There's plenty of fat for councils to trim


trimmingfatMuch has been made of the ‘regressive’ cuts and the claim that the poor, the sick and the elderly will bear the brunt of the pain. Now it seems that councils will be added to this list, condemned to years of misery because of reduced spending of 35% by 2014-15. Most of this is exaggerated scaremongering.

The obvious solution for many would be to increase council tax, and so revenue, to save services. However, this is no solution. Tax levels are already painfully high, and many areas have had their rates doubled since 1997. The government seems to recognise this, having put pressure on councils to keep levels stable.

Despite much of the gloom espoused by journalists, there is plenty of administrative fat to be trimmed from councils. Three London councils have already found savings of £50m to £100m a year by sharing administrative staff. This is an incredible saving; especially as it (apparently) has been found within two days. While inevitably this will produce job losses, the real fear is that this local governance will be centralised into super-regional decision making, undermining its very purpose. However much of this ‘centralisation’ is exaggerated. Westminster, Hammersmith & Fulham and Kensington & Chelsea do not all need to separately employ different people each making the same decisions. Not every area of spending is unique to the area.

Savings such as these will not be available across the country, yet before politically insensitive things such as disability payments are slashed instead, there is great potential for another solution: privatisation. In the face of huge budget cuts, Chicago Mayor Richard Daley controversially leased many of the city’s unnecessary areas of expenditure, such as toll roads and parking meters, to the private sector, gaining billions of dollars as a result. Refuse collection is a service where there is considerable room for development as low barriers to entry and much competition mean the private sector could provide much cheaper services than current council initiatives. Exeter City Council has made significant progress in this area, with IBM beginning to provide services.

This all goes without mentioning the bloated salaries and pensions that many councillors enjoy. If your council begins to cut frontline services, be aware they probably do not need to.