Welcome to Austerity Britain

Well now we have it!

After weeks of speculation and a steady drip feed of announcements on various departmental spending cuts we have finally got the Chancellor’s pronouncement as he unveiled the Comprehensive Spending Review.  It is every bit as grim as the Government predicted it would be and we are now living in Austerity Britain,

The people of Britain will for the next few weeks be treated to a media frenzy of analysis and political backbiting and we will have to come to terms with what it will mean for all of us as individuals, family by family and business by business.

Let us deal with the good news first.  It is good news to have it confirmed that the Government is honouring its promise to go ahead with its major refurbishment of West Cumberland Hospital. It is equally good news that Cumbria will be one of four areas in the UK to enjoy the roll out of super speed Broadband.  We should also be happy that the benefits that our pensioners have such as the Winter Fuel Payment, free TV Licences and free bus travel have been untouched.

However there are no silver linings in the Emergency Budget announced in July or the review of spending announced this week. Taking both of those into account the Chancellor has cut Government spending by £81 billion.  The devil will be in the detail of what some of his announcements will mean and it may be weeks or months before we understand what the full extent on public services and the pound in your pocket will be.  I aim to describe that impact to ordinary people over the next few weeks. 

Local Government and some of its services are going to suffer because around 26% of the grants given to local councils have been cut. Councillors and officers in Cumbria County Council have been working since the summer in order to identify what will be priorities and to prepare itself for what the Council’s Leader, Eddie Martin described as a financial tsunami.

The County Council spends some £845 million on running its services.  Of that £205 million is raised locally through the Council Tax on local ratepayers.  Another £103 million is raised in fees and charge such as hire of library books, charges for home care and residential care etc.  £324 million is ring fenced for local schools and is given to them directly. That leaves £214 coming directly from the Government for grants in one form or another. Some of those grants were for specific items and therefore ring fenced. E.g. Sure Start Children’s Centres.. 

It is this grant from Government which will feel the impact of the £26% cut.  The government has also removed all the ring fencing around this money so local councillors will be forced into making very hard decisions about whether to continue funding Children’s Centres or fill holes in roads.  The impact of that cut on the County Council is somewhere between £50m - £60m over the next four years and comes on top of the cuts the council had to find in this years budget. 

Now I did say that there was no silver lining in any of this.  Some could be forgiven for thinking that at least pensioners have been protected.  However one of the cuts yesterday was to the bus subsidies given to local authorities.  In rural Cumbria that is bad news.  It means that the council will not be able to subsidise all of the bus routes that it does at the moment and inevitably bus services will be cut.  So the bus pass may still be around but there will be less buses for our pensioners to get on. There is also a devastating cut of 15% in the funds to relieve flooding.

Another serious cut is in housing and the ending of tenure for life of what we used to call council housing.  It means that anyone new coming in and registering for social housing will be required to pay 80% of the market value as rent and will not be allowed to stay in those properties indefinitely.  The silver lining here apparently is that this will free up the cash to build 150,000 new homes.  They are not necessarily going to be built by local councils or housing associations of course and many people will be expected to buy them.  When we add up the impact the changes to benefits, including those for children, it will be hardly surprising if the gap between the rich and the poor will continue to widen.  It seems that the poorest will pay more for the mistakes of the rich and the wealthy drawing inevitably to the conclusion that the silver lining has a tear in it.

The impact of the Comprehensive Spending Review will be felt for decades.  490,000 jobs will go in the public sector alone and some of those job losses will be in West Cumbria. Many local people are now living in fear of losing their jobs and being forced to join the dole queue. The cancellation of major capital schemes like the one that would have seen a new school in Workington and a virtual rebuild of Netherhall in Maryport will work itself out into another round of job losses in the private sector.  Watch out for job losses in the building and construction industry as this works through.  Also in the retail sector as there will be less money to spend on goods and services. It is being predicted that we will see around 1 million out of work as a result of these measures.

The Chancellor reckons we are all in this together.  It’s a great sound bite made to make us feel as if we all are suffering equally.  The reality is that the poor and families on middle incomes and children and students are taking the hardest hit while the Bankers who have caused a global crisis around the world get off with a paltry sum.  They owe us big time and I think Osborne whilst claiming he was being tough in reality let them away with it.

Cameron, Osborne and Clegg were born into a wealthier world that most of us and have probably never had to really struggle to pay the bills or look for work.  We may be all in it together but it does not include the Conservative and Liberal Democrat Coalition who applauded the Chancellor yesterday when he laid bare the deep cuts he is making to our public services and the damage it will do to economy.