Comprehensive Spending Review 2010!

THE Chancellor George Osborne on 20 October 2010, has unveiled the biggest UK spending cuts since World War II, with welfare, councils and police budgets all hit. There has been very intense media speculation in the run up to the announcement of his Spending Review in the House of Commons. The Chancellor's decisions about where the axe would fall have immediately provoked strong reactions, both favourable and negative. The unions have predictably warned that coalition the cuts threaten growth and could lead to a new recession, but businesses have mainly come out in favour, saying the cuts are required to put the UK's economic future on track. In fact the stock market rallied after the Chancellor of the Exchequer's Spending Review statement. John Hannett, Usdaw General Secretary said:- "We accept there is a need to reduce the deficit but we believe the speed and depth of the proposed cuts is both unfair and irresponsible. It is irresponsible because over a million more jobs in both the public and private sectors are now under threat and yet there was virtually nothing in the Chancellor's statement about how the government plans to secure the recovery and future economic growth. Consumer confidence is already down and following this review it is unlikely to recover quickly and I fear the government maybe pushing us into another recession. It is unfair because women, families and the low paid will continue to face the brunt of the cuts when it should really be the banks and financial sector that caused the crisis in the first place. The coalition has already announced massive cuts to the financial support many of our low paid but hard working members rely on to make ends meet and we now fear that the replacement of all in work benefits and tax credits with a universal credit will hit our members and their families even harder. The Chancellor's boast that we are 'all in this together' is going to sound pretty hollow this Christmas and New Year when the bankers start celebrating huge bonus payouts while many families face financial hardship and the spectre of unemployment."

Halton Borough Council were one of the first in our area to announce that there could be 180 job losses and this is before the results of the comprehensive spending review was known. Council chiefs in the Borough warned that this figure could rise to 500. Some of those employed by the council are from Merseyside. Jimmy Fallon, UNISON Branch Secretary said:- “This is an extremely worrying time for our members, their families and residents of Halton. UNISON is working hard to ensure that there will be no compulsory redundancies and that quality services to the public are maintained."

Merseyside Police was ordered to cut £4.1m from its current budget. This has lead to the loss about 240 officer posts after authority members backed a recruitment freeze for the foreseeable future.

Charlotte Harrison, Director of Policy and Strategy at the Northern Housing Consortium (NHC), commented:- “As widely trailed, the housing sector bore the brunt of the Government’s spending review. Communities and Local Government (CLG) saw headline reductions in their programme and administration budgets of 51% - one of the largest across Whitehall. Whilst there will inevitably be a focus on the cuts as they affect CLG and its funding streams, our view is that the economic geography and levels of deprivation in the North, coupled with the higher levels of sickness and long term illness, demands that we take a wider, holistic view of the implications of CSR. The briefing paper and podcast that we have put out today – the only briefing to specifically explore the Northern impact of the announcements for local authorities and housing providers – starts to examine what these implications are, and we will be working closely with our members, along with CLG, DWP and DEC, in the coming weeks to better understand and influence the detail as it emerges.”

The future of a national arts festival for deaf and disabled looks uncertain, and the event to run from 18 November to 3 December 2010 in Liverpool might be the last one. Ruth Gould, the festival's founder, before the results of the review were announced, said she did not yet know how the government's cuts would affect the festival's funding for next year. DaDa International Festival is the only long term event of its kind in the UK and has been running annually for the past decade. This 16 day series of events which attracts more than 11,000 people from across the UK, but the 15% cut to front line arts grants and a 41% cut to administration within the Arts Council is likely to impact on its future. The event heavily relies on Liverpool City Council and Arts Council England funding, but Chancellor George Osborne announced spending cuts to both bodies which now puts the festival in the firing line. Should events like this be saved? But then the question as to where the cash will be found comes back into play. That question has been asked by many over the last few days and will continue to be over the next year or so.

The Forum of Private Business responded to the Comprehensive Spending Review (CSR) by calling on the government to go further to create an even playing field on tax for small firms. “Some of the announcements on taxation were welcome, but for too long large companies have been able to exploit tax loopholes ; such as Channel Islands VAT ‘low value consignment relief’ and otherwise avoid paying tax at the expense of small firms. This simply has to stop if SME growth and job creation is to drive sustained economic recovery. The Government should clarify that, in addition to tackling tax evasion, clamping down on tax avoidance by large companies as well as financial institutions will be in its sights. At the very least we want to see the lower rate of corporation tax reduced, at the same level as the big business rate. But even if combined with a shake up of other cost barriers such as red tape and late payment this will not be enough to significantly stimulate small business growth and create the private sector jobs required following the 490,000. Bolder, more radical policies on tax and other barriers to small businesses must be introduced alongside these efficiency measures.” said the Forum’s Head of Campaigns Jane Bennett.

Despite a 13.3% cut nationally within the transport budget, and a rise in regulated cap on rail fares to 3% above inflation for three years from 2012. Transport for Merseyside has had a welcome boost. For Merseyside's transport it was not as bad as it could have been. Both the upgraded and electrification of the Liverpool to Manchester rail line will still go ahead. Also the Mersey Gateway Project is also going ahead. Both seen as vital parts of the region’s economic development for the future, by the Chancellor. The Mersey Gateway Project had been put on hold, but this 1km (0.6 miles) long bridge between Runcorn and Widnes will go ahead. The £431m bridge build project by the Department for Transport (DfT) has been largely be met by the private sector and road user charging. But despite widespread support, the scheme is opposed by the National Alliance Against Tolls (NAAT) because it means charges are also planned to be introduced on the Silver Jubilee Bridge. As for the announcement that the Liverpool to Manchester line will be upgraded and electrified, slashing travel times between the conurbation’s two major economic drivers has also had widespread support. Chief Executive of Merseytravel, Neil Scales, has welcomed Government announcement that the Liverpool to Manchester line. He told the media that:- “This investment is fantastic news for our region it will make a real difference to transport in our region. Electrification of the line will ensure that these services are clean and green at the point of use; the investment will cut CO2 emissions drastically and ensure these services are much more reliable, comfortable and capable of carrying more passengers. It will also ensure that travel times between Liverpool and Manchester are cut to around 30 minutes, improving connectivity and enhancing business opportunities in the Liverpool City Region. The decision to push ahead with the scheme comes after some very intensive lobbying from our ITA Members, led by Councillor Mark Dowd, and our officers. So, all credit to everyone that has pulled together over many years to make this happen”

Lib Dem, John Leech MP, Member of Parliament for Manchester Withington contacted us to say:- "This will lead to real help for families and children in the long run. Take in our area, schools and the NHS and our children are being protected by the Comprehensive Spending Review. For example the Schools budget will rise from £35bn to £39bn. With £2.5bn of EXTRA money being directed to children from more deprived backgrounds. This extra money will be given direct to the schools for the head teacher to choose how to spend in the interests of the pupils at the school. Surestart 's budget is protected, and being redirected to the most disadvantaged children as it was originally intended. Disadvantages children will also now be entitled to 15 hours per week of free childcare (£300m). NHS budget will rise, above inflation, every year. Child benefit is axed for the richest 15%, but protected for the rest. £44m for a Women's and Children's Unit at the Royal Oldham Hospital in Greater Manchester to provide the highest level of neo-natal intensive care. Children, pensioners and those on low incomes in Manchester have been protected by the measures announced in the Spending Review. We are increasing the money for schools, the NHS and to help children achieve their potential. These measures will make a real difference in Manchester to those who need our help most."

Interestingly, as Westminster heard the UK's Government's plans for cuts in the UK budget, it came as a shock to Chris Davies, the Liberal Democrat MEP for the North West, that MEPs voted in Strasbourg for more EU spending! Those supporting a rise in the EU’s €130 billion budget claim that governments have insisted that more is spent on new projects, such as the creation of its diplomatic service. Chris Davies MEP issued a press statement saying:- "A deal will have to be reached with EU governments, and this vote only represents the adoption of a tough negotiating position, but it makes MEPs look completely out of touch with financial reality."

The key announcements:-

► Around 490,000 UK public sector jobs will be lost
► A total of £81bn cut in spending
► Average 19% departmental budget cuts throughout the UK
► £7bn in additional welfare budget cuts will take effect
► Police across the UK will see a funding cut of 4% every year until the 2014 to 2015 tax year
► Retirement age is now to rise from 65 to 66 by 2020
► English schools budget has been protected
► NHS budget in England to rise every year until 2015
► Regulated UK rail fares to rise 3% above inflation
► Bank levy to be made permanent

Will the coalition's economic policy threatening to seriously damage growth and at worse risk plunging the UK into another recession?

Or is this the only sensible reaction to the crisis of serious national debt?

Is it all just bad news or do you think this is a positive move by the Government to bring the UK's public sector back in line?

Do you think it will affect us on Merseyside very badly or not?

How are the cuts going to affect you?

Email your views on this topic to our newsroom via:- news24@southportreporter.com.