Council tax freeze blamed as thousands face jobs cuts

ONE of Scotland’s largest local authorities has called for an end to the SNP’s flagship council tax freeze as budget cuts led to another bleak day for local government job losses.

North Lanarkshire Council say they cuts are due to the Scottish Governmentt's council tax freeze. Picture: Google Maps

Edinburgh City Council indicated that the freeze should be halted to relieve the pressure on local authorities as North Lanarkshire Council outlined proposals to axe more than 1,000 jobs.

Union leaders last night said the North Lanarkshire cuts were “devastating” for an area still reeling from loss of jobs resulting from the collapse of the Scottish steel industry.

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They also said councils were being hit by the UK government’s austerity measures and the SNP administration’s insistence on maintaining the council tax freeze first imposed in 2007.

Plans to shed jobs in North Lanarkshire follow Edinburgh City Council’s announcement last month that 2,000 jobs are at risk in the capital as a result of the squeeze on local government spending.

In Edinburgh, city leaders yesterday moved to authorise compulsory redundancies as they battle to plug a £126 million black hole – action that has been forced on them because only around 1,200 workers have indicated they would be prepared to take voluntary severance packages.

Council leaders have also calculated that council tax would have to rise by 3 per cent a year from April 2017 to avoid even steeper cuts to public services.

They hope the move will generate around £21m in total between 2017 and 2020, which has also been factored into the £141m savings target set for the next four years.

Yesterday they warned the scale of planned cuts will have to increase “significantly” if flexibility to raise taxes is not granted.

Councillor Bill Cook, the city’s deputy finance leader, said: “Our budget figures assume that the council tax will be lifted in years two, three and four of the budget period.

“Our assumption is that there will not be a council tax freeze otherwise that £126m figure goes up, quite significantly.”

North Lanarkshire has made objections to the council tax freeze on the grounds that it takes power away from local representatives. However, the council still intends to implement it, because lifting it would result in a loss of Scottish Government money.

The local authority said it was exploring a series of cash-saving options, which if all are implemented will amount to the 12,043 workforce being reduced by 1,095 full-time posts.

Council leaders have drawn up the drastic plan to cut almost 10 per cent of its workforce in a bid to save £68.3m over the next two financial years.

A report to be considered by its policy and resources committee next week details the savings the council needs to find for 2016-17 and 2017-18, and outlines the options to be the subject of the consultation.

Councillors will be asked to accept more than £22m of savings already identified and approve a consultation in November to come up with another £45m cuts that are still required.

North Lanarkshire Council leader Jim McCabe said: “We continue to face a real-terms cut in the money made available to us by the Scottish Government and so we have no choice but to find more savings on top of the £110m we’ve been forced to save in the last five years.

“This becomes even more difficult when more than £200m of our budget is effectively ringfenced by legislation. Many of the options to save this kind of money are extremely unpalatable and will have real consequences for the vital services we provide to the people of North Lanarkshire. They will also have a real impact on our employees, who work so hard to provide those services.”

The financial settlement North Lanarkshire has with the Scottish Government includes ringfenced areas.

Among these are £174m to be spent on maintaining teacher numbers, a £25m council tax reduction scheme, £289,000 on Gaelic education and £3.8m for free school meals.

The council emphasised that it did not want to cut from the ringfenced areas, but made the point that they reduced the portion of their budget from which savings could be made.

John Young, Unison North Lanarkshire Council steward, said: “This is devastating for everyone living in North Lanarkshire and once again it is the low-paid and vulnerable, including children, elderly and disabled people, who will be the worst affected.

“North Lanarkshire Council are proposing to cut 10 per cent of the workforce which will cause chaos in our vital public services; £26m will be cut from the local economy and at least 600 jobs are under threat of privatisation.

“Unison will work with the council to fight every job loss. The Scottish Government has promised no compulsory redundancies and at very least we will expect them to stick to that. So far we have not had any guarantees.

“They can do more to mitigate the impact of these cuts like borrow at record low interest rates, refinance, use reserves, reform taxation, and make better use of pension funds.”

Last night the Scottish Government said it had provided an extra £70m per year to fund the council tax freeze every year since 2008-9.

A Scottish Government spokeswoman said: “Despite cuts of nearly 10 per cent to the Scottish budget from the UK Government, local government has been treated very fairly by the Scottish Government and protected from the worst impact of UK cuts.”