Vicki Morris reviews the cuts made so far by the Conservative-Lib Dem government, and the state of the anti-cuts movement.
The Conservative-Lib Dem Coalition Government formed in May 2010 quickly moved to make cuts, in an attempt, they said, to reduce the budget deficit that was largely the result of the banks bailout. The real effect of the cuts — and their aim — has been to slash the welfare state. We are still near the start of the process, but already the Tories and their Lib Dem partners are causing real suffering to working-class people.
Starting as they mean to go on
In May 2010 the new Government moved quickly to cut £6.2 billion.
The measures included cutting more than £1 billion from central government allocations to local government, and freezing civil service recruitment, and “efficiencies”. The civil service union PCS commented: “With some departments being told to axe hundreds of millions of pounds from their budgets for this year, the union does not believe this can be done without hitting vital public services”.
The Financial Times called the Government’s first budget in June 2010 a “bloodbath” and predicted “huge jobs cull looms as services hit”. The Institute for Fiscal Studies called the cuts the “longest, deepest, sustained period of cuts to public services spending at least since World War 2” and said “[The cuts] are likely to hit poorer households significantly harder than richer households.” The impact on the poorest families of welfare reforms would become worse with each passing year.
The budget said public spending should be cut by 25% by 2014-15. The budget for health would be frozen, not cut, but with demand and costs increasing, this too was effectively a cut.
The previous Labour government had planned to make cuts, but the Coalition Government increased the total of savings to be made from £52 billion to £84 billion (by 2014-5). These plans would cost the average household £5,000 a year by 2015-6, in lost services, reduced benefits, reduced pay, and increased VAT. The Treasury’s own figures estimated that the budget cuts would mean 1.3m job losses, 500,000 directly in the public sector.
The Government spelled out the details in the autumn 2010 Spending Review which covers the four years 2011-12 to 2014-15 and aimed at “balancing the books” by 2016.
Detail on the cuts:
• May 2010 “The first six billion”
• June 2010 “FT calls budget ‘this bloodbath’”
• October 2012 “An avalanche of cuts”
A key area cut is local government. Local authorities are reallocated a lot less money by central government, at the same time as the demands on local services rise.
The cuts are worse to poorer areas (many of them in the north of England), leading to council leaders writing panicked — and futile — letters to the Communities and Local Government Secretary Eric Pickles. The council funding settlement announced in late 2012 included an additional squeeze averaging 1.7% but some areas will be cut by up to 8.8%. Pickles said the settlement was a “bargain” and “The settlement leaves councils with considerable total spending power.” Council leaders of England’s seven biggest cities told Pickles: “there will be no money for anything but social care and refuse collection later in this decade.”
Whole authorities face going broke. For example, the Local Government Association considers Conservative-controlled West Somerset council “not viable” in the long term. The Council is looking at becoming a “commissioning authority”. Almost all of its staff would be transferred to private sector outsourcing companies who will deliver services on behalf of the council. The Council will shrink to a commissioning “hub”, with service levels agreed in contracts that will be hard to get out of should services not be up to scratch. Under such arrangements outsourcing company — Capita, Serco et al — will make profits from reducing the workforce, and cutting pay and conditions, as they are doing in the London Borough of Barnet, another Conservative administration embracing the “commissioning council” model.
Many councils set their budgets for the period to 2014/15 in 2011. The cuts in the first year were significant and noticeable but they will be worse again this year and in years to come. It is estimated that 70% of the cuts still lie ahead. And it is important to note that most of the forecasts of the amount of money the Government will have to spend, for example, through the proceeds of taxation, have been over-optimistic, leading to yet more demands of savings for the Government to meet its goal of a balanced budget.
Fight the cuts!
It was clear even before the 2010 election that the labour movement should be preparing to fight the cuts. The response, however, has been, alas, predictably and woefully inadequate. Trade union and Labour Party leaders do not have the passion and belief — and often the interest — in a proper fightback.
After the 2010 election, rank and file trade unionists, socialists and campaigners set up anti-cuts groups, but after an initial flurry of activity and protests at council budget–setting meetings, these died back.
The situation was made worse by some socialist groups trying to grab leadership of a united grassroots anti-cuts movement that did not yet exist. The money and effort put into building the competing fronts — SWP with its Right to Work/Unite the Resistance, Counterfire with its Coalition of Resistance, and the Socialist Party with its National Shop Stewards Network — has been a criminal waste.
There are signs of local anti-cuts groups reviving. In a few places, groups have continued growing, most successfully when they cohered defensive single-issue campaigns around threatened services, and provided a forum for wider discussions of strategy and political responses.
Networks such as the numerous bodies that have come together to organise National Libraries Day can be a valuable way for the anti-cuts movement to build protests and share information.
Most important are those campaigns and bodies that aim at changing the labour movement into what it needs to be if we are to meet the onslaught. Campaigns such as Councillors Against Cuts and rank and file groupings in trade unions, such as the Local Associations Network in the NUT, are precious initiatives that must be nurtured.
• Anti-cuts action: False Economy