‘Unusual and illogical’ public sector cuts in spending review

Chancellor George Osborne has announced £11.5bn of cuts across government departments for 2015/16, including a 10% reduction in budget for local government.

Automatic pay rises in the civil service are to be scrapped and public sector pay rises will be limited to an average of up to 1%.

LGA chairman Sir Merrick Cockell warned the cuts to council spending will “stretch essential services to breaking point”, with many lacking the funding to meet their statutory responsibilities.

“It’s disappointing that a feudal approach still exists in relation to local government funding. Vital services are being damaged because councils do not have a seat at the table to negotiate a fair deal for local communities.”

Sir Merrick also welcomed the move on health and social care and said: “This provides a real pointer to other government departments of the type of joined-up approach that needs to be adopted right across the public sector in order to save money and maintain services.”

ACCA (the Association of Chartered Certified Accountants) called the cuts “a ticking time bomb”.

Gillian Fawcett, ACCA head of public sector, said: “The full impact of the austerity measures have yet to be felt by households in Britain. The protection of critical front-line services can no longer be guaranteed. No one knows yet what the impact the cuts will be and yet Chancellor’s scythe keeps slicing away.”

She welcomed the pooling of health and social care budgets, saying: “This provides local government with more flexibility in determining effective local service provision”. But she warned: “While the increase in capital spending looks good on paper and is certainly welcome, when taken along with the widespread cuts to the running costs of government departments and local government, the extra money is little more than shuffling the deckchairs around.”

“It seems unusual and illogical to makes cuts in the Treasury where financial leadership is needed most,” Fawcett added. “Managing public expenditure needs more, not less expertise. While setting an example might seem like the right gesture, government needs stronger financial leadership at a time of on-going cuts and greater financial management.”

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