Fears mount over council funding

CRISIS talks have been held between Suffolk County Council leaders and the unions as fears rise that staff may have to be sacked to fill a predicted £17million shortfall in Government support.

CRISIS talks have been held between Suffolk County Council leaders and the unions as fears rise that staff may have to be sacked to fill a predicted £17million shortfall in Government support.

Deputy Prime Minister John Prescott's department is putting the final touches to its package of grants to local authorities, to be presented to Parliament in the annual tax statement in the first week of December but it is predicted the increase will be just 1.7%.

All members of staff and county councillors received an e-mail from the authority's Chief Executive Mike More yesterday warning that Suffolk could be facing a dire financial deficit of £17m.

Council tax this year was set by the outgoing Labour-Liberal Democrat administration, and the low rise of 2.9% was down to a 6.9% increase in grant from Whitehall and to Chancellor Gordon Brown's pre General Election sweetener of a one-off extra grant of £3million.

With health services under threat in Suffolk because of hospital and primacy care trust deficits, any reduction in social services provided by the County Council would impact on the elderly and frail.

Suffolk has a budget of more than £650million and 24,000 full and part time employees. With education exempt from any budget cuts - finance for schools is ring fenced by the Government - services at risk would be central administration, social care for vulnerable children and the elderly, roads and transport subsidies, libraries, the arts, and public and consumer protection.

Jeremy Pembroke, Leader of the County Council, said last night: “All the indications are that this year's settlement from the Government will not exceed 1.7%, which is less than inflation and rises in pay.

“I thought it right to warn the staff of the financial problems we are likely to face when drawing up next year's budget. We will work with the unions as we prepare the budget but I cannot rule out having to make redundancies.

“Raising council tax to fill the void is not an option. In any case, the Government will not allow us to and would cap our spending if we tried.

“Our Labour and Liberal Democrat predecessors raised tax by 18.5%, which quite rightly brought a massive public outcry,” said Mr Pembroke. “I am particularly concerned with people on pensions and fixed incomes - they are facing big increases in gas, electricity, and petrol prices and they must not be saddled with another over the top council tax increase.”

The Labour opposition group condemned the council move as “premature” and “scaremongering.” Deputy Labour leader Julian Swainson said: “The council does not know what level of grant it will receive for next year and is basing its forecasts on wild speculation.

“The time to communicate with staff is after the council is told by central government what grant it will receive next year because then we will know exactly what the financial position.

“Mr Pembroke and his colleagues have spread panic among the staff and this will lead to a loss or morale,” said Mr Swainson.

Liberal Democrat group leader Kathy Pollard said it would be “highly cynical” if the Government slashed council grants. “It will hit old people in Suffolk if social care is cut at the same time as NHS budgets.”