Tagged: Autumn Statement.

£250m: What Durham council must cut by 2019

The North-East’s biggest council expects to have to cut its spending by more than quarter of a billion pounds by 2019, it announced today (Tuesday, January 6).

Financial experts at Durham County Council have been frantically crunching the numbers since Chancellor George Osborne delivered his Autumn Statement and the Government announced its local government funding settlement for 2015-16 in December.

While the budget reductions announced by the Chancellor were widely predicted, the extension of austerity means by 2019 central government grants to Durham will have fallen by 60 per cent since 2011 and the cuts total will have topped £250m.

The Labour-led council also had to cut £18m following the Coalition’s emergency budget in late 2010.

Previously, council leader Simon Henig claimed another Tory-led government would mean “the end of local council services as we recognise them”.

Today (Tuesday, January 6), he said the authority was “largely on track” to deliver the required savings, but added: “There is no doubt that facing these continued cuts we will no longer be able to protect frontline services.”

The council is expected to cut £16.2m and spend £10m of its reserves in the year from April and the budget will be top of the agenda when the cabinet meets in Durham Town Hall next Wednesday (January 11).

A council tax hike of two per cent, the biggest allowed without a local referendum, is expected in the 2015-16 budget, which will be finally agreed in February.

The council’s opposition groups are expected to announce alternative proposals shortly.

Northern town halls are furious that poorer areas are being hit hardest by austerity.

While December’s funding settlement saw councils lose an average 1.8 per cent of their spending power across the country, Durham was down 2.7 per cent, Newcastle by 4.9 per cent and Middlesbrough by 5.6 per cent.

In contrast, Surrey’s spending power grew by 3.1 per cent. North Yorkshire will gain 1.1 per cent.

Durham expects to have cut £136.9m from its spending by April, leaving £88.5m-worth of savings still to find by 2018.

Local government minister Kris Hopkins said the Coalition had been vindicated, because councils were still delivering good quality services with a reduced amount of money.

> There’s Tory thinking for you… and if you continue to cope, they’ll cut funding further because obviously you don’t need it.

If you don’t cope, they’ll cut funding anyway, because you’re in the North and don’t vote Tory, unlike Surrey and North Yorkshire.

Source – Durham Times,  06 Jan 2015

The Chancellor spoke more about Mars than he did about the North East

George Osborne insisted his plans to boost the North were “at the heart” of his Autumn Statement, as he announced plans for a science centre in Newcastle, a centre for advanced manufacturing in Sedgfield and a “Great Exhibition” to celebrate the great art, culture and design of the North.

But his key statement on the nation’s finances also confirmed that local councils face years of further deep cuts.

And the Chancellor’s big surprise, changes to Stamp Duty leading to lower bills for many buyers, will have limited impact on the North East because low property prices in the region mean many home buyers don’t pay the duty anyway.

The Autumn Statement also confirmed that outdated Pacer trains still in use on some routes in the North East will be replaced.

Mr Osborne told the Commons that his goal was to create “a more balanced national economy” and that meant creating a northern powerhouse “as a complement to the strength of our capital city, where we bring together our great cities of the North.”

He announced £20m for a Ageing Science centre in Newcastle, to “back the brilliant work on ageing being conducted at Newcastle University”.

There was also £28m for a world-class research and development centre, to be called the National Formulation Centre, that will specialise in the development of products such as medicines and chemicals, based in Sedgefield.

And documents published by the Treasury also revealed plans for a Great Exhibition in the north.

But local authorities face at least five more years of further dramatic cuts in spending, the Autumn Statement confirmed. Funding from the Treasury for local services is to be cut by more than a fifth by 2019-20.

The figures are included in forecasts published by the Office for Budget Responsibility, the official Treasury watchdog, as part of the statement. It predicted that the main grant provided to local councils will fall from £60.3bn in 2014-15 to £50.5bn in 2019-20.

Mr Osborne insisted: “I do not hide from the House that in the coming years there are going to have to be very substantial savings in public spending.”

This would mean cuts of £13.6bn in 2015-16, as previously announced, and “two further years where decisions on this scale will be required”.

He added: “We’re going to have to go on controlling spending after those years if we want to have a surplus and keep it.”

Another key announcement was a change to stamp duty, previously charged on homes costing more than £125,000.

Buyers eligible for the tax paid one per cent or more of the purchase price. In future, stamp duty will only be paid on the portion of the price which is above the threshold, leading to significant reductions for some properties.

However, an analysis of house prices shows that average prices in the North East are below the £125,000 threshold anyway, which means many buyers will not be affected as they pay no stamp duty.

Average house prices are £120,545 in Newcastle, £124,338 in North Tyneside, £123,766 in Northumberland, £99,837 in South Tyneside and £85,438 in Sunderland.

Nonetheless, buyers of more expensive homes will make savings as long as the property is worth less than £937,000.

Responding to questions from Conservative MP Guy Opperman, MP for Hexham, and Labour Sedgefield MP Phil Wilson, the Chancellor also said there would be help for airports in the North if they were hit by a potential cut in air passenger duty in Scotland, following the announcement that aviation duty will be devolved to the Scottish government.

Responding to the statement, Newcastle East MP Nick Brown pointed out that the Chancellor had announced Britain was awarded the lead role in the next international effort to explore the planet of Mars, adding:

“The Chancellor spoke more about Mars than he did about the North East of England. His Northern Powerhouse is located over 100 miles to the South of Tyne and Wear.

“His statement contained no commitment to any type of workable regional policy in the context of further Scottish Devolution. This is grotesquely one-sided. Even his stamp duty changes were focussed on London and the South East.”

But Liberal Democrat MP Sir Alan Beith, who represents Berwick, said:

“The Autumn Statement sticks to our strategy to deal with the deficit, enabling us to release funds for key Liberal Democrat priorities that bring fairness and a stronger economy.”

Source –  Newcastle Journal,  03 Dec 2014

Autumn Statement: Greens Slam Osborne’s ‘Ideological Commitment To Austerity’

The Young Greens have heavily criticised the government’s “ideological commitment to austerity”, following Chancellor George Osborne’s Autumn Statement.

George Osborne renewed the government’s commitment to control welfare spending by “freezing Universal Credit work allowances for a further year, cutting tax credits when overpayments are certain, and ending unemployment benefits for migrants with no prospect of work.”

The Chancellor also reiterated David Cameron’s pledge to freeze working-age benefits for 2 years, if the Tories win a majority in the next general election.

Georgia Elander, of the Young Greens’ National Committee, said:

“It’s clear that austerity isn’t working for anyone. The government borrowing forecast for this year has been raised from almost £87bn to £91.3bn, and Danny Alexander has attributed this to falling tax receipts due to people being in lower-paid jobs.

“Meanwhile, young people across the country are struggling to get by on low wages and zero-hour contracts, seeing their benefits stripped away, and being forced into workfare in order to claim any welfare at all.

“This isn’t good for the economy, young people, or the rest of the country. George Osborne’s dogged insistence on pursuing the spending cuts and deficit reduction policies of the last five years, despite their clear failure, illustrates this government’s dangerous ideological commitment to austerity.

“Osborne’s continued refusal, too, to raise taxes on the wealthiest in society shows once again that this government operates for the benefit not of the many but of the wealthy few.”

She added:

The Green Party would implement a wealth tax on the top 1% and a financial transaction tax, to make sure that it is the richest individuals and corporations and not the poorest who contribute the most to funding vital public services.”

The Young Greens say austerity measures are also having a wider impact on young people’s mental health, with low wages, unemployment and welfare cuts leading to an increase in stress, depression and suicide.

They welcomed the government’s pledge to invest £150 million in tackling mental health problems, particularly for children who suffer from self harm and eating disorders, but added:

“Mental health provision in this country is grossly underfunded, and while this funding pledge is a step in the right direction, much more needs to be done.

“We need to improve access to mental health services, and work to remove the stigma around mental health, so that children and young people with depression and other mental health problems can be diagnosed and treated before they resort to self-injury.”

What about child poverty?

Responding to today’s Autumn Statement, Alison Garnham, Chief Executive of Child Poverty Action Group, said:

It’s striking that the only giveaway for children was for families who can afford to fly them abroad on holiday. For millions more children, today’s Autumn Statement is about staying the course for poverty rather than prosperity.

“The Chancellor once again failed to mention child poverty – it’s now two years since an Autumn Statement or a Budget mentioned child poverty, despite the Government’s binding legal obligation to reduce it and IFS projections warning that the Government is on course to rapidly increase, not reduce, child poverty.

“By cutting Universal Credit once again, the Chancellor is in very real danger of torpedoing Iain Duncan Smith’s flagship policy. Freezing the work allowance will harm work incentives and hit low paid families hard. Two thirds of poor children live in working families; we should be redistributing help towards them, not away from them.”

Britain needs a pay rise

Responding to the Autumn Statement, TUC General Secretary Frances O’Grady said:

“The living standards crisis has wrecked the Chancellor’s strategy.

“He has failed his deficit reduction pledge as low-paid Britain is paying much less tax than expected. And businesses won’t find the customers they need if consumers do not have money in their pockets.

“Nothing in today’s Autumn Statement will give Britain a pay rise, and Conservative plans to effectively outlaw strikes will help make Britain permanently low-paid. Wrapping up last year’s infrastructure presents and giving them to us again will not give the economy the extra boost it now needs.

“Today should have seen policies for growth, but the Chancellor has boxed himself in with a rigid and artificial deficit reduction timetable. If he continues in office that will mean eye-watering spending cuts straight after the election. These would knock the recovery sideways, deter investment and lead to great damage to our social fabric.

“The way to heal the public finances is to build a strong growing economy in which successful companies and well-paid workers pay fair taxes. Pre-election giveaways today under this Chancellor will lead to even bigger spending cuts now that the global economy looks increasingly fragile.

“This is economic self-harm, threatening a vicious circle of further decline. That would be Groundhog Day all over again – the same mistake that the coalition made in its first two years.”

Source –  Welfare Weekly,  03 Dec 2014

http://www.welfareweekly.com/autumn-statement-greens-slam-osbornes-ideological-commitment-austerity/