Huge pressure for job cuts on councils' £30bn paybill

Wednesday, 7 December 2011 8:51 AM

By Alex Stevenson Follow @alex__stevenson

Councils have no choice but to undergo "major restructuring" to cope with public spending cuts, the Audit Commission has warned.

Local authorities have already cut 145,000 jobs in a bid to cope with lower funding levels, but many of these have been voluntary.

With a total workforce of 1.6 million people, more compulsory redundancies are inevitable as councils bid to cut their £30 billion annual paybill.

The Audit Commission's joint report with the Local Government Association
warns that local authorities will have to accept major restructuring to maximise savings and protect key savings.

"Councils are often the largest employer in their area, so downsizing can affect the local economy," Audit Commission chairman Michael Higgins said.

"Local government is a people business, with staff costs accounting for almost half the money spent by councils, so they need to be aware of all their options and the tools at their disposal."

Town halls which make urgently needed cuts to satisfy short-term needs should continue to plan for the future, the report warned.

"Councils have had to take some tough decisions in order to bring their workforce costs down, continue to provide essential services and minimise job losses," LGA chair Sir Merrick Cockell said.

"This is part and parcel of sound and responsible financial management... councils have been ahead of the game in making savings and have already started to reduce workforce costs. Unfortunately, job losses are inevitable given the scale of cuts."

Local authorities could seek to avoid redundancies by freezing recruitment to unfilled posts, cutting overtime, bonuses and out-of-hours payments, cut spending on agency workers and consultants and extend part-time hours, the report suggested.

Tags:
• local government
,
• spending cuts
,
• unemployment