Sunday, 14 November 2010

Comprehensive Spending Review and it's impact on Hackney - an update

The impact of the comprehensive spending review on Hackney is now becoming clearer.

It now appears that the majority of cuts from central government funding to Hackney Council will be made next year, rather than being spread evenly over four years as initially indicated. Specifically, the information that has currently been released by the Government suggests that Hackney will experience budget cuts of around 20 per cent in the first year, not the 7.25 per cent initially stated by the Coalition.

If correct, this could mean a reduction in government funding to Hackney Council of between £50 and £60million in the next financial year (2011/12). This means that, unless there are further funding streams that are still to be revealed by the Government to make up this shortfall, the Council will be faced with having to make devastating decisions.

In the lead up to the Chancellor's announcement, Hackney Council had successfully found savings of some £26million, some 6-7 per cent of its budget, to be ready for the Coalition Government's reduction to next year's local authority grants. In identifying these savings we intended to buy ourselves a 12-month breathing space to avoid snap front-line service reductions. This new information suggests that the buffer that Hackney has built up will be swept away by the massive cuts over the next year.

The Prime Minister, the Chancellor, and the Secretary of State - in writing to all council leaders - have confirmed that the average loss in real terms to local authorities would be around 7 per cent each year over the next four years. However the specific budget cuts on a council by council basis are yet to be announced. Extra grant funding has been given to areas like Hackney in the past for good reason, but we will now potentially see reductions in grant of more than twice the national average.

Hackney's Mayor and Councillors continue to work hard to protect Hackney's budget however we can, and we will ensure the budget cuts we will be forced to make will seek to protect the most vulnerable in our community as best we can. However, the scale of cuts currently being proposed by Central Government mean that it will be impossible for us to avoid making cuts to front-line services.

We will continue to provide more information to Hackney's residents as and when it is available to us.

Please do get in touch with us if you have any questions and we will do our best to answer them as best we can.

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