Councils ‘Heading For The Rocks’ Due To Cuts

[MARTINX9]

You used qualitative and unobjective comparisons

I haven't actually physically threatened you, you have me

I have quoted facts - have you?

Don't be so sensitive - or is asking you to justify your comments now physically threatening!

Lets stick to the issues - you are the one that started getting personal.

[Democorruptcy]

Councils are already under a legal obligation to run a balanced budget - not that no borrowing is allowed, but fairly restricted grounds on which they can borrow, has to be over a given timeframe for a particular reason, with clearly identified routes to pay the interest and the debt at the end of the term. A budget may not be passed unless the finance chief (the 'section 151 officer') approves it, no matter the political control.

Just about the only unfunded ongoing obligations they have are PFI contracts, which can last for decades and be real millstones around their necks. Council tax revenue, incidentally, is only a fraction of the budget - around half of it comes in the grant from central government, and the rest made up in various income streams (charging for parking, certain library services, etc)

The cuts Pickles is forcing local government to absorb are unmatched anywhere else in government, losing 25-35% of income over four years. However you feel about funding levels, forcing them to change at that rate is unreasonable unless your aim is to disable local government altogether - the climbdown is simply too steep.

Birmingham got a Triple AAA rating in 2011 enabling it to borrow cheaply.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8820498/Birmingham-given-AAA-credit-rating.html

It lost the Triple AAA rating this year after the UK also lost it.

http://www.thechamberlainfiles.com/birmingham-loses-coveted-aaa-credit-rating/7148/

Re cuts and borrowing it says here they have to make £102m of cuts for 2013/14 but borrowing has increased to settle £750m of equal pay claims. Luckily their forecast £3.8bn of debt is just below the government's authorised debt limit.

Presumably the equal pay claims will also lead to enhanced pensions? So the future outgoings have also increased? Let's hope the government raises their debt ceiling?

The announcement came shortly before today’s city council budget-fixing meeting where spending cuts totalling £102 million will be approved for 2013-14.

The budget booklet confirms that Birmingham City Council’s debt remains at record levels and is likely to climb to £3.8 billion by 2015-16. However, the figure is just below the authorised debt limit approved by the government.

Borrowing requirements have been boosted by a £750 million bill to settle equal pay claims from former council staff.

http://www.thechamberlainfiles.com/birmingham-loses-coveted-aaa-credit-rating/7148/

Edited October 20, 2013 by Democorruptcy

[SuperChimp]

Councils are already under a legal obligation to run a balanced budget - not that no borrowing is allowed, but fairly restricted grounds on which they can borrow, has to be over a given timeframe for a particular reason, with clearly identified routes to pay the interest and the debt at the end of the term. A budget may not be passed unless the finance chief (the 'section 151 officer') approves it, no matter the political control.

Just about the only unfunded ongoing obligations they have are PFI contracts, which can last for decades and be real millstones around their necks. Council tax revenue, incidentally, is only a fraction of the budget - around half of it comes in the grant from central government, and the rest made up in various income streams (charging for parking, certain library services, etc)

The cuts Pickles is forcing local government to absorb are unmatched anywhere else in government, losing 25-35% of income over four years. However you feel about funding levels, forcing them to change at that rate is unreasonable unless your aim is to disable local government altogether - the climbdown is simply too steep.

Thanks for the info.

[Bloo Loo]

snip

Just about the only unfunded ongoing obligations they have are PFI contracts, which can last for decades and be real millstones around their necks. snip

And pensions.

But pensions are an enormous issue for us all...its just that some get to live in clover at others expense.

[winkie]

And pensions.

But pensions are an enormous issue for us all...its just that some get to live in clover at others expense.

...not forgetting that those same pensions and their spending power are keeping large parts of the country going......all be it lower living costs, less debt and lower pensions would have been a far fairer way of doing things to far more people.....but as we all well know nothing will ever be allowed to go down, they will fight it all the way, thus enabling prosperity for all....not.

[Timak]

I said on here the other day that council's will go bust.

It is nothing to do with inefficiency or pensions.

They have had a 30-40% cut in their income from central government and have no way of making up that shortfall.

The small Tory council I do some work at has one of the lowest council tax charges in the country. They do not run any services which are not mandatory for them to run - basically bin collection, environmental health, planning, housing allocation, benefits administration and council tax collection plus associated admin to run these services (IT, legal and democratic services). However in order to break even they will have to reduce staff spending by 40%. No reasonable person would go in those offices and think they are massively overstaffed or that processes are massively inefficient. They are just being starved of the funds they need to do the jobs required of them.

[winkie]

I said on here the other day that council's will go bust.

It is nothing to do with inefficiency or pensions.

They have had a 30-40% cut in their income from central government and have no way of making up that shortfall.

The small Tory council I do some work at has one of the lowest council tax charges in the country. They do not run any services which are not mandatory for them to run - basically bin collection, environmental health, planning, housing allocation, benefits administration and council tax collection plus associated admin to run these services (IT, legal and democratic services). However in order to break even they will have to reduce staff spending by 40%. No reasonable person would go in those offices and think they are massively overstaffed or that processes are massively inefficient. They are just being starved of the funds they need to do the jobs required of them.

They can always privatise it all......seems to be the 'in' solution to all our woes.....but where will they send the losses?, the pension deficits? the bad banks?

[workingpoor]

Yes private sector companies relying on lucrative public sector contracts, it's been a real cash cow for years glad to see the reigns are being tightened.

There more than a few council run leisure centres around my way that only ever seem to have a handful of patrons using the facilities but are overflowing with staff.

I sometimes think the overly large numbers of staff I see working for private companies that contract work from the public sector is almost like a job creation scheme. I mean it's almost like the government knows all about it and has directed these com

[Si1]

They can always privatise it all......seems to be the 'in' solution to all our woes.....but where will they send the losses?, the pension deficits? the bad banks?

The shareholders

[winkie]

The shareholders

....will they buy that?

[Si1]

....will they buy that?

They bought the royal mail

[Bloo Loo]

Yes private sector companies relying on lucrative public sector contracts, it's been a real cash cow for years glad to see the reigns are being tightened.

There more than a few council run leisure centres around my way that only ever seem to have a handful of patrons using the facilities but are overflowing with staff.

I sometimes think the overly large numbers of staff I see working for private companies that contract work from the public sector is almost like a job creation scheme. I mean it's almost like the government knows all about it and has directed these com

Diversity has a shedload to do with this...First, Policy is drawn up for operating procedures internally in the Departments, this includes working practices, breaks, holiday cover etc etc. This leads to massive staff numbers with overcover in many areas...next, if YOU want to contract to the COuncils, you MUST adopt these same policies...Diversity Policy is particularly important here, and this is sold and justified as being a really enlightened, but most of all, efficient way to work.

So your private contractors running council facilities become council in their culture and outlook.

PC is another important tool they use to forcepolicy

At the end of the day, they run out of money..not to provide services, but for their own service provision. the priority is reversed from "what can we do to help", to we cant afford to help you as we have our own problems to solve

[winkie]

They bought the royal mail

Only because they did not buy the pension promises.....the rest of us and our children will be paying for that.

[Si1]

Only because they did not buy the pension promises.....the rest of us and our children will be paying for that.

Part true, the royal mail still needs reform however

[winkie]

Part true, the royal mail still needs reform however

All true, the royal mail have already began to be reformed over the last five years or so, have you not noticed the high jump in postal charges recently, have you not noticed they have done away with second delivery, more mechanisation, fewer staff required?......not a problem with that as long as customers have other choice alternatives...not a problem if overall lower wages/ fewer hours is reflected in overall lower living costs to compensate a decline in the need for workers/staff in many industries, offices, corporations especially blue collar workers and lower skilled workers...technology, mechanisation, excess global labour......but not everyone can be a brain surgeon, still if there was a demand for highly skilled labour they would still import it if it was as good or better and cost less.

[Dorkins]

I know its easy to knock local councils - but they actually are a lot more efficient in practice than central government.

Look at the collection rates for council tax and business rates - 98 to 99% in most cases.

Those are the easiest taxes to collect because they're due on land, which is quite difficult to hide and easy to confiscate upon non-payment of tax.

[frederico]

Why the flip am I paying for services a council didn't legally have to provide.

Councils have grown like cancer tumours.

[bristolhunter]

Birmingham got a Triple AAA rating in 2011 enabling it to borrow cheaply.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8820498/Birmingham-given-AAA-credit-rating.html

It lost the Triple AAA rating this year after the UK also lost it.

http://www.thechamberlainfiles.com/birmingham-loses-coveted-aaa-credit-rating/7148/

In unitary systems, children governments inherit their parent's credit rating. Any UK council should have the same credit rating as the UK, on the assumption that the UK government will pay any debts that the council suddenly finds itself unable to.

[oracle]

http://www.thestar.co.uk/news/local/councils-heading-for-the-rocks-due-to-cuts-1-6158126

And he totally ignores the pension liability issue which is making all of this possible and of course the large debts many councils have run up over the past couple of decades which haven't been paid off. Servicing the debt means less discretionary spending. Some of this has nothing to to with the "government" it's down to poor decisions being made at the local level by local councillors!

well despite these so called "cuts" I can't really say I've noticed much difference.

one US analyst put it quite succinctly during their "shutdown"

when all of the "non-essential" services were furloghed, this guy replied, "well if they aren't essential, why are they there???"

[oracle]

http://www.thestar.co.uk/news/local/councils-heading-for-the-rocks-due-to-cuts-1-6158126

And he totally ignores the pension liability issue which is making all of this possible and of course the large debts many councils have run up over the past couple of decades which haven't been paid off. Servicing the debt means less discretionary spending. Some of this has nothing to to with the "government" it's down to poor decisions being made at the local level by local councillors!

well despite these so called "cuts" I can't really say I've noticed much difference.

one US analyst put it quite succinctly during their "shutdown"

when all of the "non-essential" services were furloghed, this guy replied, "well if they aren't essential, why are they there???"

[workingpoor]

Diversity has a shedload to do with this...First, Policy is drawn up for operating procedures internally in the Departments, this includes working practices, breaks, holiday cover etc etc. This leads to massive staff numbers with overcover in many areas...next, if YOU want to contract to the COuncils, you MUST adopt these same policies...Diversity Policy is particularly important here, and this is sold and justified as being a really enlightened, but most of all, efficient way to work.

So your private contractors running council facilities become council in their culture and outlook.

PC is another important tool they use to forcepolicy

At the end of the day, they run out of money..not to provide services, but for their own service provision. the priority is reversed from "what can we do to help", to we cant afford to help you as we have our own problems to solve

An interesting insight thanks!

[bristolhunter]

Why the flip am I paying for services a council didn't legally have to provide.

Councils have grown like cancer tumours.

Because The People want them. If you think your council is providing too many services, find a party promising to cut back to statutory minimum and vote for them. Most people don't do that. Statutory minimum is actually quite large anyway, or at least vague (some of the requirements to run something comprehensively, efficiently, broadly, necessarily are extremely open to interpretation). Other things can provide an income, which subsidise statutory services and keep council tax down; are there services you're particularly thinking of that your local council provides that you think they shouldn't? Or was this just a vague 'they should do less but I don't know what' comment?

[frederico]

Exactly, if you're massively in debt, you don't pay for none essentials, if you do you'll be bankrupt soon.

[oracle]

All true, the royal mail have already began to be reformed over the last five years or so, have you not noticed the high jump in postal charges recently, have you not noticed they have done away with second delivery, more mechanisation, fewer staff required?......not a problem with that as long as customers have other choice alternatives...not a problem if overall lower wages/ fewer hours is reflected in overall lower living costs to compensate a decline in the need for workers/staff in many industries, offices, corporations especially blue collar workers and lower skilled workers...technology, mechanisation, excess global labour......but not everyone can be a brain surgeon, still if there was a demand for highly skilled labour they would still import it if it was as good or better and cost less.

precisely.

but municipal services are presently a monopoly.

monopolies very rarely provide the best service at the lowest cost....frankly they are too complacent.

(you could say this about the council workers going on strike and refusing to empty the bins for instance.......but if you and some others in the neighbourhood decide to have a whip-round and get it done privately...then you,surely, are entitled to a rebate from the council for services paid for but not rendered.

(you could say the same about the money system,but that's another issue)

I'm personally in favour of a more competitive approach to issuance of media of exchange.

if resources aren't being deployed as effectively as possible then frankly those in charge need a kick in the pants to clean their act up.

...as I said, I don't favour a global monopoly on this(or resources/food/water/energy/housing etc),I want to see a leaner method of transaction.

..if the new alternative(s) can provide a better service at lower charges then that's a good thing.

the old behemoths need to shape up or ship out....no time for sloth and laziness.

Edited October 20, 2013 by oracle

[cybernoid]

was this just a vague 'they should do less but I don't know what' comment?

Ok I'll start based on waste I have seen whilst not particularly looking.

How about no longer putting 8 men on a roundabout for hours at a time to move some flowers around and cut the grass that was already short?

How about not using a truck with a lifting mechanism requiring a driver, supervisor/pedestrian way closed signage operator & bulb technician on the back to change light bulbs 3 metres on the air instead of a couple of guys with a ladder and some pride?

How about not putting 4 men in a small car park in autumn each with leaf blowers sauntering around all morning blowing leaves from one area of the car park to another for no particular reason?

How about not employing lazy fkwits at all? Now theres a notion.