Councils poised to cut more jobs

Councils are facing a "perfect storm", says the LGA

Councils in England hit by the recession face a £4bn deficit and will have to keep cutting jobs, the Local Government Association has said.

Nearly 7,000 town hall jobs have been lost in the past six months, as officials face falling incomes.

LGA vice-chairman Sir Jeremy Beecham said more will follow in the next year.

Income from the sale of buildings and land is down about £2.7bn compared with 2007-08, and interest on cash deposits by £1.3bn, LGA figures show.

'Value-for-money'

The estimates exclude the effect of the Icelandic banking collapse, because councils have been able to defer the impact on their budgets until 2010-11.

Sir Jeremy said: "The tough economic outlook is forcing councils to take a look at almost every aspect of their finances.

A combination of depressed property prices and low interest rates has created a shortfall equivalent to £11m every day compared with two years ago, the LGA report said.

Meanwhile, councils have been helping more people struggling with mortgage payments and business rates.

"Almost 7,000 jobs have gone in the past six months alone and, as the effects of the recession continue to be felt, we fully expect councils to keep on cutting jobs over the course of the next 12 months."

COUNCIL HELP IN THE RECESSION 20% provide assistance with mortgage payments Almost 50% have set up credit unions 25% allow businesses to defer rates 70% help people receive all the benefits they are eligible for Source: LGA survey

"Town halls are being hit by a perfect storm caused by the recession," Sir Jeremy continued.

"Sources of income have dropped sharply at a time when more and more people are turning to councils to help them through tough times.

"At this time of repossessions and redundancies, even more people need the vital support that only councils can provide."

A Department of Communities and Local Government spokeswoman said: "It's right that councils support their residents in these times with value-for-money services so that every pound spent works as hard as the people who earned it.

"We are supporting them with extra funding, and the freedom and certainty to manage their own budgets as they see fit."

Councils were trying to reduce bureaucracy, she added, and "make their income work harder" by sharing resources with other local authorities to "avoid the need for cuts to services".

"This is what they should be doing, and what local council taxpayers rightly expect," the spokeswoman said.

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