What further cuts will mean, Prime Minister

Michael Harris /   November 15, 2015 at 3:47 PM 2,308 views

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According to George Monbiot this week, David Cameron hasn’t the faintest idea how deep his cuts go.

Monbiot reported on leaked correspondence between the Prime Minister and the Conservative leader of Oxfordshire county council (which covers Cameron’s own constituency), Cameron expressed horror at the cuts being made to local services, complained that he is “disappointed” by the council’s proposals to make significant cuts to frontline services, and asked why the county council was not “generat[ing] savings in a more creative manner.” The direct response from leader of Oxfordshire was that they’ve made all of the savings they can to ‘back office functions’ and by selling off land, and now there is nothing left to cut except frontline services.

Back in July, George Osborne asked government departments to ‘model’ two scenarios of 25 per cent and 40 per cent of real-terms savings by 2019/20. With the Government announcing the outcomes of its Comprehensive Spending Review on 25th November, it might be useful to note the predicted consequences of anticipated further cuts to public services according to a fairly random selection of organisations which have submitted responses to the spending review. Of course, the Treasury already has these – but perhaps they might pass them onto the Prime Minister?

You might, like the Prime Minister, suspect that such submissions are largely self-serving calls for more money (or at least, no more cuts), and that public services just need to be ‘more creative’. Actually, what comes through the submissions I’ve read through is the opposite. Many submissions recognise the Government’s desire to save money, but make the argument that targeted investments in new types of services and approaches could both save money and improve outcomes from services. However, this does not seem to be a government with the mentality to listen to such arguments – as 25th November will probably confirm.

At least they won’t be able to say they weren’t warned.

Health

According to the King’s Fund:

  • All parts of the NHS are under growing financial pressure, with even the best-run hospitals running deficits.
  • The Government’s commitment to increase the NHS budget is the absolute minimum requirement to maintain standards of care, and will not pay for new commitments such as seven day services.
  • On current plans, the proportion of GDP spent on on healthcare in 2020/21 will fall back to levels last seen in 2005/6, underlining the seriousness of the situation facing the health and care system.
  • Further cuts to the public health budget would be a false economy and undermine government commitments on prevention.
  • If the social care system is not protected from further cuts in local government budgets, access to care will deteriorate further and quality of care will be compromised.

Social care and support

According to Adass:

  • The social care sector is in danger of a deepening crisis. There is growing demand (due to increasing life expectancy and an ageing population) and people’s needs are becoming more complex. However, councils will be forced to make service reductions of £420 million to people needing that care and support and their carers.
  • Fewer people are receiving state funded support, including at least 400,000 fewer disabled and older people. The increasing numbers of people with complex needs (including the need for safeguarding from abuse and neglect) are often very isolated.
  • The care market is becoming more fragile and essential supply is being compromised. A majority (56 per cent) of directors of adult social services report that providers are facing financial difficulties already. Insufficient social care will put people’s health, safety and well being at serious risk and place increasing pressure on the NHS.
  • The ‘National Living Wage’ could add at least an extra £1 billion to council social care costs by 2020 to pay the increased wages for residential and homecare staff.

Charities and social enterprises

According to ACEVO:

  • 86 per cent of charity leaders expect increased demand for their services over the next year, but 77 per cent believe they currently do not have capacity to absorb any increases in demand.
  • 35 per cent of charities report that their reserves are either dwindling fast or that they expect to dip into them in the near future.

Carers

According to Carers Trust UK:

  • Carers are reaching breaking point. The number of adults in need of care is rising every year, at the same time as funding for social care has witnessed an 8.7 per cent real-terms cut between 2010/11 and 2014/15.
  • This has severely affected the quality and quantity of support services local authorities are able to provide to those in need with the result being that the number of people accessing social care services fell 25 per cent over the course of the last parliament.
  • This is having a significant impact on the wellbeing of carers. 82 per cent of carers say that their caring role is having a negative impact on their health. If carers’ health continues to deteriorate it will not only have a distressing impact on their wellbeing but on the safety of the person they care for and the security of the health system, with over-stretched local authorities called upon to pick up caring responsibilities.
  • The gap in adult and children’s social care funding is predicted to reach £4.3 billion by 2020/12.

Local government

According to the Local Government Association:

  • Due to demographic changes, councils already face a funding shortfall of £9.5 billion by 2019/20. However, councils will have to deal with £3.6 billion of additional demand pressures by 2019/20. Other Government policies announced either in the Summer 2015 Budget or previously (including to housing, welfare, adult social care, children’s’ services, public health, and pensions) will add another £6.3 billion of costs by 2019/20.
  • Councils and housing associations don’t have the capacity to deliver the levels of house building needed. Falls in affordable housing could lead more tenants into the more expensive private rented sector, reducing their capacity to pursue home ownership. It also risks creating recruitment challenges for employers in areas of higher house prices, particularly for vacancies on lower wages.

Housing

According to the National Housing Federation:

  • The policies the Government has set out since the General Election, including a reduction in rents for tenants in affordable housing and the extension of the Right to Buy discounts to all housing association tenants, make developing new homes significantly more challenging.
  • Rent reduction alone will result in a loss of almost £3.85 billion in rental income over the four year period, vital revenue which could have been used to develop more homes.
  • As the country has built fewer and fewer homes, including those for social rent, people have had to be in ever greater need to be housed in a home for sub-market rent. This has a knock on effect on the housing benefit bill and housing management. The housing benefit bill is rising and increasing numbers of claimants are working people living in unaffordable privately rented homes.
  • The combined impacts of these policies will result in a halving of housing association development activity, and a loss of more than £3.85 billion in rental income over four years.

Homelessness

According to Homeless Link:

  • 40 per cent of local authorities report they have inadequate tools to prevent homelessness in their area. As disinvestment continues, all measures of homelessness show rising demand and need. Statutory homeless acceptances have increased by 41 per cent since 2010. Nationally, rough sleeping has increased by 55 per cent since 2010. In London rough sleeping has increased by 39 per cent.
  • Losing services, capacity and expertise from homelessness services will have a major negative impact, with the result that homelessness and rough sleeping will increase, leading to higher costs to government in the long term.

Schools

According to the National Association of Head Teachers:

  • Half of schools say they have been forced to cut spending in all areas and 82 per cent say their current budgets will impact their school standards negatively.
  • Almost half of schools think their budgets will be untenable in two years’ time (by 2017/18) or before. Two thirds think that their budgets will be untenable in four years’ time (by 2019/20) or before.
  • Continual stretching of budgets from a combination of cuts and increasing demands have left many school leaders feeling they may be reaching a breaking point in regards to their schools’ financial sustainability.

Universities and research

According to Universities UK:

  • In 2012, public investment in UK science as a proportion of GDP fell to its lowest level in 20 years and remains the lowest of any G8 economy. If funding for research faces further real-terms decline, the UK will gradually fall behind as a global research and innovation hub, at great cost to our economic growth potential.
  • Public research funding to universities has experienced a real terms decline of over £400 million between 2009/10 and 2013/14. This is on course to reach £600 million by 2015/16.
  • There is a significant threat to the long-term sustainability of particular universities. Risk factors include rising costs, decreasing funding per student, and uncertainty in domestic and international student recruitment and research income. 2012/13 saw the first decline in the number of international students on record, while competitor countries such as the US, Australia and Canada are achieving growth rates of at least 8 per cent.

Policing

According to the Association of Police and Crime Commissioners:

  • Budget reductions on the scale implied by the Spending Review will mean major restructuring of all the public services charged with maintaining law, order and public safety.
  • The unfunded budget gap could be over £400 million in the early years, rising to much more substantial levels towards the end of 2019/20.
  • This could lead to: increased fears for safety; loss of public confidence; even higher demands on policing as a result of further contraction in health and other local council services; less support for other local public services if the police service is forced to retreat to a more crime based, reactive approach; a break in the vital intelligence thread from grassroots community level up to national security; failure to make the required long term investment in technical skills and capacity; failure to respond adequately to changing crime patterns; threats to the long term sustainability of crime prevention activities.

Fire and rescue services

According to the Fire Brigades Union:

  • Emergency response times are slowing, emergency response is increasingly under-resourced and public safety is being put at risk (including hundreds of avoidable deaths).

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