Ministers have accused North East councils of sitting on unused land and property which they could sell to protect services.
But local authorities facing massive spending cuts of more than £240 million ridiculed the claims – and pointed out that there are strict rules preventing them from selling the land to fund services.
And the comments provoked an angry reaction from Labour, who accused the Government of imposing higher cuts on urban councils in the North East than wealthy parts of the country.
Ministers launched the attack on councils which are reducing services and raising council tax, claiming that they had nobody to blame but themselves.
The Association of North East Councils has warned that crucial services such as care for vulnerable children are in danger of collapse as massive cuts in council funding wipe almost quarter of a billion pounds off budgets across the North East this year.
It says the true impact of Government spending cuts has been hidden because authorities have succeeded in “raiding” other services and diverting funds where they are needed most – but they have reached a point where this just won’t be possible any more.
But Local Government Secretary Eric Pickles issued a statement claiming councils have large sources of untapped revenue including money held in reserve, assets such as property or land, and council tax arrears which have gone uncollected.
And his department published a league table highlighting the worst offenders, with County Durham named as one of the authorities with high levels of surplus assets. The authority is sitting on assets worth £62 million, according to the Department for Communities and Local Government (DCLG).
The department also named Gateshead as an authority with high levels of surplus assets, worth £49 million.
Government figures also showed that Northumberland council had reserves of £96.4 million while Newcastle-upon-Tyne had reserves of £78.9 million.
Mr Pickles said:
“Reserves have rocketed up in the past few years and councils could be making better use of assets to keep taxes down and protect frontline services, while at the same time doing more to stop the billions they are losing to fraud and collecting more Council Tax arrears.”
But the claims were dismissed by Councillor Alan Napier, Deputy Leader of Durham County Council, who said:
“We do have surplus assets of £62 million which includes both land and buildings, including former school sites.
“Most of these sites are either being sold, up for sale or in the process of being put up for sale. When sold, our hands are tied as to what we can spend the money on as the receipts are ring-fenced and can only be spent on new capital items such as buildings, vehicles or infrastructure.
“I would have expected Mr Pickles to know that receipts from surplus assets cannot be used to reduce council tax or protect front line services ”
Gateshead Council’s strategic director of corporate services and governance, Mike Barker, said
“£41m illion of assets which have been classed as ‘surplus to requirements’ actually relate to land which has already been contractually committed towards building much needed, good quality, affordable housing across the borough.
“The development of this land is already underway on sites at Deckham, Bensham and Saltwell, and Birtley. Over the next 15 years, the joint venture partnership between ourselves, Galliford Try and Home Group will build thousands of new homes on 19 different sites across Gateshead; bringing jobs, investment, and regeneration to many areas.”
The devastating impact of Government cuts on council services was confirmed in a report by the National Audit Office late last year, which warned that authorities were reaching a point where they couldn’t cope.
“While local authorities have maintained financial resilience overall, some – particularly among metropolitan districts – are now showing persistent signs of financial stress, such as unplanned in-year reductions in service spend.
“Looking to the future, there is increased uncertainty about how local authorities can manage further possible falls in income.”
Source – Newcastle Evening Chronicle, 11 Feb 2015
Children in care will be the next victims of savage cuts to local council funding, North-East leaders warned yesterday.
They raised the alarm over a planned 17 per cent reduction in grants for children’s services buried in the 2015/16 funding settlement – even bigger than the overall cuts.
And they warned it would punish the North-East hardest, as the region has the joint highest number of children in care, after a sharp rise over the last five years.
For every 10,000 youngsters in the region, 81 are in local authority accommodation or the subject of care orders – up from 61 per 1,000 as recently as 2009.
It puts the North-East on a par with the North-West, while the figures are much lower in Yorkshire (65), London (54), the South-East (48) and elsewhere.
In Durham (91 per 1,000) and Newcastle (101 per 1,000) the figures are even higher, according to the Association of North-East Councils (ANEC).
Speaking at Westminster, Simon Henig, Durham’s Labour leader and ANEC’s chairman, said:
“We have seen a big increase in pressures in this area – and the amount of Government funding has been cut significantly – but local authorities have filled the gap, by raiding money from elsewhere.
The warning came as ANEC – in partnership with major urban authorities – launched a fresh blast at the “unfair” 2015-16 funding settlement.
They ridiculed the Government’s claim of an average 1.8 per cent cut in funding, arguing the true figure was close to ten per cent in the North-East – a total grant reduction of around £240m.
“This level of reduction has dramatic and damaging consequences for councils’ ability to fund statutory services such as children’s and adult social care.”
And Kevan Jones, the North Durham Labour MP, said:
“This Government has directed cash to areas not in the dire need that we are in the North-East.”
However, there were signs of future tensions with Labour, which will not halt next year’s cuts if it wins May’s general election and has made only vague promises of a “fairer formula”.
ANEC warned such a scheme “potentially allocates extra resources to wealthy and business-rich parts of the London and South-East”.
Source – Northern Echo, 14 Jan 2015
Council chiefs and teaching unions have hit out after new figures revealed that the North East has slashed its local authority budgets more sharply than anywhere in England.
An analysis by the Chartered Institute of Public Finance and Accountancy found the amount spent on services in this region is forecast to decrease by 5% this year – more than double the amount in some other areas.
But the Government says it believes that residents are “happier than ever” with their council services – and if authorities want more money they should concentrate on collecting more council tax and make more of the empty properties they own.
> Hang on – the Government says it believes that residents are “happier than ever” with their council services.
Have I slipped into a parallel universe or something ? Or does the governmenmt spokesperson come from one ?
Much of the North East’s fall is due to a 10% reduction in spending on education, and a 9.3% drop in the budget for “environmental” services such as bin collections.
The figures also show the North East has seen a below average increase in the amount spent on children’s social care.
South Tyneside Council leader Iain Malcolm said: “The findings from Cipfa simply confirms what local authority leaders have been saying since 2010 – that local government is being asked to bear the brunt of the Government’s fiscal strategy for reducing the national deficit and that the North East is hit disproportionally harder than other areas in England.”
“Even with careful budgetary control, efficiency savings and finding new innovative ways to deliver our services, this inevitably means services do suffer.
“The Government claim they are devolving powers to local government and that their localism agenda is about giving local communities real choices in how services are funded – but its a sham.
“The real government agenda is a deliberate ploy to shift the blame for cuts in public services from themselves to local councils.”
Vince Allen, principal officer for the northern region at the National Union of Teachers said Cipfa’s findings were “extremely unwelcome” and that “its clear from the figures that education is going to take a considerable knock.”
“The amount available for community spending in the North East, particularly on education is slumping, in real terms, towards a level equivalent to that in 2005 – that’s how big a step backwards we are taking.
“But in the short term other than campaigning against the cuts that the Government are making I don’t know there is anything we can do to change this around.
“We just have to hope that a Government coming to power would not have the same agenda in terms of destroying local democracy and communities by continuing to centralise the money available for spending.”
> Dream on… I think most of us don’t expect an incoming Labour government to be anything but more of the same. All the main parties love austerity – not least because it doesn’t touch them personally.
Across the country the lowest average fall in spending is forecast in the North West, with budgets just 1.8% down.
Rob Whiteman, Cipfa’s chief executive said that to avoid councils experience serious financial trouble in the near future “we must recognise that some councils have been hit harder than others and will need more support.”
“We are now starting to see some councils face real and immediate financial pressures,” he said.
Steven Mason, lead executive director at Northumberland County Council said he hoped the analysis might encourage the Government to provide councils with more money in the future.
“Northumberland welcome the Cipfa analysis which supports the views put forward by a number of Councils including Northumberland and the Association of North East Councils.
“We hope the Department of Communities and Local Government considers the analysis by such a credible independent body with a view to more equitable future financial settlements across England.”
Source – Newcastle Journal, 09 Aug 2014
High speed rail will slow down services from the North East to Scotland and reduce London journeys by just 11 minutes, the region is today warned.
A series of route documents have shown how the North will be increasingly isolated if the £42bn railway project is completed.
After a trickle of concerns at the plans for a new railway emerged over the last year, the final picture increasingly shows a high speed network in which Newcastle actually loses services.
Consultation documents put out by HS2 and Network Rail show:
- From 2033, Newcastle’s direct trains to and from Aberdeen, Edinburgh and Glasgow are replaced by a stopping service calling at small towns throughout the line, hugely adding to journey times;
- All London to Scotland services will go up the West Coast;
- High speed rail will replace, not add, to all existing East Coast London to Newcastle routes in order to free up capacity south of York;
- Under High speed plans, Durham would lose out on direct links, while Darlington moves from two trains an hour to London to one train;
- Total journey saving times to London when Durham’s Hitachi trains are built are just 11 minutes.
Under Government plans, the high speed railway will go from London to Birmingham, heading in a Y-shape to Leeds and Manchester by 2033. The fast trains then switch down to regular speeds and travel either to Newcastle or up the west coast to Scotland, with Newcastle now becoming simply the end of a branch line.
Gateshead MP Ian Mearns, who sits on the House of Commons group overseeing the London to Birmingham high speed work, said he had warned his own party’s front bench team that something will have to change if the North East is not to lose out.
He told The Journal: “We have some of the worst rail connections already. As I have said to our front bench, the North East first of all needs to be recompensed for the disruption we will face as work goes on from York to London.
“But also, this new line will build economic powerhouses in West Yorkshire and Greater Manchester, while whatever happens in Scotland it is going to be given more economic powers.
“The North East risks being trapped in between these economic honeytraps, with slower connections to Scotland and losing some services to London. How will we sell ourselves to investors after High Speed 2?”
Other Labour MPs hitting out at the high speed plans include Durham’s Kevan Jones and Newcastle’s Nick Brown. They are at odds with Labour councils such as Newcastle and the Association of North East Councils, which have campaigned for new route despite the concerns.
Many of the damaging changes to North East services come as a result of a lack of investment in the East Coast Main Line north of York.
The four-lane line railway network changes to a two-lane line between Northallerton up to Newcastle. And with that system already leading to congestion on a one-in one-out basis, the new high speed route would only be able to replace, rather than add to, existing services.
In its consultation document, Network Rail admits that High Speed duplicates services up the East Coast, and as such, it wants to “reduce the quantum of long distance services,” axing long distance trains and replace them with slower, stopping services.
South of York there is increased extra capacity as all trains from Newcastle and Scotland are sent past Birmingham to Euston, with six trains an hour from the North moved off the existing system.
The system would mean there is an end to services from London to Edinburgh via Newcastle, documents show.
Instead a new stopping services would start at Newcastle and call at Cramlington, Morpeth, Alnmouth, Berwick, Dunbar, Drem, Prestonpans and Edinburgh Waverley.
And the same capacity constraints that force all these changes mean that from 2019, transport officials have decided the only way to increase services on the Transpennine service is to reduce one train an hour on the Birmingham via Leeds Cross Country routes.
Source – Newcastle Journal 06 May 2014
Parts of the North East’s cultural heritage could be put at risk as the Government seeks to end its responsibility for historic sites.
Ministers are part-way through plans to reform English Heritage and create a charitable arm responsible for the National Heritage Collection.
The Government hopes that an £80m cash injection will mean the quango no longer needs taxpayer support.
But concerns have now emerged that the moves will see properties put at risk as the reformed English Heritage struggles to pay for all its assets.
In the North East, English Heritage is responsible for key tourism attractions such as BelsayHall, Lindisfarne Priory, Warkworth Castle and Dunstanburgh Castle.
As well as those flagship sites there are many others which, while contributing to the overall worth of region’s heritage, do not individually draw in large numbers of visitors.
Culture ministers have been warned of the potential downside of their reforms in a joint response by the region’s 12 local authorities.
The Association of North East Councils has said it wants to ensure the changes do not create a situation in which only the sites which generate the most revenue are protected, instead of the entire collection.
And former regional minister Nick Brown has added to the warnings. He said: “The Government’s proposal has two obvious flaws. The loss of expertise will be damaging in the long run because the advice from a well informed independent authority will no longer be there.
“Secondly, our country’s heritage should not be reduced to a historically themed version of Disneyland. It should be preserved, treasured and valued for present and future generations.”
Urging caution of the unknown costs involved, the Association said: “This is an ambitious plan, with yet another organisation competing for the same sources of commercial and philanthropic funding as similar organisations.”
The councils said: “In the North East there is concern over the protection of historic buildings that may not necessarily generate large amounts of income and instead rely on a subsidy, yet are nonetheless key to the collection and bring in wider economic and social benefits to the local community in terms of tourism.”
The Association added: “Similarly, it is of concern that some sites may require such a level of investment to make them more popular and revenue generating, that the charity may seek to divest itself of responsibility for them. We would not wish to see detriment to any part of the collection solely on the grounds of financial viability and fully expect the new charity to demonstrate that it is the sector lead in conserving the Heritage Collection.”
Already across the North East there are nearly 300 properties on English Heritages At Risk register, properties which for decades have struggled to attract sufficient funding.
Grant Davey, leader of Northumberland County Council said: “There’s a worrying lack of detail in this consultation which compounds the feeling that this is just another attempt by the coalition to scale back the state, this time in the area of heritage.
“Northumberland has a rich and varied tapestry which tell the story of this county over the ages and it is a worry that the Government simply wants to open up English Heritage to the market. The Government needs to make the case for their proposed changes and I’m afraid I’m not convinced.”
Former Newcastle Council leader Lord Beecham, a one-time regional member of English Heritage, said there were concerns that the changes were akin to “privatising out heritage.”
A DCMS spokesman: “The Government’s plans to create a new charity, to be called English Heritage, to manage the National Heritage Collection will not involve disposing of or downgrading any buildings or sites. Quite the opposite, in fact.
“The £80m investment will be used to enhance and improve the Collection, helping to secure its future for generations to come.”
> Of course it’s now generally forgotten that in it’s early days our unelected coalition government made a determined attempt to sell off the nation’s woodland into private hands.
Source – Newcastle Journal 18 Feb 2014
Months of pressuring the Government to think again on council spending cuts worth more than £210m a year have seen ministers hand out just £143,000 extra for the North East.
Across the region councils have being setting out where the axe will fall, with the next three years likely to see the cuts total rising to more than £800m.
But after months of high level delegations taking part in desperate Whitehall lobbying missions, the coalition Government has increased the budget available to the region’s councils and fire brigade by an average of just £20,000 each.
The total amount for the region’s seven councils and Tyne and Wear Fire and Rescue Service increased from £1,081,128 to £1,081,271, a rise of just 0.013%.
The final spending handout for 2014/15 will mean there is no way for councils to drop plans to axe Sure Start centres, make hundreds of redundancies or force up parking charges.
And plans to close down three fire stations will certainly go ahead after the Government announced the final funding settlement for Tyne and Wear Fire and Rescue will see an increase of just £4,000, despite pleas for extra cash.
The North East has been lobbying against the perceived “unfairness” of the cuts since the coalition began axing budgets in 2010. Those efforts stepped up a gear in the last few months after yet more spending reductions for local government were announced in the autumn.
Included in the lobbying effort was work by the Association of North East Councils, which met with local government minister Brandon Lewis to put the case for a fairer funding settlement.
The extra £143,000 handed over as a result is considerably less than the money handed over each year by the region’s seven local authorities to the Association of North East Councils, with Northumberland alone having handed over more than £98,000 this financial year.
Last night former Newcastle Council leader Lord Beecham said it was clear the coalition was not interested in fairly funding local government in the North.
The peer said: “The Government has completely failed to redress the grossly unfair distribution of grant which hits Newcastle and other less-well off areas and benefits the more affluent.
“The extra we receive in the final settlement amounts to less than 25p per household per year and means that there is no protection from the tidal wave of cuts to services which the Government has launched.”
And Northumberland’s Labour council leader Grant Davey said: “It’s disappointing that, yet again, the coalition have failed to listen to Northumberland and have shaved a minute £18,000 from cuts to services worth £32.5m this year.
“Many would say such a derisory figure is an insult to the residents of the county but it shows how little David Cameron and Nick Clegg think of the North East.
“It’s time our coalition MPs started to stand up for their county rather than sit quiet as Cameron and Clegg ravish the services their constituents rely on.”
Northumberland County Council is the only one in the region to put up council tax next year, rising by 1.99%, the maximum allowed without putting the increase to a local referendum.
The Government has pointed to a grant to freeze council tax in most other areas as one way in which many households will benefit from its funding settlement.
Announcing the final settlement, Mr Lewis said: “This settlement marks the second year of local business rates retention and we have again tried to be fair to all parts of the country whether north, south, rural or urban.
“Given the local flexibilities and freedoms that we have put in place, local councils should now work to support local enterprise, building more homes and backing local jobs, so that they can then invest the rewards of growth in local services and in lower taxes.”
Source – Newcastle Journal 17 Feb 2014
Unfair funding cuts which hit poorest areas hardest would come to an end under Labour – but councils would still be forced to make savings, shadow ministers have warned.
Shadow local government minister Andy Sawford said Labour would draw up a new funding formula to ensure towns and cities across the North East were no longer targeted for funding cuts.
It follows warnings from the region’s MPs and council leaders that vital services such as social care, policing and fire brigades are suffering because the region is losing money while wealthy areas in the south are actually gaining cash.
But Mr Sawford also warned that a Labour Governmentcould only change the way funding was distributed and could not promise an overall increase in local authority funding.
He also revealed that failing private firms running the Work Programme, a Government scheme to provide unemployed people with training and advice about getting a job, faced the sack when their contracts run out in 2016.
> Well, that’s all of them then. But you’ll notice that they aren’t actually going to abolish Work Programme. It’ll still be a failing programme whoever runs it, simply because it refuses to adress the reality of employment and unemployment in the UK today.
Their role could be handed to voluntary organisations or to the public sector, he said.
> Which probably means it’ll end up being handed to the Jobcentres to run. Oh joy…
The Association of North East Councils has warned that cuts in council budgets in the North East amounted to £467 for every household between 2010 and 2016 – compared to just £105 in the South East.
Mr Sawford, also shadow minister for the cities, said: “The commitment we have made is that we are going to review the formula to ensure that local authority grants are based on a proper needs assessment.
“We’ll then get into how we do that at a time where we are not able to reverse the cuts. It’s not going to be possible.
“So it will be a financially tight time for all local authorities around the country.”
> Mr Sawford, also shadow minister for the cities, said: “We’ll tell you that we’re going to look at things, but nothing will change. Did you really think it would, suckers ?”
One authority has warned it is concerned about the effect of Septembers Scottish independence referendum on its finances.
Sunderland City Council said councils in the North East already faced “an un-level playing field” because Scotland was able to raise its own funds and control much of its own spending.
And Scotland was likely to gain even more autonomy even if voters rejected independence.
> So maybe we – closer to Scotland than London – should seriously consider joining an independent Scotland.
In a submission to the Local Government Select Committee, Sunderland called for local authorities to have more independence.
The council said: “It is Sunderland City Council’s consideration that without greater fiscal devolution to and beyond cities and City Regions areas like Sunderland are at risk of being caught between ‘a rock and a hard place’, between an increasing autonomous and confident Scotland and an increasingly prosperous and powerful London and the South East.”
> See previous comment…
Source – Newcastle Journal, 24 Jan 2014
Ministers have been accused of declaring “war” on the North East as MPs and council leaders gathered at Westminster to plan their fight-back against funding cuts.
> Well it’s taken them long enough ! Have they only just noticed what’s been going on under their noses ?
The region’s Labour politicians warned the debate about funding and grants obscured the real impact of cuts, which was worse public services and the prospect of councils running out of money.
Paul Watson, leader of Sunderland Council, said families in the North East would receive poorer police and fire services than those in wealthier parts of the country.
And the region’s politicians accused the Government of quietly scrapping the long-accepted convention that funding was allocated in part on the basis of need – so areas with higher levels of poverty, a higher proportion of older folk a low skills base or other pressing needs were given the cash they needed.
The change means a council like Newcastle is facing budget cuts while those in much wealthier areas are enjoying increases in funding.
The warnings were issued as council leaders delivered a presentation to MPs in a Commons committee room at Westminster, following a meeting with Local Government Minister Brandon Lewis.
> And they all said: “Bugger me, we had no idea this was going on. When did this start, then ?”
GatesheadMP Ian Mearns told the gathering: “There is a war being fought against our communities and it is being inflicted on us in the most ruthless fashion I can remember in my 30 years in politics.”
North Durham MP Kevan Jones added: “This is a war. They know exactly what they are doing. They are diverting money from our areas to areas in the south.”
A presentation produced by the Association of North East Councils (ANEC) warned that cuts in council budgets in the North East amounted to £467 for every household between 2010 and 2016 – compared to just £105 in the South East.
The discrepancy is partly a result of the Government abandoning the principle of funding based on “need”, which traditionally meant some councils received more than others.
A higher proportion of the North East’s population is elderly than the national average. The region also has more adults who need social care and long-term unemployment, as well as more children in care, all of which would traditionally have meant councils received higher funding.
But ANEC estimates that by 2019-20, Newcastle City Council’s spending power per household will be equal to the money available to a council in a wealthy areas such as Wokingham, in Berkshire.
Meanwhile, Newcastle North MP Catherine McKinnell, has revealed that a poll of her constituents shows that more than 90% of respondents expect their standard of living to get worse or stay the same over the next three years.
The survey on her website found that 79% of respondents were concerned by energy bills, 56% by food prices and 39% with the cost of transport.
> So now our Labour representives finally seem to have caught on to what’s going down. Question is, what are they going to actually do about it ?
Source – Newcastle Journal, 16 Jan 2014