MP WRITES: A north-south divide

Chancellor George Osborne
Chancellor George Osborne

The government often likes to say that we are all in this together.

They have an economic policy to pay off the deficit and although George Osborne has missed his target of doing so within four years, they will try to achieve this through a combination of spending cuts and tax rises. There will be more emphasis on spending cuts.

Local government will play a big role in this. At the moment, councils up and down the country get about three quarters of their spending from central government. The remaining income is generated through Council Tax.

The Association of North East Councils recently came to Parliament to speak with MPs about the impact of government policy on local councils.

They brought a colour-coded map with them which showed the level of cuts in each local authority for the lifetime of this Parliament, that is, the financial years 2010/11 to 2015/16.

The map was stark. In parts of the south, local authorities have to find savings of less than 2 per cent.

In some authorities, there is an actual increase in government spending.

The further you go north, the harsher and more difficult it becomes.

Hartlepool and neighbouring authorities have had their budgets cuts by over 20 per cent, equating to many millions of pounds in the local economy. 

The average change in spending power for a local authority in England over the lifetime of this parliament is £300 per dwelling.

In the North-East that figure is £467.

Hartlepool Borough Council is the worst affected, with a loss of £680 per dwelling in the run up to 2016. That equates to £29m.  

Middlesbrough Council aren’t far behind, with a loss of £676 per dwelling but as they are a much bigger council, that means a loss of over £41m. In contrast, Wokingham gets a 1 per cent increase in its budget – they have an extra £20 per dwelling to spend.

The effect of this is and will be huge.  

Businesses in the North-East are concerned because the reduction in jobs and wages and general reduction in spending power in the area will have a big impact.

It will be keenly felt by the people in this town. We all rely on services from the local council. I don’t run the council, but they will continue to have to make difficult decisions over the next couple of years which will directly impact upon the quality of service residents receive. 

Councils of course have a responsibility to be as lean and efficient as possible. They need to use the money they receive in an effective way.

People may criticise the council for the withdrawal of this or that particular service, but they also have to be aware that blame lies solely with central government.

Given the contrast in the treatment of councils from the north with those in the south, it’s very clear that we are not all in this together.