Lewisham Council fears £87m of cuts

Reader Tabitha has rightly prodded us to report the Council's statement on the scale of the spending cuts it needs to make over the next four years, following the announcement of the provisional Local Government Finance Settlement in December. The Council says it will need to find £87m and has until January 17th 2010 to respond to the Government's proposal. We're guessing that they will be against it.


Here's the statement:

Lewisham Council is absorbing the true scale of the spending cuts it is faced with following the Government’s announcement of the money it proposes to give local councils over the next two years.

The Council had been planning to have to reduce its budget by £60million over the next three years.

Following the recent announcement, it now seems it will be forced to find a massive £87million over the coming four years. Next year alone it is facing a reduction of £33million.

“These figures add up to the greatest financial challenge the Council has ever had to face,” said Mayor of Lewisham Sir Steve Bullock.

“So far we have been able to meet most of our savings through efficiencies and have protected services to the most vulnerable.But we had been expecting to reduce our budget by around £20 million next year – now we know we have to increase that amount by a further £13 million.

“We will continue to do what we can to reduce the Council’s costs, like, for example, with our innovative IT procurement deal done in partnership with Bromley Council that is saving us around £1.5 million a year.

I will also continue to prioritise services for vulnerable adults and children and young people. But we will, inevitably, have to shrink the size and scope of the Council and seriously consider what services we continue to provide and how we provide them.”

It is still not clear how all the grants to the Council from central Government will be affected.

29 comments:

Anonymous said...

There are a couple of points it would be useful for the Council to clarify:

1) it would be helpful for residents to see an exemplification of the planning assumption of the reductions over four years as the Government has only announced the provisional figures for 11/12, 12/13; and,

2) how have the Council arrived at the 11/12 reduction of -£33m? The figures published by the Government show a reduction in spending power of -£21.8m in 11/12.

Anonymous said...

".... with our innovative IT procurement deal done in partnership with Bromley Council that is saving us around £1.5 million a year."

The total savings was £2m, if the council is saving 3 times as much as Bromley were the council previously paying way over the odds?

Anonymous said...

why dont london councils merge?

Brockley Nick said...

@Anon - http://brockleycentral.blogspot.com/2010/10/council-and-super-council.html

Matt-Z said...

In his early days as Mayor Ken wanted to merge all the boroughs and halve their number. Lewisham and Greenwich were to join forces. Would be hilarious if that plan returned no that Greenwhich is to be a Royal Borough. Royal Lewisham sounds great.

Anonymous said...

They could merge Southwark, Lewisham and Greenwich...

The Royal Borough of Southwark, Lewisham and Greenwich.

Anonymous said...

I am baffled as to how the council will manage this drastic cut.

max said...

If the first anonymous is correct then it means that the Council is cooking up the figures for politically motivated purposes.
And that's bad.

Anonymous said...

@max (1) The consultation clearly states: 'Consultation - 2011-12 Settlement and Provisional 2012-13 Settlement'

(2) see column E line 22 of this spreadsheet

http://www.local.communities.gov.uk/finance/1112/spannexb1.xls

I think it is unlikely the Council has simply plucked the figures from thin air. What isn't clear to residents is how they reached the figures they have. What's clear is the available data suggests they have made an accounting error.

Danja said...

The settlement for those 2 years included a transitional grant to LAs which would otherwise have to cut more than 8.9% pa. Assuming that LBC falls within that, it would be a sensible planning assumption to take the subsequent years as something like 12/13 minus the transitional grant which will have ceased. Could be something like that?

Clearly they are going to have to plan on the basis of some sort of future budget assumptions beyond a 2 year horizon which is pretty short for such an unwieldy beast.

Danja said...

The difference could be something like assumptions about cuts to cap-ex (as opposed to revenue) funding, anon? Looks like those have yet to be determined.

I agree some more transparency would be a good thing.

Anonymous said...

@danja good point. I'd not thought the figure might include capital.

LBC will not get the transition grant so years 3 & 4 remain murky...

Paolo said...

Does anyone know if Lewisham have poublished all details of their expenditure on items above £500 - as per the requirement from Eric Pickles?

It should make for some interesting reading...

max said...

A couple of days ago Lewisham Council was still among those not complying with the request.

Lou Baker said...

Of course £87m savings sounds dramatic.

However it's over 4 years so the actual saving is less than £22m per year.

But even that means nothing unless you know the impact on individuals.

In the last census Lewisham's population was a tad under a quarter of a million.

£22m of savings divided by a quarter of a million people equals £88 pounds per person per year, or 25p each per day.

That puts these huge cuts in perspective - not huge at all.

And we could all help reduce the impact even further by reducing the pressure we put on council services.

ie) recycle more, don't let your dog crap on the pavement, pay your council tax on time, don't object to every single planning application (that's you conservation groups) etc etc etc.

max said...

Actually recycling more may put even more pressure on the budget, for Lewisham Council the easy option is to chuck it all in the SELCHP.
And how would planning applications have any impact on the Council's budget?

Eric pickles said...

Good to see Lou has such an iron grip on financial matters. So all this unpleasantness can be avoided for 25p a day! Brilliant, what's the problem? I'm up for it.

Lou Baker said...

@Eric

I am merely putting the cuts in perspective. Out of a total spend of £780m, Lewisham is expected to save £22m. 2.8%.

The council spend is around £3120 per person. Of that it needs to save an average of £88 each.

That's what has people screaming blue murder.

The private sector has made much deeper cuts over the last few years without significant job losses and with minimal impact on customers. There's no reason the public sector shouldn't reform too. And if we lose unnecessary bureaucrats in the process - good. There are way too many people doing non-jobs at taxpayers' expense.

Anonymous said...

"The private sector has made much deeper cuts over the last few years without significant job losses and with minimal impact on customers" really? No compulsory redundancies in the private sector? No shops closed down? None? Nill? Nada? The banks sacked no one? No one lost money due to the heroes of the free market universe opersting with few restrictions? Are you mental or just poorly informed?

Anonymous said...

Anon,
Where does Lou state there have been no closures or job losses?

The financial services and advertising industries are pretty quick and brutal when it comes cutting any slack.

In the public sector workers seems to think taxpayers owe them a job for life with an unsubstainble pot of gold (pension) at the end of it.

It is not surprising that most of the left/socialist individuals who want to rule with a 'them and us' attitude tend to work in the cocooned unrealistic public sector.

Mb said...

Still this simplistic comparison. I deal with Atkins and Costain daily, I'm co-located in their project office. They are profitable companies, but do they waste? Are there inefficiencies? Do they have people doing jobs that no one is quiet sure what? Do they waste clients money? Of course they do as do many organisations public and private. The argument needs to be a bit more sophisticated, after all the massive private investment houses have devalued our pension schemes by reckless investment, not so very different from wasting tax payers money.

Brockley Nick said...

"The private sector has made much deeper cuts over the last few years without significant job losses."

That is a ridiculous thing to say. There has been a huge rise in unemployment in the UK (eg: nearly 300,000 job losses in Q1 2009), and that has primarily been from the private sector.

There is an argument for some Schumpeterian creative destruction in the public sector, but you don't help your arguments by saying things that are blatantly untrue, to the point that you sound like a fantasist.

The kind of savings that need to be found can only be achieved with significant job losses involved.

max said...

By the way, many of these redundancies are early retirements, and each of them means one more pensioner drawing a pension and one less worker paying contributions.

Paolo said...

Getting back onto the topic of Lewisham's cuts, is Lou correct that the budget is 780 million and therefore the cuts represent a 2.8% reduction in spending?

If so, this does not seem drastic or even excessive. Once Lewisham publish details of all their spending, I'd be very suprised if even the most ardent supporter of big government couldn't identify 2.8% of fat that can be trimmed without affecting front-line services

Brockley Nick said...

I haven't looked in to his sums but there appear to be quite a few people on here who understand a spreadsheet and maybe able to clarify.

I'll wager the situation isn't quite as simple as Lou makes it sound...

taxpaying public sector employee said...

Anon - 9 January 2011 11:16 said
'In the public sector workers seems to think taxpayers owe them a job for life'
Yes, of course ALL public sector workers think this and since when are public sector workers not taxpayers? It's not a 'them and us' situation - and the constant comparisons are pointless. Yes, the public sector pension may be good, but you're never going to get a big fat bonus (or even a small and skinny one), you also won't get performance related pay, christmas parties, freebies of any kind etc etc etc.
Also certain boroughs (such as Lewisham) suffer more due to public sector cuts because a large number of people who live in Lewisham also work for the public sector (not nec. Lewisham) therefore increasing the demand on council services when they are made redundant...

Anonymous said...

Lewisham 4th biggest spender on office refurbs
http://www.bbc.co.uk/news/uk-england-london-12151924

max said...

Ok, interesting but doesn't say much really. There are bumper years in these kind of expenditures.

I think that if you want to judge what one spends in refurbishments you have to look at a bigger timescale to include the lifetime of each investment, something like 10 or 15 years.

max said...

Ironic though that the Taxpayers' alliance has something to say about the costs of toilets' refurbishments but nothing against the tax-funded BBC wasting our money in broacasting the dumbed down banalities uttered by the taxpayers' alliance on a research that says nothing at all.

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