COMMENT: Budget cuts will hit hard

Written by on February 13, 2014 in Opinions - 4 Comments

If you want to get a picture of the state of London in 2014 – the lines of power, the triumph of the rich, the sufferings of the poor  - you would do well to read Lambeth Council’s draft budget for 2014/15.

Payday loans, deep debt, children with no primary school places, a chronic shortage of social housing, high rents, and many more people in temporary accommodation than ever before –  all these and more appear on the pages of the proposed budget. A tone of despair, almost a loss for words, seeps its way into the proposals, because the coalition government is cutting such an extraordinary amount from the funding it gives the council – fifty percent – that it is almost impossible to see how to make a dent on any of these growing problems with a disappearing pot of gold.

“Given the anticipated reduction of up to 50% of our core Government funding”, goes the report, “it is clear that the traditional approach to deciding which services to provide and how to deliver those services cannot be sustained… The Council is trying to ensure that those things that are most important and valued by the people of the borough continue to happen. However it is important to acknowledge that with £96m less money to spend it is inevitable that the way in which services are delivered in the future will change.”

Yes, that was £96 million in the last sentence. It’s not news that the council has to make such massive savings, but it comes as a shock every time. That £96 million is not the total of cuts made – £79.5m has already been chopped from the budget – but is what needs to be cut in the next three financial years. “The remaining challenge takes us into unchartered territory”, says the draft budget. For the financial year 2014/15, the council has identified £25.4 million of cuts. It has found further possible savings of £32.4m for the years after that. But that still leaves £37.8m left to go…from where? No-one seems to know.

Presented at the financial scrutiny committee on January 21, the draft budget will go to vote in front of the council on  February 26.

Most people in Lambeth will suffer in some way from these cuts and savings – waste disposal, roads, healthcare, education will all have to change – but reading the report, it is painfully clear that it is the poor and vulnerable who will really hurt, because they will have nowhere else to turn (private renting, private healthcare, private advice services). In the breakdown of savings to be made, we learn that one in six Lambeth residents have been affected by benefits cuts and that “arrears and debts are increasing with Lambeth being one of the top three boroughs in London where payday loan usage is problematic”. But in the next breath, the draft proposes that “it will be very difficult to maintain current levels of service provision in the areas of advice, debt support and advocacy.” So there will be cuts of £160,000 to debt support services. There will, says the draft, “be a greater focus on preventing problems and intervening early before debt and arrears become unmanageable.” But with so many sinking into debt because of all the problems outlined everywhere else, it is unclear quite how the council with no money can really intervene early to help people broken by benefits cuts.

Perhaps the most crushing part of the draft budget is its section on housing. There is no pretence that the council will be able to provide enough social housing, or even close to it. London’s future is dominated by private rents, it seems. “There is very high demand for housing in Lambeth”, goes the proposal. “For most people, applying for social rented housing is not a realistic option…all those who need housing have to consider housing options, including private rented accommodation…there will be fewer services available and residents will need to be increasingly self-reliant in arranging their own housing.”

Working on the Blog for the past four years, it has become clear that one of the only ways to make sure gentrification doesn’t displace people is social housing. It’s something we have campaigned for time and time again. There will be some built when Somerleyton Road is developed. But that’s not enough – will we ever have the bravery to come up with true solutions to the housing crisis in London?

All this shows a silent group lurking in the draft budget – those who might actually profit from the cuts, those the council says it wants to attract to the area so that they can invest money in it. These are the private companies and individuals who have the capital to stump up where the council can’t. One common example of this is a developer who can afford to build a new mixed-use area consisting of retail and flats (some social or affordable, some private) and who then reaps the profit from the private rents.

So a London of debt and a London of profit, all held together uncomfortably in the Lambeth draft budget proposal for 2014/15.

Related: Lambeth council’s budget proposal: The facts 

Related: Council tax to be frozen amid £25m cuts

 

 

 

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4 Comments on "COMMENT: Budget cuts will hit hard"

  1. I live up Brixton hill February 18, 2014 at 11:58 am · Reply

    The history of Lambeth over the last 30 years has been one of gross profligacy. The council has always been very ideological, and extremely socialist—the union offices are directly opposite the Town Hall on Acre Lane. Lambeth has inclined towards large ideological social spending programmes and the tragedy of this is the reliance that this spending has created, and the false impression that there is an unending store of money.

    This article ignores Lambeth’s appalling record, which stretches back over decades and the extent to which profligate social spending has trapped people into a position of servitude from which they cannot cannot extract themselves when events necessitate it, ie, now.

    As for house prices and private landlords, the answer lies in either concreting over the green belt, or encouraging people to move en masse to other parts of the country. Both are presumably anathema to the politics of this article, which would see the first as environmental vandalism and the second as a disruption of valuable communities.

    Over all, this piece is far too sympathetic to Lambeth.

  2. Paul Newton February 14, 2014 at 1:57 pm · Reply

    £85 thou handed over to a private business for a two year project. And how much more to the other yuppie-friendly tarting up Brixton projects. Scores of evictions and selling of council property fast as they can when there’s a more than 20 thousand on the housing waiting list. Thousands paid out to security thugs etc.
    Those in social housing are much better off than private renters? You try living on the minimum wage or benefits!
    Lambeth Labour is simply making it obvious it’ll screw the poor into homelessness and then get them arrested. While falling over themselves to grovel at the feet of incoming rich whites and developers.
    Not exactly news.
    Dont hear the Councillors slashing their gravy train- or the obscene handouts to Council managers -
    either……

  3. TF February 13, 2014 at 2:15 pm · Reply

    The council needs to stops whinging about what it doesn’t have and starts talking about what it can do with what it does have. It has spent well beyond its means for years, so it is a story of returning to what is sustainable, not unreasonable.

    Those in social accommodation get a much better deal than those who have to rent privately that face a larger % of their income going to rent, less services and an almost constant threat of having to move. It’s time for more resources to be diverted to help those who don’t have the luxury of cheap, affordable taxpayer subsidised housing.

    • James February 13, 2014 at 4:43 pm · Reply

      That’s too harsh.

      But it’s true that those lucky enough to live in social housing pay much less than private tenants.

      I can’t imagine how young sharers afford the rents in Brixton.

      The problem is that everyone wants to live in London – and there is too little housing. So house prices, and rents, go up.

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