Spending review poses tough financial questions for Brighton and Hove council

Posted On 27 Jun 2013 at 9:46 pm

The government’s spending review is expected to lead to a 10 per cent budget cut for local authorities such as Brighton and Hove City Council.

Chancellor George Osborne announced his spending plans for 2014-15 – the year leading up to the next general election and the next local elections in Brighton and Hove.

Council leader Jason Kitcat said: “I had to laugh when George Osborne called Eric Pickles the epitome of lean government. Eric Pickles has offered up a 10 per cent cut from local government.

Eric Pickles

Eric Pickles

“The Local Government Association has estimated that by the end of this parliament, councils’ funding from central government will have been cut by 33 per cent.

“In comparison, Whitehall departments will have faced average reductions of 12 per cent.”

He said that uncertainty remained about the forthcoming 10 per cent cut in spending, adding: “We don’t yet know how that 10 per cent gets apportioned.

“Brighton and Hove was the second worst cut council in the country of our type this year and we were the worst cut in the region.”

Councillor Kitcat said that the council budget was about £750 million including public health spending which had just come back to local authorities.

He said: “We only have about £400 million to work with as the rest is ringfenced for things like schools.”

The government was talking about taking some of the money allocated to councils for education and handing it directly to schools.

He added: “When they do that, they tend to top slice it.”

Councillor Kitcat expressed concerns too about a £2 billion “growth pot” which the Chancellor announced in response to a report by Lord Heseltine.

He said that he was worried that Mr Osborne was “rebadging things that we thought we already had such as the new homes bonus which councils have been betting on to stimulate local development”.

He added: “If it’s true, that would be galling.”

The government also announced an allocation of £67 million to the Coast to Capital Local Enterprise Partnership.

The money is intended to be invested in projects such as the i360 by the West Pier in Brighton and the Block J development by Brighton Station.

Councillor Kitcat praised the shift of finance from the NHS to councils for adult social care – about £2 billion across the country.

Councillor Jason Kitcat

Councillor Jason Kitcat

He said: “That’s a move in the right direction. There seems to be a consensus. We agree there should be more integration.”

But £2 billion would not go far, he cautioned, once it was divided up among so many councils.

He said: “With hospitals, the drivers are different. They want to get people in and out as quickly as possible.”

The money would fund extra community care, some of which would prevent people from needing to be admitted to hospital. Some would help fund community care for those who no longer needed to be in hospital.

Earlier today (Thursday 27 June) Councillor Kitcat went to a meeting with the Deputy Prime Minister Nick Clegg and Greg Clark, the Financial Secretary to the Treasury. Mr Clark is the minister responsible for cities policy.

Councillor Kitcat said that they discussed the “city deal” policy. In the case of Brighton and Hove, it involves exploring a number of possible ways to boost the local economy.

He said: “We touched on growth hubs such as Shoreham and Newhaven ports, the universities, the need for office space and maximising commercial opportunities locally plus the Rampion offshore wind farm – putting all those things together.”

The challenge appears to be to unblock the obstacles standing in the way of a growing local economy.

It’s a political goal shared by both Councillor Kitcat, a Green, and the Conservative Chancellor – even if they might differ about the best way to achieve it.

 

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