Headlines: March 23rd, 2010

Councils are being urged to think bigger and to act more quickly to reduce costs so they can prevent funding cuts causing more damage than necessary to services and jobs. The stark warning comes today from the Audit Commission in a report which traces the effects of the economic downturn on local authority services.

“Surviving the Crunch” says most councils have been saved from the worst effects of the recession because of the Government’s three-year funding settlement, which ends in 2011. Councils receive an average two-thirds of their income from grants and the Commission says although the timing and extent of cuts in support are unclear, councils must prepare now for leaner times.

The best-prepared councils, it says, are taking action now to preserve services but others still have no financial plans beyond 2011.The recession has pushed up demand for benefits and social assistance while longer-term pressures on costs have continued. The Commission believes staff cuts may be inevitable but says pay freezes and other measures to keep down wage bills could preserve jobs and lessen the impact on services, families and local economies.

The Commission Chairman, Michael O’Higgins, said: “Cuts in public spending are coming. Councils that innovate and begin planning now for a tougher environment will stand the best chance of helping their local residents.” Councils, he said, needed to face the new reality and he added: “Some councils are using the last year of 2008-2011 planned funding levels to prepare for harder times ahead, but it is worrying that others are reluctant to look beyond next year.”