Britannia Radio

From The Times

May 11, 2009

Town halls cut jobs as local government loses £2.5 billion of income

Jill Sherman, Whitehall Editor

Almost 7,000 council jobs have been lost across England in the past six months, and a further 14,000 are expected to go over the next year as the recession continues to bite, according to research published today.

A survey from the Local Government Association shows that three in five councils have made staff reductions — including frontline posts — since last October, and a similar proportion is planning cuts over the next 12 months.

Sir Jeremy Beecham, vice-chairman of the Local Government Association, said that councils had been forced to make redundancies after a £2.5 billion cut in income.

Town halls have lost hundreds of millions through reduced parking and planning charges, lower-than-expected returns on investments and reduced income due to the property slump. Town hall chiefs claim that middle and senior management posts are being hit first, but they admit that jobs in libraries, sports and arts centres are also being lost.

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Seven in ten councils making redundancies say that they have cut middle management and frontline staff. Half of all councils claim that senior managers have been made redundant.

“Just as the private sector is having to cut back during tough times, so, too, councils are faced with incredibly difficult decisions,” Sir Jeremy said.

“As the recession continues to bite, we fully expect councils to keep cutting jobs over the course of the next 12 months. It is particularly regrettable to have to cut frontline staff, but this demonstrates the bleak financial situation that councils are in.”

London appears to be the worst affected, with nine out of ten boroughs already cutting posts and eight out of ten saying that they will lose more jobs in the next 12 months. Westminster plans to lose up to 400 full-time jobs, including 200 managers, although this could translate into a greater number of part-time workers.

Graham White, the council’s director of human resources, warned that £30 million a year would have to be saved within three years on job losses alone. The council plans to merge back offices in areas such as policy, finance and performance.

A 90-day consultation period will start in July for all staff affected, but Mr White said he hoped there would be voluntary redundancies and natural wastage. “Some staff might be willing to take up the Government’s plan to allow some people to take shorter six-month teacher training courses, if they wish to switch professions.”

The LGA survey showed that most councils were freezing pay and vacant posts, and reducing casual or agency staff. Town halls are currently in the middle of negotiations over this year’s pay rise. The unions have rejected the employers’ 0.5 per cent offer, with further meetings planned this month.

Sir Jeremy said that councils were being hit by a perfect storm caused by the recession, with income dropping away fast when more and more people were turning to councils for help.

“It is vital that this year’s pay settlement is affordable to the taxpayer and councils while at the same time making sure that local government continues to be an attractive place to work,” said Sir Jeremy. “If the pay settlement is set too high, then local authorities will have no choice but to lay off staff.”

The survey, conducted in March, was based on 165 authorities, a 43 per cent response rate. If the pattern is extrapolated across England, a total of 6,700 staff would have lost their posts so far. The LGA research shows that, apart from London, most of the jobs have gone in the West Midlands, the South West, the North West and North East.

A Times survey conducted in February showed that Newcastle City Council was planning to lose more than 500 posts, Nottingham 350 and Leeds 650. Some councils, such as Northumberland, were planning bigger reductions due to new council boundaries.

A spokesman for Newcastle City Council said yesterday: “We are looking to shed 520 posts, of which 270 will be in management, 126 in administration, and the rest will be posts from across the council. In order to protect frontline services, we are currently implementing a corporate transformation programme which will save £20 million and make the council a leaner, more efficient organisation.”