Prepare now for local council spending cuts warns Audit Commission report

THE AUDIT COMMISSION warns that councils - including those in Yorkshire and Humberside - should start preparing now for the "leaner times ahead" because of the impact of the credit crunch and recession on local authorities.

The "Surviving the crunch" report says that in the main the recession has so far affected the private sector. It is now the public sector - major local employers - that will have to face up to the realities of recession. Councils must think bigger and act quicker to reduce costs, urges the report, or funding cuts will cause more damage to services and jobs than is necessary.

Most councils have been cushioned from the worst of the recession because the government stuck to three-year funding settlements. But this ends in 2011. On average, councils receive two-thirds of their income from Government grants therefore cuts in public spending are likely.

Even though the timing and extent of cuts in government support are unclear in the report, it says that councils must engage early with staff and the public about options for coping with shrinking resources. However, it notes the lack of experience of councils in consulting with the public on how to tackle serious budget reductions.

The best-prepared councils need to take action now to preserve services in the years ahead and consider all options for managing pay bills including - but not only - staff cuts.

The report notes that the impending General Election is encouraging local political leaders to think short-term with councillors who will not "consider significant changes until after the election".

Local press, business leaders and politicians have hinted recently that the recession might be over in Hull and East Yorkshire. Therefore the Surviving the crunch report will serve as a chilling wake-up call!

Notes: The Audit Commission is an independent watchdog promoting efficiency and effectiveness in local public services to deliver better outcomes for everyone.