Newcastle MP challenges Chancellor over local Council cuts

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26 Jun 2013

Paul Farrelly, Newcastle’s Labour MP, confronted Chancellor George Osborne over the damaging impact of further 10% government cuts on local councils, services and community groups during today’s latest government Spending Review.

Newcastle  - and neighbouring Stoke-on-Trent - have been in the forefront of councils hit since the 2010 general election by cuts to local government, paring budgets back to the bone.

Additionally, following a six year sending spree from 2006 by the Conservative and Liberal Democrat coalition which led Newcastle until last year, the Borough has run out of reserves as a buffer to cushion the impact of budget reductions.

No indication has been given, however, that the individual circumstances of local councils will be taken into account when the axe is swung.

Speaking during today’s debate in the House of Commons, Mr Farrelly said:

‘From 2006, the Conservatives and Liberal Democrats who used to run Newcastle Borough Council spent all of its £50 million of reserves.’

‘So in dictating a further, indiscriminate 10% cut across the board to local government, how carefully has the Chancellor considered the impact, council by council, on their ability to deliver decent, basic series to local residents, and to give discretionary support to valued local community groups and organisations, as well.’

Newcastle-under-Lyme Borough Council warned the Government only last week that, by 2015, councils' funding from central government will have been cut by 33%, compared to the average reductions of 12% for Whitehall departments – and that important local services are certain to be affected as a result.

The previous Labour council administration left Newcastle debt-free, with over £50 million of reserves, which remained unspent following the transfer of its council housing stock to Aspire Housing over a decade ago and yielded extra income for the Borough.

Between 2006-12, however, the local Conservative and Liberal Democrat coalition spent freely on pet projects, while the town centre languished - and lost money with ill-judged deposits with an Icelandic-owned bank, despite warnings, just before the financial crash.

Over the last year, the now Labour-run Council has maintained a council tax freeze while allocating its little remaining reserves for essential capital investment projects – such as disabled housing improvements.

‘Councils have to provide certain services by law and today’s announcement – more cuts because the government has failed to get growth makes that all the harder,’ Mr Farrelly said.

‘What also concerns me is the future of the support to valued community groups and organisations which the Council chooses to provide, but for which it has no statutory responsibility. It is these that are likely to get caught in the crossfire and, even if the Chancellor cared, I don’t think he’s considered the consequences for a moment.’