The Audit Commission predicts that many councils will struggle to get through the final two hears of the four year Spending Review.

The Audit Commission’s report ‘Tough Times’ highlights the challenging and uncertain times for councils as they cope with the second year of the four-year Spending Review. The savings needed are lower in 2012/13 than in 2011/12, but the cumulative effect is significant for many.

The number of employees in councils went down from 2,254,700 in Q1 2010 to 1,957,900 in Q2 2012. This is a fall of 296,800 or -13.2%. Most of these are job losses that arise from freezing vacancies, redundancies and natural wastage as a result of budget cuts. This compares with a fall of 10.4%.across the whole public sector.

A sizeable minority of councils had to make additional in-year cuts, seek additional funding, or restructure efficiency programmes in order to deliver their budgets.

The report says that auditors are concerned that 12 per cent of councils are not well-placed to deliver their 2012/13 budgets. They feel that a further 25 per cent will cope in 2012/13, but may struggle in the remaining years of the Spending Review period.