What do the cities of Newcastle upon Tyne, Sheffield and Kingston upon Hull, all have in common? No, or very few, Conservative councillors and each city is headed by a Liberal Democratic Council Leader. Many other northern towns and cities can be added to this list. These same Lib Dem councillors are going to find the funding cuts now being implemented as part of the coalition's Emergency Budget very uncomfortable to action. Many find themselves at odds with the Parliamentary Party, especially the leadership, in having to enact measures they often vehemently opposed during the 2010 Election campaign - and still do.
A majority might well have preferred to support some form of Labour coalition, led by a new Prime Minister or a minority Conservative administration, but their political masters at Westminster chose the power and possible glory with the very real responsibility option instead. To date, this Conservative/Lib Dem coalition is working much more effectively and smoothly than many expected, though this is little comfort to "our friends in the North".
The Chancellor of the Exchequer, George Osborne, has just passed legislation that will see the most swingeing cuts in government spending ever enacted in peacetime. His approval rating, according to last weekend's Financial Times is over 70 percent, probably to his own pleasant surprise and helping to pull his Party's opinion poll ratings over the 40 percent level which most certainly, if achieved at a general election, would deliver a clear working majority.
Yet whilst the Conservatives bask in their new popularity, rewarded for their tough austerity measures and Labour is in a kind of limbo awaiting a new leader, the Lib Dem ratings have collapsed to under 20 percent once more and their leader, Nick Clegg, is not seen in such a positive light, either by the electorate at large or by his Party's rank and file...
When initial, additional cuts (to the ones already proposed by Labour in office) of £6.2 billion were announced in May, councils in England were told that they would lose £1.165 billion. A spokesman for Sheffield City Council said that as the city had approximately one per cent of England's population, Sheffield expected a funding loss of £11 million, unpleasant but no disaster. Since then of course, the Emergency Budget has asked all government departments not ring fenced to prepare for much harsher cuts, including a worst case scenario of 40 percent over the next four years. John Shipley, Newcastle's Lib Dem Council Leader has a lot of new calculations to make and ones he has to persuade his fellows on the council to agree to. He and his colleagues will be the face of Council cuts.
The Department of Communities and Local Government which currently disburses £82 billion to local authorities in England, is expecting a reduction of between 25 and 30 percent over the next four year period. Another aspect of the cuts and having a particular affect on areas of high unemployment, is the reduction in Housing Benefit payments of £360 million per year for the next four years. Then, not helping matters from a local authority's perspective, is the freeze in Council Tax next April although the Government has promised help to "low spending" councils. If there is no increase in the Council Tax's current yield of £26 billion and Business Tax reckoned to produce £21.5 billion in the current year, how can local authorities make up the shortfall from central government funding?
The answer is that they will have to take measures to reduce costs, revise contracts, increase productivity, increase charges for their services and, the big saver, the one central government most likely wants to see, reducing councils' workforce.
Take Newcastle, a city with a mid-2008 population of 277,800. Once a centre of heavy industry, coal and breweries, it now depends very much on office, service and retail sectors for its economy - and a very large central and local government input. Large employers include HM Revenue and Customs; three large teaching hospitals amongst others; Newcastle University (4,500 staff and £340+ million turnover); Northumbria University (3,000+ staff); Newcastle College, largest FE College in the North East; nationalised Northern Rock; even the Airport is 51 percent owned by surrounding local authorities. Throw in the City Council itself and its social services and add the money spent on unemployment benefit, tax credits, housing benefit, disability allowance and other central government grants and it is estimated that 70p in every pound in the North East emanates from government.
Newcastle's Council has 78 members: 42 Lib Dems, 34 Labour and 2 Independent. In 2009, the Lib Dems peaked at 50 councillors to Labour's 28. There have been no Conservative councillors since 1995, their support steadily eroding after 1980
Issued on 22 February 2010, the Newcastle City Council's 2010/11 Budget and Corporate Plan's opening paragraph reads: "The aim...is to achieve further efficiency savings...that will enable the Council to protect services and avoid service reductions...and invest in the city to boost employment, improve housing... To that end further in-year efficiency savings of £10.3 million have been identified ...and an overall net revenue budget of £270.3 million is proposed for 2010/11, which is an annual increase of £4.0 million (1.5 percent)."
The proposed increase in Council Tax is 1.4 percent and there is in the hundred odd pages, a hint of possible hard times to come warning of "a limited increase in some fees and charges will provide the money to...help pay for the additional cost of complex packages of care for vulnerable children, adults with special needs and older people..."
Not in their worst nightmares did the Council expect the size of the cuts now expected as towards the back of the report they state they will plan an expected 7.5 percent cut in the three year spending plan after 2011 and a worst case, "Scenario B", 15 percent cut over three years and with pride, the Council quotes from their December 2009, Audit Commission report:
"There has been innovative and strong local response to the recession. This is helping to sustain many local businesses and creating jobs...Those without jobs are being helped to get back into employment through Newcastle Futures."
The Council expected to lose in fiscal 2010/11, 90 jobs and create 13 for a net loss of 77 posts.
I am unaware of the details of "Newcastle Futures", but it will no doubt be one of the range of schemes that the previous Labour government helped put in place and that is now soon to be axed.
Appointed by the Prime Minister, David Cameron, as a "jobs czar" and advisor on broader social issues, Labour MP for Birkenhead, Frank Field has already warned the coalition against dropping Labour's jobs guarantee scheme to more than 200,000 young people telling The Guardian on 10 June 2010 that the future jobs fund was one of the most "precious" projects by the last government and urging a rethink.
As industry and manufacturing jobs have declined or disappeared altogether in the UK, government, especially it seems in the north of England, has boldly stepped in to fill the breach and the Lib Dems have picked up the collapse in Conservative votes and councillors. Necessary or not, in the long run, the Conservatives were the ones to make the initial savage cuts in the areas where industry was foremost and where there were few alternatives. Now that local authorities are soon to feel the full impact of the austerity measures passed through Parliament and will have no money for creating work or even maintaining the current work level, the Lib Dem councillors will be praying that Saint Frank of Birkenhead's views will take firmer hold in the coalition than they have to date and may even spark a "junior partner" rebellion.