A world in economic crisis

Great Britain – On the Brink?

Posted in unemployment, United Kingdom, welfare state by Aussie on March 10, 2010

100,000 council jobs could go as funding from central Government is slashed – Telegraph

One of the inevitable consequences of the expansion of government is that eventually, the point is reached where there is not enough money to pay employees because of funding cutbacks. The Australian experience under the Hawke-Keating government was a severe cutback in public service jobs during the 1980s. (I will write about that experience later.) Therefore it is no surprise to learn that the British system of councils is now contemplating having to cut thousands of council jobs as funding dries up.

It has been estimated that as many as 100,000 jobs could be cut from the councils over the next three years as Government spending cuts start to bite.

Tony Travers, and expert from the LSE said that the actual estimate from the councils of a 25,000 jobs cut was on the cautious side. He stated:

“Nothing like this has happened for a generation. For myself I’d be amazed if it was that low. I think it’ll be much higher. It could be as high as 100,000.”

The Telegraph reports the grim findings for council workers in this way:

A number of councils indicated that they will cut jobs more than 1,000 posts, as funding from central Government is cut back.

Eight authorities – Kirklees, Leeds, City of Bradford, Sheffield, Stoke-on-Trent, Nottinghamshire, Lincolnshire and Surrey – said 1,000 or more posts might be lost within five years.

Birmingham City Council, which did not respond to the survey, is planning savings of £69m in the next financial year, which could mean the loss of up to 2,000 jobs.

Shropshire Council has also said it is planning to cut more than 1,000 posts over the coming years.

There are fears that key local services such as libraries, nurseries, arts and leisure services are now at serious risk. Seven in 10 councils predicted they will have to cut spending by up to 20 per cent over the next three to five years

However, Mr Denham, the local government Secretary  argues that this will not be the case, and that the front line services will not be cut if efficiencies are to be found elsewhere. Read the rest here.

Exactly how these councils will obtain those effeciencies could be very open to debate. As I stated it is in fact inevitable that when Government becomes bloated there is a point where those bloated jobs have to be shed. John Denham does not seem to have the experience with regard to finding these other things that can be cut. In times of austerity it is true that the government has to seek areas that can be cut. Personally, I think a good place to start is welfare spending, especially in relation to the provision of housing for welfare recipients. By this I do not mean that there should be no housing available. Rather, I mean that eligibility for welfare housing could be tightened. Another area that could be tightened is that of immigration. If they cannot or will not find a job, do not give them welfare, send them back to their own country and let their own governments provide for them. The immigrant British population places a great strain on welfare spending, and it is helping to cause the present crisis.

However, it is my own experience in Australia that I also want to highlight, since I was working for one of the departments in the Australian Public Service that was subjected to a massive shedding of jobs during the 1980s. The particular department was Administrative Services. It served as an umbrella to a variety of groups such as Removals (for military families), Comcar (the provision of motor vehicles for politicians and top public servants), Australian Archives, AGAL etc. The department itself led the way when it came to the introduction of accrual accountin in the Public Service. However, there were a lot of jobs that could be performed better by the private sector. The Department itself was somewhat bloated at the time due to the provision of all of these services for military families, as well as for government politicians. The push started not long after I joined the department, or rather after two departments were merged together. The whole time that I worked in the department there was uncertainty because of the constant rounds of redundancies being offered. A very seamy side to these offers was the way in which people were treated, being given the cold shoulder etc. in an effort to force them out. By the time I left the APS the department had shed thousands of jobs… although to be fair some jobs were shed because the units were sold off to private enterprise. Some of these old units continue to thrive in the private sector more than 10 years later. The actual department disappeared after the 1996 elction of the Howard Government and of course many more people lost their jobs as a result of the change as some areas were merged into other departments. What Australia did get was a slimmer and less bloated government for a time – and then it started to expand again……

This kind of experience does in fact impact upon services that are offered to the public. It is inevitable that there is some kind of impact because there are simply no longer the number of employees available to serve the interests of the public. If you look at the kind of jobs that could be under threat in the U.K, then I would say that there is room for the private sector to take over the service e.g. nurseries, as well as arts and leisure.

Whilst the news is grim because of the inevitable reduction in employees that comes from a tightening of the budget, there should be room in the future for those same services to be provided by the private sector, rather than by government. However, in the current economic climate there does not seem to be the funding available for the private sector to take over those functions.

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