In the red before it starts
Jul 26 2008 by Dave Black, The Journal
NORTHUMBERLAND’S new super-council will have to make budget cuts of £55m in its first four years to balance the books.
Yesterday the financial situation of the all-purpose unitary authority, which takes over in April, was described as frightening by a senior opposition councillor.
A report by county hall finance officers says the new Northumberland Council will have to make efficiency savings of £37m in its first two years – £27.9m of which will be required in 2009/10.
The savings equate to 20% of the total revenue budget available after the £250m guaranteed to education is taken away.
Officers are already warning the cuts will hit staffing and there is a clear risk of cuts in services such as social care, highways, leisure and rubbish collection.
The £55m savings target from next year to 2012/13 is based on the financial plans of the seven district councils and the county council, which disappear in April to be replaced with a unitary authority.
County council Conservative group leader Peter Jackson – who called for a financial breakdown two months ago – said the report raised further doubts about the previous Labour county’s successful bid to the Government to create the unitary council. “The bid talked about vastly improved services, yet now we have this massive black hole to face up to. All the great promises of the unitary authority have just evaporated overnight.
“I believe the true situation might be even worse, but having to save 20% of our net budget is frightening. This is why we have been asking for this report.
“We need to find out why the original bid to Government was so wrong, and this also gives us ammunition to go to ministers and ask for some help.”
The report by county finance director Steven Mason, to be discussed by the Northumberland joint transition forum this week, says the size of the savings will inevitably affect staff numbers.
The £37m target for two years is made up of £23.6m of savings already required by the seven councils, plus £13.2m associated with the new authority.
County council leader, Liberal Democrat Coun Jeff Reid, said: “As an administration, we have clearly been left in a very difficult financial position.
“However, that doesn’t mean we have to take a pessimistic view of how the new council is going to function or deliver frontline services.
“I am determined to be inspired by the task we have been given. Having a single unitary authority gives us an opportunity for this exercise not to be as painful as it would have been if all seven councils had still existed.”
A council spokeswoman said: “This £55m savings requirement is a direct result of the combined efficiency savings that all seven councils were facing.
“This situation is not unique to Northumberland. Councils across the country are facing tough targets and a difficult financial climate.
“The proposal for a single council that was supported by Parliament recognised the financial challenges faced by all councils in Northumberland.”
