WARNINGS have been sounded that some councils may end up going to the wall after the Communities Secretary announced millions of pounds more in spending cuts.
Council treasurers across the North East are poring over their latest funding settlements, with many appearing last night to be facing £2m-£3m extra cuts in 2013, with longer-term projections and rising bills meaning councils will come under further pressure to cut services.
Communities Secretary Eric Pickles insisted the cuts in spending power were on average equal to just a 1.7% further reduction when other grants were taken into account.
But the Conservative MP provoked ridicule when alongside the funding cuts he released a list of 50 ways local authorities can save money, including opening up cafes or asking people attending meetings to bring their own food and snacks.
Last night Newcastle City Council leader Nick Forbes said: “We have to find £90m of cuts, I don’t know how many coffee shops I would have to open for us to avoid that.
“It is early days but we think the funding settlement Mr Pickles has announced will add maybe £7m to our three years of budget cuts.
“Those already painful cuts that we are currently preparing for have just got much worse, and when you look at the further years of austerity the Government says is needed I can see some councils being unable to cope and going to the wall as a result of this.”
Announcing further cuts in Parliament, Mr Pickles said extra measures such as sharing back office work or ending council award ceremonies and union subsidies could help reduce the savings local authorities need to make.
In a pointed comment to the Commons, he said that Newcastle City Council and the rest of the North was still receiving enough to get by.
Mr Pickles said: “Predictably, the doom- mongers have been consulting their Mayan calendars and issuing dire warnings about the end of the world as we know it on Friday and a £1bn black hole in local budgets.
“Some have, shamefully, predicted riots on the streets. But Nostradamus need not worry, because all those predictions have come to nothing.
“Concerns that the poorest councils or those in the North would suffer disproportionately are wide of the mark.
“Newcastle has a spending power per household of £2,522, which is well over £700 more than the £1,814 per household in Wokingham.”
But Durham’s Labour council leader Simon Henig said the cuts handed out yesterday were part of a worrying trend.
He said: “It will take time to assess the data but on the face of it this is another significant transfer of cash from North to South. See, for example, the increases for every council in Somerset and most in Cambridgeshire.
“This is now becoming a year-on-year pattern under this Tory-Lib Dem government.
“It is extraordinary at a time of austerity that many councils in the affluent South are receiving an increase from the Government while council funding in the North continues to be cut.”
