Wednesday, 26 June 2013

What the Spending Review means for Cornwall

Today's spending review is a significant milestone in the work of the government and includes some important news (both positive and negative) for Cornwall.

The headline for Cornwall Council is a 10% cut in government grant for 2015/16. This is the amount that we had expected and been planning for, but that does not make it any easier to deal with. This will equate to around £20 million of further cuts on top of the £19 million we are making in the 2014/15 budget.

Personally, I am disappointed that Eric Pickles did not stand up stronger for local government. We provide many key services to the most vulnerable in society yet we are being expected to shoulder the harshest cuts. I can understand why the government wanted to ringfence the NHS, overseas aid and the schools budget in this process. But why not treat social care for the elderly and support for the homeless in the same way? Why is local government facing a 10% cut whilst Culture, Media and Sport only being asked to find 7%?

The Chancellor announced that he had extended the council tax freeze for another two years. That is all very well, but we do not yet know what money there will be to finance such a freeze. Two years ago we got a grant equivalent to 2.5% in return for a freeze. Last year, it was a grant equivalent to just 1%. This year we do not know what grant (if any) is on offer. Only when we do can members consider whether a freeze is a valid option for Cornwall Council.

Over the last four years, Cornwall Council has saved around £160 million in organisational costs - much achieved because of the move to unitary status. These have allowed us to avoid having to make sweeping front line service cuts. But be under no illusion. We cannot make these savings over again. Whilst we will always seek to make savings through efficiencies, we cannot manage all of the necessary cuts in this way. We will have to be cutting frontline services.

The new administration is determined to consult with all 123 councillor and with the people of Cornwall in deciding where those cuts should be made. We want to safeguard services which are most valued and relied upon by our residents and which protect the most vulnerable. But that still means some tough choices have to be made.

In other areas, there was better news.
  • Extra money in the form of the Pupil Premium will mean more cash for schools.
  • The cut in water bills in Cornwall which was introduced last year has been extended. This is £50 per year off the water bill of everyone served by South West Water and is recognition of the disproportionate amount we have to pay for cleaning up our coastline. Congratulations to Dan Rogerson for his work on this.
  • There will be an extra £3 billion for new housing and more capital programme money will be announced tomorrow. We hope this will be available to invest in much needed projects in Cornwall.
  • More than £9.5 billion for roads and rail projects. Again, we hope that this money reaches the far South West, and we think that works on the A303 will be part of this spending.
As ever, there will be much more detail to come out in the coming days and weeks.

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