The Chamberlain News

Sir Bob Kerslake tells cash-strapped councils: ‘You’ve all done very well’

Local authorities are generally managing to avoid slashing front line services in an age of financial austerity, the top civil servant heading a review of Birmingham city council’s governance arrangements has insisted.

Sir Bob Kerslake said most councils in England and Wales were managing to cover huge cuts in Government grant by making efficiency savings, running services differently, and shedding staff.

Although there were some examples of service reduction, this was not generally the case and he believed local government “has done very well” in coping with challenging times.

Sir Bob was giving evidence to the House of Commons Public Accounts Committee in his role as Permanent Secretary at the Department for Communities and Local Government (DCLG).

Committee chair Margaret Hodge wanted to know how Sir Bob appeared to be so calm against a backdrop of record cuts in local government finance that will see 37 per cent lopped off council spending between 2010 and 2016 and £120 billion cut from total public spending.

Sir Bob said: “Local authorities have delivered significant reductions and the level of balances has gone up considerably. Our analysis shows they have found this so far through a great deal of efficiency savings. Local government has done extremely well in this process.

“It’s a combination of some service reductions and a lot of efficiency savings and reducing staff.

“Local authorities have done very well in managing some very difficult times.

“The bulk of savings have come through greater efficiencies. There has to be not just efficiency savings but transformation of the way services work as well.”

Sir Bob rejected claims from Labour MPs that the Government had deliberately targeted the most deprived areas. Councils with extensive areas of social deprivation, like Birmingham, suffered disproportionately greater cuts than wealthier areas because they had higher grant settlements in the first place, he said.

Sir Bob added: “There hasn’t been a conscious decision to move money disproportionately from the most deprived areas. It is a consequence of how the formula currently works.

“A decision was made to protect health services and international development and so once you make that decision local government is inevitably a major part of the unprotected budgets.”

Tackled about reduced spending on non-statutory areas of children’s services, Sir Bob said: “Of course we were aware that one of the services that would potentially lose was spending on youth services. A number of authorities have changed the way they deliver these services, or retained the services at lower cost.

“In relative terms local authorities have protected adult care services. Spending on children’s social services has in some instances gone up.”

MPs pointed to a recent report by the National Audit Office about the impact of cuts on local councils which warned that some town halls might go bust because they would soon no longer be financially viable.

The NAO report said the Government had only a limited understanding of the impact the cuts were having on council services. Auditors are “increasingly concerned” about councils’ ability to make more savings, the report said, with over half of authorities responsible for education and social care not well placed to provide the services they hope to over the next three to five years.

The report appeared to back up Birmingham city council leader Sir Albert Bore’s claim that a “jaws of death” scenario will see all non-statutory services closed down and eventually leave the council unable to afford to run social services and housing.

Sir Albert said: “We are pleased that an informed and respected observer such as the National Audit Office has recognised what we have been saying for a long time – central government cuts are placing enormous pressure upon councils and many are struggling to cope with the challenge they face.

“As the NAO says, the Department for Communities and Local Government needs to be looking at this more robustly than has been the case in the past. The DCLG needs to be better informed of the problems we are facing.

“Here in Birmingham we have lobbied extensively – our hope now is that the feedback from an impartial organisation such as the NAO means the issues we have been raising will finally be taken seriously at Westminster.”

“Our real terms estimate of Birmingham city council’s core grant reduction, from a 2010-11 baseline to 2015-16, is 45 per cent and a 35 per cent reduction in spending power.”

*Sir Bob Kerslake’s report into the quality of Birmingham city council’s governance arrangements and the clarity of strategic leadership and direction is expected to be handed to Communities Secretary Eric Pickles shortly and will be published before Christmas.