Cllr Peter Robbins: The Impact of the Cuts

Lambeth Labour Councillor Peter Robbins gives us his verdict on the coalition cuts and how they’ll affect us

Last week, the Coalition Government released their spending plans for the next four years. Plenty of attention has been paid to the Comprehensive Spending Review (CSR) in the media, but it’s not always easy to see exactly how it will affect your area, your neighbours, and the public services you rely on. So I suggested I write this article for Brixton Blog readers to try to do just that – work out how the CSR is likely to impact on Lambeth.

I’m a Labour councillor in Lambeth, so will inevitably attract comments claiming I’m biased (and I am). But I’ll try my best just to stick to the facts. Likewise, this is not the place to rehearse the arguments for or against the decision to cut spending so deeply, or who will be most affected – that’s been done plenty of times elsewhere.

The CSR covers every pound of taxpayers’ money to be spent by the Government, either nationally or locally, over the next three years. I’m going to ignore the ‘national’ decisions on defence, international development, transport etc – and focus on what the CSR means for your streets, home, schools, and safety.

So let’s start with the three major announcements made in social housing – an issue of huge importance to Lambeth. Firstly, the cap in housing benefit –  this will impact on about 5,400 households in Lambeth (mostly in private rented accommodation). It is worth noting that only 20% of people who receive HB are on Jobseekers Allowance – the disabled, workers on low incomes, and the elderly will be affected most (two thirds of the 30,000 Lambeth council tenants receive some level of HB). Lambeth’s Cllr Lib Peck last week gave evidence to a House of Commons committee on this subject on behalf of London Councils (watch it here).

Secondly, the CSR saw huge cuts to housing capital – including cutting Decent Homes funding by about a third (about £80m less for Lambeth). Only 40,000 new council homes a year will be built nationally – despite a waiting list of 500,000 in London alone.

Thirdly, and perhaps most significantly given that 30,000 households in Lambeth are in social housing, George Osborne announced that new social housing tenants would have to pay 80% of market rents – that could see social housing rents in North Lambeth rise from £80 a week to £250 a week.

It’s a pretty bleak picture for residents in Lambeth – and the Government has already admitted there are likely to be increased levels of homelessness, overcrowding, and sub-standard housing.

In education, the headline ‘good news’ of the CSR was that schools budgets would be protected, and a new ‘pupil premium’ would be introduced. Unfortunately this is already unravelling, and it is likely that many Lambeth schools could see their funding cut. Hopefully this will become clearer over the coming weeks, but whatever happens local schools will also be affected by a likely reduction in services provided by the council (social care, pupil places, special needs support etc) as a result of the local government cuts.

In higher education,  the swingeing cuts of 40% in favour of student contributions and the removal of the tuition fee cap will make a UK degree one of the most expensive in the world – and mean university is simply not an option for young people from low income families. Further education has also been hit, and the Education Maintenance Allowance, relied upon by thousands of young people to fund travel costs to college, will also be scrapped.

In terms of school buildings, Lambeth had over £200m cut from its secondary school building programme in July, though some was restored after the threat of legal action. The CSR saw a further 60% cut from educational capital budgets, despite a growing shortage of primary school places (expected to hit 28,000 in London by 2014) that is particularly acute in south Lambeth. If anything is giving Michael Gove sleepless nights it is surely this.

Crime and community safety continues to be the number one priority for Lambeth residents. The CSR saw local police budgets cut by 20% – but it is unclear what this means for uniformed police officers and the highly valued Safer Neighbourhood Teams, and it is fair to say that this will be a political football for some time, until each local force has set out their plans to deal with the cuts. However it is likely that Lambeth will again be hit much harder than other areas.

And what of Lambeth Council itself, responsible for delivering a huge number of local services? About 90% of the council’s funding comes from central government (only 10% of Lambeth’s funding derives from council tax) so the council is hugely dependent on the decisions made by the government. The very breadth of responsibility held by councils mean that cuts made elsewhere also impact directly on the council. For instance, Lambeth will have to pick up the pieces of benefit changes by providing temporary accommodation for people made homelessness, and any cuts to police activity could see more antisocial behaviour. Increased poverty will see more demand placed on key services provided for vulnerable people.

Overall, it’s fair to say the cuts were as bad as anyone had expected, and are much greater than those being borne by any national government department. Instead of the 25% cuts that the council was predicting, councils will now face cuts of 28.4% on average over four years.  Lambeth is also a ‘floor authority’ which means your council will be even harder hit than other authorities (such as Wandsworth). That means about £90m out of a total of £310m will be cut from the budget.

The really bad news only slipped out later – instead of the cuts being spread in equal instalments over the four years as the Chancellor announced in his statement, the cuts are actually being frontloaded.  For Lambeth that will mean having to make cuts of £40m next year instead of the £20m we were expecting. Independent commentators have described councils as having been ‘singled out’ for attention – so that the coalition can spread the blame when the cuts start to be felt.

Of course, one person’s ‘cuts’ are another’s ‘savings’, and every pound that can be ‘saved’ means a pound less in cuts. In Lambeth £35m of savings were made in the last four years without affecting frontline services, but the more waste that is eliminated the harder it is to identify further savings. The council is actively pursuing opportunities to save back office costs by sharing services with neighbouring boroughs Southwark and Lewisham, and other public sector bodies such as the NHS. There is a great deal of national interest in Lambeth’s Cooperative Council Commission due to report in December – which should generate proposals to transform the way some services are run by engaging communities and service users more closely, generating cost efficiencies and enabling Lambeth to do more with less.

But the bottom line is that government cuts of almost 30% cannot realistically be absorbed without affecting frontline council services. With £90m less to spend, councillors now have the difficult task of deciding where and how those cuts will fall.