spending review; and

2)    seek the support of the Local MPs and the LGA to oppose the Chancellor’s Budget for Local Government.

In presenting her Motion, Councillor Atkinson, made the following comments:-

·         media reports had indicated that there were more Councils in England being at financial risk;

·         the Autumn Statement had increased the likelihood of more local authorities facing bankruptcy;

·         years of underfunding and cuts had resulted in risks to the economy and local services;

·         many local councils were facing bankruptcy and could only afford to provide statutory services;

·         the prudence of Exeter City Council over many decades combined with the excellent support and guidance from the Finance Director and the Senior Management Board had ensured the Council was not facing such a predicament;

·         Leaders of some of the 33 largest councils across the political spectrum had written to the Local Government Commission and to the Government Minister, Michael Gove, warning of "painful" cuts to front-line services;

·         various Councils and the Local Government Association (LGA), had warned about a precarious financial picture for some time;

·         Devon County Council was facing the same crisis in funding;

·         the move by Government to increase the local housing allowance in the Autumn Statement was welcomed, but this would have to be funded from existing budgets;

·         a County Councils Network's survey showed that many Councils' financial positions were significantly worse than before the Autumn Statement;

·         a three-to-five year funding plan was needed, so services could be planned more efficiently; and

·         District Councils were required to explain to residents why they were unable to provide the same level of service, despite Council tax having gone up. 

Councillor Miller seconded the Motion and made the following additional points:-

·         the Autumn statement had again failed to provide the necessary funding for local Councils to deliver on commitments to protect key services on which people relied;

·         across the country, Councils were being forced to make extremely difficult decisions;

·         lack of funding to keep services running would have the most significant impact on those most vulnerable in our society; 

·         the Women’s Budget Group had also indicated that austerity was likely to have a greater impact on women than on men;

·         across the political spectrum, Councillors were calling for action.

During the discussion the following points were made:-

·         there was clear support for the Motion and local government was an ideal place to respond to people’s needs, but Government should not mandate local governments with a series of responsibilities, without the required resources;

·         there was support for the role of local government, the community and local environment but with a long term investment in the services and more investment and support was needed for local government;

·         the reference to the reduction of National insurance contributions was welcomed;

·         Exeter had seen some big benefits from Community Infrastructure Levy, New Homes Bonus, business rate relief which had provided funding over the years but while the Council was £163 million in debt, the Member could not support the Motion;

·         a reduction in the funding of local government was an easy option for Governments to take;

·         the voluntary sector had struggled with cuts since 2010 as well as with local government impacts. There were still many innovative ways of working to improve and maintain the services that Exeter provided despite national cuts;

·         a Member thanked Councillor Atkinson for bringing forward the Motion and supported the service choices made by Exeter City Council.

Councillor Atkinson, in concluding, welcomed the contributions and the cross party support. She was not against the cuts in national insurance, but against those cuts impacting the public sector and local government which would effect funding their non statutory services, as well as tackling important issues effecting the community. Councillor Atkinson reiterated that a complete spending review should be undertaken, and commended the Motion to Council.

The Notice of Motion was put to the vote and CARRIED.

The meeting adjourned at 8.30 pm and re-convened at 8.38 pm.