Councils face financial uncertainty after cuts

Cash-strapped councils in Lincolnshire are to have their purses tightened even further after the government announced swingeing new cuts.

Lincolnshire County Council and East Lindsey District Council could see their budget slashed by up to eight per cent over the next two years following MP Eric Pickles’ statement in the House of Commons on Wednesday.

Both authorities have pledged to retain frontline services while admitting savings would need to be made.

Executive member for finance and HR at LCC, Coun Kelly Smith, said: “Although we haven’t received the full details of our settlement yet, we’re expecting to face further challenges, meaning more savings will be needed.

“However, we’re committed to protecting priority services while playing our part in balancing the nation’s books.

“Over the last two years we’ve found savings of around £80 million and have plans in place that will bring a further £45 million of savings over the next two years.”

East Lindsey District Council is also unsure of the exact extent of the cuts, which it says will cause ‘great problems’ in planning next year’s budget - though savings are envisaged to be necessary and in line with what had been expected and planned for.

Council leader, Coun Doreen Stephenson, said: “Since 2007 we’ve been working hard to position the council to deal with the financial pressures we knew we’d face and this has been successful so far, but we know the challenges around the corner are far greater.

Pioneering shared service project Compass Point Business is anticipated to make £19 million in savings for ELDC over the next 10 years and a further £500,000 has already been shaved from senior management costs as part of £5.7 million in total savings already made with a further £1.6 million planned. Coun Stephenson added: “The resources we do have available, although limited, will be used wisely and where they are most needed, including investment in developing our local economy further to support businesses that in turn can create jobs for local people.”

The secretary of state for communities and local government said the settlement was based on ‘self determination and financial independence, a move from the begging bowl to pride in locality’ and was the ‘greatest shake-up of local finance in a generation.’

Under the new system an estimated 70 per cent of local authority income will be raised locally, compared with just over half under the current formula grant.

Although some councils could face reductions of up to 8.8 per cent the average drop in spending power is estimated to be 1.7 per cent, which Mr Pickles says represents a ‘bargain to local authorities.’