Written evidence submitted by UNISON [SRF 034]

 

UNISON is the UK's largest trade union with nearly 1.4 million members. Our members are people working in the public services, for private contractors providing public services and in the essential utilities. They include frontline staff and managers working full or part time in local authorities, the NHS, the police service, universities, colleges and schools, the electricity, gas and water industries, transport and the voluntary sector. As a democratically mandated membership body we regularly engage with government and parliamentarians to protect and improve the pay and conditions of our members and the wider quality of life of their families and the broader community.

 

Since 2010, the United Kingdom has experienced a decade of austerity, the first coalition government in a generation and referendums on our voting system, the future relationship between our individual nations and the future relationship with the international community. The post Brexit political situation merely heightened the constitutional debate in a “disunited kingdom” of growing civic nationalism and regionalisation, the unsettled will for political change and the growing plurality of politics, which will have long-lasting implications for government and governance. Meanwhile, the COVID-19 pandemic is the single greatest challenge the country has faced since the Second World War. When restrictions are lifted, and the crisis is over things cannot return to how they were beforehand. The Government’s levelling up agenda will be fatally undermined unless local communities are provided with good quality local services and funding for all the associated support councils provide to local businesses

 

Local government and the Spending Review 2020

 

Despite promises from successive Governments, local government funding remains a significant challenge that has not been addressed – with the cross-party Local Government Association warning in July 2020 that councils face an estimated financial challenge of over £10billion in 2020/21 due to COVID-19. UNISON believes our members working in local authorities and the politicians elected to represent our communities are determined to play their part in stopping the spread of COVID-19. However, they do so with one hand tied behind their back as the Government fails to honour the commitment made by the Secretary of State for Housing, Communities and Local Government, Robert Jenrick MP, when he said councils would be funded to do “whatever it takes” to support their communities. Whilst we recognise that some funding has been provided to local authorities, one only must look at the top-level announcements to see it is not enough – for example, only 75% of income lost by English local authorities will be covered by top-up funding from central government. Whilst we are yet to see individual council allocations in the Local Government Settlement, pressures continue to mount, and a difficult winter period is likely to add additional financial challenges to local council finances, despite the modest amounts of relief provided by the Chancellor in the Spending Review. Additionally, the failure to increase the public health grant will further embed all the existing health inequalities across the country that have been so brutally exposed by the COVID-19 pandemic.

 

The grim reality of the Spending Review is a real terms pay cut for millions who work across public services, with the added risk of job cuts further down the line. Once inflation is considered, the Chancellor’s announcement of an arbitrary pay pause means about £520 less next year for a nursery nurse, £659 less for a social worker and £510 less a year for a local government admin officer. Even where there are exceptions to the pay pause, such as the £250 per year promised to those earning less than £24k and the prospect of a pay review body increase next year for NHS workers, it's hardly fair reward for the incredible work people are doing during the pandemic. It is extremely demoralising for public service workers to see the Government pitching this decision as public vs private during the worst health and economic crisis that we have faced in generations. Getting us through the pandemic and the recovery (suggested by the Office for Budget Responsibility as something that will take at least a further two years), will require a fully staffed, properly paid public service workforce – as well as measures to revive the private sector and get people back to work.

UNISON is clear that the two work together and there must be a recognition that extra money in pockets gets spent locally in the thousands of ailing shops and leisure, arts and hospitality venues that need to be saved.

 

The current financial situation of councils

 

The 10bn funding shortfall must be bridged by councils this year, either by increased income, or cuts to expenditure - they cannot put off the decision till later as the Treasury has over its refusal to address how it will pay for current borrowing (suggesting a sustained period of further cuts to spending is on the horizon). Too many local authorities are already on the precipice of financial ruin following a decade of cuts to town hall budgets and recent interventions in Croydon show us this problem does not affect solely one type of authority (rural vs urban, county council vs metropolitan authority). UNISON have delved into what the £10bn funding gap would mean in terms of cuts to service areas. If cuts were to be applied equally across all services, it would mean £1.9bn slashed from children’s social care spending, £1.1bn from environmental services and £3.5bn from adult social care – an area already in crisis before the coronavirus outbreak. A reduction of that magnitude could lead to the loss of 51,000 children’s social workers, 141,000 adult care workers, and almost 46,000 refuse collectors.

 

There are several council services which are required by statute, though the details of the required service are rarely identified. Furthermore, there are likely certain sectors whose services will have to be ringfenced due to their disproportionate effect when cut, for example, Social care (which takes up over 50% of council expenditure) and Public Health due to the current Covid-19 crisis. If social care – which accounts for more than half of local authority spending – and public health receive additional top ups to protect them (either from further grants or from the adult social care council tax increase the Government is forcing on councils), it would mean the budget for every other council function such as roads, housing, planning and environmental services would need to be cut by 54%. The 10bn shortfall will very likely fall disproportionately on services such as Environmental health, cultural services, planning and housing. The entire budget of these 4 services across England in 2019-20 was £10bn (10.2bn). 

 

 

 

 

Service

2019 budget (£million)

Predicted cut to budget in (£million)

Highways and transport services

4,864

1,023

Children's Social Care services

9,105

1,915

Adult Social Care services

16,787

3,531

Public Health services

3,242

682

Housing services (excluding Housing Revenue Account)

1,680

353

Cultural services

2,128

448

Environmental services

5,172

1,088

Planning and development services

1,251

263

Central services

2,969

625

Other Services

340

71

 

The fact is that, after 10 years of austerity, council service sectors are already running on razor-thin budgets and therefore any cuts will not be subsumed, even in part, by “efficiencies”. Any cuts will directly hit service provision and would mostly be covered by job losses. The below aims to show the sheer scale of these funding gaps across services by quantifying the cut in terms of the number of jobs it could fund in the sector or by comparing the scale of the funding gap to the cuts across the sectors in the previous 10 years of austerity.

 

Social Care

 

Social care takes up over half (54%) of council expenditure as of 2019.

 

As the table above shows, a 21% cut would be equivalent to a £3.5bn cut to adult social care – the equivalent cost of around 141,000 care worker jobs (calculated at a likely overestimate of £20,000 a year salary for a care worker and 25% employer costs on top of that).  Although realistically given the enormous demand being placed on the adult social care system now it is highly unlikely that the cuts would fall on this service area.

 

Separate to the adult social care budget, the children’s social care budget is facing a cut of £1.9bn, equivalent to funding 76,000 care workers at the same rate as an adult social above OR 51,000 social workers at a £30,000 salary. (alternative, a cut of 38,000 care workers at the rate above AND 25,500 Social workers calculated at a £30,000 salary).

 

Environmental health

 

The £1bn gap in environmental health is equivalent to cutting 45,000 refuse collector jobs (at £19,000 + 25%). While councils have a statutory duty to provide waste collection services, the frequency of collections is not mandated. Prior to the coronavirus crisis, many councils now collect bi-weekly with some councils moving to once every three weeks to lower budgets. 

 

Cultural services

 

Between 2010 and 2018-19 there was a 25% cut to library budgets (from £1bn to £750m). This cut had the following consequences:

Another 21% cut to library budgets would be a catastrophic £150m cut. While a significant proportion of the cuts were swallowed by job losses between 2010 and 2019 the functions of these jobs were, in part, covered by the increase in volunteers, with more than 51,000 volunteers (to the detriment of the service…. Lack of training/ qualification e.g., “while volunteers play a key and valuable role…”). However, in 2010 most library branches had enough staffing leeway to be able to cut staff numbers and still provide some level of service, allowing for the disparity between job losses (36%) and branch closures (18%). Now, most libraries are now running on a bare minimum of salaried staff. There are no more “efficiencies to be made”. A similar proportion of budget cuts is going to mean that savings must be found from fully closing branches in order to make savings on both staff and branch costs. Therefore, it is possible that we would see a slightly lower proportion of job losses, but a significantly higher number of closed libraries. Furthermore, cultural services have repeatedly been a soft target for budget cuts, and even though councils are mandated to provide some form of library service, the sector is likely to be hit significantly harder proportionally than sectors such as social care and public health.  even though it provides vital support to the most vulnerable in society.

 

Reasons for the funding shortfall

 

Councils have had to deal with a collapse in income because of falls in business rates and council tax payments (in large part because the chancellor announced a business rates holiday in March for the 2020/21 financial year for all retail, hospitality and leisure businesses). Business rates have increasingly made up more of the funding for councils in recent years as grant funding has been cut.  Other income streams that have been very disrupted include parking fees, planning fees and income from things like leisure services. Councils have also had to spend a lot more money on measures like food delivery to the most vulnerable members of the community, support for social care providers, getting rough sleepers off the streets and the work they’ve been doing to help track and trace efforts. 

 

As we face a major recession and the possibility of future waves of the pandemic it is vital that local councils are given enough funding to protect and support their local communities (especially if they are subject to further lock downs).  Without more money we’ll face more major problems to our track and trace work and in our social care systems. Councils should also be at the heart of getting the country out of recession through being able to provide more funding and assistance to help local businesses, to help make our communities more vibrant and healthy places to live and so they address the damage that has been done to them because of years of austerity.

 

Impact of the delay in a sustainable settlement for local government

 

Towards the tail end of 2019 we carried out a comprehensive set of Freedom of Information requests with every council in England, Wales and Scotland which gave a clear picture of the damage that has been done to council services across Great Britain since 2010.  The headline figures based on responses from 330 local councils in all three countries were that from 2010-2019:

These are some of the consequences of the £15bn reduction in core funding to councils in England over the last decade.  If the government is serious about levelling up the country, then these are the sort of cuts that need to be reversed. 

 

UNISON also recognises that there are additional dangers to service provision resulting from the rushed devolution arrangements and the inconsistency in the model used in England. Cuts by central government to expenditure on public services have been hardest felt by local government in England – and all too often the hardest hit have been those with greatest need. In March 2018 the National Audit Office warned that “A combination of reduced funding and higher demand has meant that a growing number of single-tier and county authorities have not managed within their service budgets and have relied on reserves to balance their books. These trends are not financially sustainable over the medium term”.

 

Despite the decision to cut funding being taken in Whitehall, blame for service reductions and cuts has been passed on to town halls across England. UNISON is clear that the blame for the appalling impact of austerity on our communities falls squarely on the government in Westminster and not local decision makers themselves. For example, a decade of cuts to local government means many councils are now facing a crisis in funding that has only been exacerbated by the COVID-19 pandemic. Extraordinary interventions were needed in Northamptonshire after flawed strategies to deliver the savings required by austerity failed spectacularly with appalling consequences for local services while many other authorities – amongst them Croydon, Somerset, Norfolk and Lancashire – have faced severe difficulties in setting balanced budgets.

 

Since 2010 the Government has placed further restrictions on the abilities of local councils to raise their own revenue. Laws requiring referendums on council tax increases above a certain amount (set again in the Spending Review at 2%) are simply rate-capping with a fig leaf of democracy. It should be for individual councils and regional government to set their local tax levels and for local people to determine if they deem any increases to be “excessive” through the ballot box, rather than the Secretary of State decreeing what constitutes “excessive” from the centre.

 

Lord Gary Porter, the Conservative former Chair of the Local Government Association, has said “Councils can no longer be expected to run our vital local services on a shoestring”. Local and regional government simply cannot take any more cuts whilst their hands are tied on local income generation. The Government must find a way to sustainably fund councils and regional government and put an end to the crisis in public services. Devolution in England cannot continue whilst central government fails to adequately fund public services.

 

Future public spending settlements need to provide additional resources to local and regional public services and place these arrangements on a sustainable long-term settlement. Firstly, Government must ensure that there is no funding gap (previously estimated by the LGA as councils needing an additional £3.2bn in 2019/20, rising to £8bn in 2024/25). Secondly, future public spending arrangements must recognise the additional costs that arise for local and regional government from inflation, population growth and demand for local services. Finally, Government must begin to address the damage and unmet needs resulting from a decade of austerity and highlighted by the COVID-19 pandemic. Specifically, UNISON recommends that:

 

UNISON would welcome the opportunity to discuss this submission further with members of the Committee.

 

November 2020