— With additional reporting from Elizabeth Fish
Chancellor George Osborne on Wednesday announced the biggest UK spending cuts in decades, in a series of complex reforms to make extra savings.
The effects of the cuts will be widespread, affecting most public bodies, from local councils, to police forces, universities, and even the NHS.
Lincoln and Lincolnshire will of course be affected by the government’s measures, and many people will feel the pinch one way or another.
Spending review at a glance
■ 490,000 public sector jobs the be cut
■ Police funding cut by 4% a year for four years
■ Retirement age to rise from 65 to 66 by 2020
■ Regulated rail fares to rise 3% above inflation
■ 7.1% cut in annual council budgets (for four years)
■ Benefits cap and welfare measures to save £7billion per year
■ Child Benefit will be removed from families with a higher-rate taxpayer
■ 4.3% real annual rise in NHS budget
■ Free TV licences for over 75s
Painful public sector jobs losses
Almost half a million public sector jobs will be lost across the country, and Lincoln will be hit as well.
According to the latest Office for National Statistics (ONS), 33% of the employed people in Lincoln are public sector workers (17,900).
Local councils are facing cuts of around 7% for four years in their budgets, which means they will have to scale down on services, and lay people off.
“We already know for sure that there must be further cuts to services and, unfortunately, job losses,” said Martin Hill, Leader of the County Council.
“These will include compulsory redundancies across the board, as we quickly restructure our operations,” Hill added.
Council services face the axe
“The unavoidable question for us is not whether to cut services, but which to cut and by how much,” said County Council’s Chief Exec Tony McArdle.
It is likely to be the middle of November before each local authority can identify exactly how much money will need to be saved over the next four years.
“In a few weeks, the government will give individual councils an indication of what they can expect to get next year in government grants.
“Only at that point can our 2011/12 budgets for each service area begin to be set in detail,” McArdle explained.
“Like businesses and households across the country, local authorities will need to change to live within our reduced means.”
“There’s no denying the reality that things are going to get much tougher; we can’t do anything and everything any more,” Hill concluded.
Council tax though will not rise, as the treasury set aside £650m to help councils meet the coalition pledge to freeze council tax bills from next year.
“We are currently undergoing a series of reviews of our systems that we are confident will increase efficiency and make savings in some services,” said Andrew Taylor, Chief Exec at the City Council.
“In other areas we will look at our day-to-day business to see if we can make sensible savings.
“However, to meet these very challenging targets we will have to explore how we deliver services across the whole organisation,” Taylor explained.
“We will take sensible steps that will ensure the savings have as little impact on the public as possible,” explained City Council Leader Darren Grice.
The leaders of the city and county council said they were not surprised about the cuts Chancellor George Osborne announced in Parliament.
“Today’s announcements are no surprise, but it will take some time for us to digest all of the information and the real detail won’t be available to us yet,” said Grice.
“Today’s initial announcements are not a surprise and we are in the best possible position to deal with them, having been actively preparing for this situation for 18 months,” Hill echoed.
NHS is safe
NHS national spending will increase by 0.4% annually over the next for years, but service will have to make cuts as well.
“Funding for the NHS is protected but there is still a need for us to reduce expenditure,” said a Emily Firminger from United Lincolnshire Hospitals Trust.
“As a Trust, we are expected to achieve 15-20% in efficiency savings over the next four years, which will be about £60 to £70 million.”
‘Tough, fair, and necessary’
Conservative Lincoln MP Karl McCartney believes the spending review announced by the Chancellor “is tough, fair, and necessary.”
“Tough, because of the quite considerable cuts to some government departments; fair, because state support will still be focused on those who need it most; necessary, because of the disastrous economic legacy left by the last Labour Government.
“This Spending Review is about building a stronger economy, with more jobs, investment and growth.
“It is about building a fairer and more responsible society, with more opportunity for people to lift themselves out of poverty, and with state support focused on those who need it most.”