The 2015 Spending Review and Autumn Statement: East of the M60’s Verdict

Praise for tax credits and police u-turn, but privatised schools, dastardly cuts and opposition party funding changes tell real story

Messrs Corbyn and McDonnell could claim a partial victory as plans to introduce cuts to tax credit payments have been scrapped. As well as criticism against the cuts by Labour and SNP MPs, 20 Conservative party MPs including David Davis (Howden and Haltemprice) were also against the plans.

Much speculation was made as to how the shortfall could have been addressed. Some pointed out possible rises in the Bedroom Tax; others suggested increasing the Universal Credit taper from 70p in the pound to eighty pence. In the end, departmental cuts to central government departments were initiated.

With recent events in France and concerns from Police and Crime Commissioners, plans to cut police numbers have been curtailed.

Further to the spending cuts planned for local government between now and the end of this parliament, a sneaky set of cuts is set to squeeze the already squeezed parts of Northern England. The two indirect forms of spending cuts – affecting the mainly impoverished Labour strongholds – entail changes to business rates, and the transfer of social care funding to local authorities.

Departmental cuts

Of the central government departments worst affected by the next round of cutbacks is the Department for Transport. This body not only manages our motorways, A-roads and B-roads. It includes funding electric hybrid buses that Greater Manchester has benefited from since 2009. This also includes VOSA and the Traffic Commissioners. Being as the departmental cuts are likely to involve redundancies and property sales, we could see fewer licences processed. We could see fewer inspections of buses, coaches and taxis meaning more UK Norths on the streets of Manchester. The time to renew a driving licence could be a longer process.

The DfT’s departmental cut of 37% will not affect an infrastructure programme which has benefited from a 50% rise. What hasn’t been made known is to whether or not subsequent capital projects would see privatised motorways. It is anticipated that the DfT’s capital projects programme would see Britain’s biggest road building programme since the 1970s.

As expected, swingeing departmental cuts will affect HM Revenue and Customs and the Department for Work and Pensions. Though Tameside has already seen its tax office close early in the previous parliament, HMRC’s cuts entail the closure of more local tax offices reduced to one office per region. Their aim is to increase digital tax collections with tax returns being done online. This not only complements plans for real time PAYE (and monthly reporting). It also – given central government’s delivery of IT projects in the last fifteen years – is carte blanche for hackers. Less tax revenues could be gained and fewer offices may put less computer literate people from using the online facility.

The DWP – already tangled in the botched roll-out of Universal Credit – could see less staff at local Job Centre Plus offices (or fewer offices). So far, recent changes have seen Disability Employment Adviser numbers halved with greater emphasis on Work Coaches. Within the course of this parliament, we could see more emphasis on digital job hunting. According to GOV.UK, the Mandatory Work Activity and Community Work Placements programmes have been scrapped.

In their place would be the Work and Health Programme, combining both aspects of the Work Choice and The Work Programme options. This not only combines the two programmes and reduces the number of contracts between the DWP and its primes (i.e Maximus, A4E, Seetec). It also coalesces with the work of the Behavioural Insights Team with scope for nudge theory techniques in combatting unemployment and underemployment. In Greater Manchester, this falls in line with the conurbation’s plan to manage its own version of The Work Programme.

Tax credit U-turn myths debunked

Though the tax credits cutbacks U-turn is likely to make tomorrow’s [26 November] front pages, there is strings attached to this announcement. Firstly, the people of Oldham, Wigan and Tameside would lose out on this, being Pathfinder areas for Universal Credit.

East of the M60 motorway in Tameside and Oldham, Housing Benefit, Working Families’ Tax Credit, Child Tax Credit, plus disability and out-of-work benefits, have already been added to the UC mix. Universal Credit claimants will still be subject to the cuts that have been scrapped in non-UC claiming areas.

Secondly, as well as being a divisive move, the postponement joy is likely to be short lived. The DWP has stated on GOV.UK that Universal Credit will be rolled out to a further 1.3 million claimants after this parliament [2020-21]. Who knows what cuts may be facing UC claimants after 2016?

Thirdly, the reversal in tax credit cuts will be cancelled out by capping Housing Benefit rates. The most worst off people will be (quelle surprise) Universal Credit claimants.

Making the poor areas poorer?

Two cuts in anything but name are likely to have a big hit on deprived areas, like most of our area east of the M60 motorway. Though the idea of devolving business rates to local authorities seem benign, it is set to intensify inequalities between parts of Greater Manchester – as well as Northern and South East England. In Greater London, it is a plan likely to make living in Hammersmith the preserve of rich two-bit wannabe oligarchs.

If business rate devolution is good for Greater Manchester and Greater London, other parts outside Britain’s first and second cities could lose out. Likely to tip Oldham and Tameside councils over the edge is a 56% cut in the Local Government Grant in 2019 – 20. With councils expected to make up the shortfall via full control of business rates and revenues, this would affect Tameside gravely due to its low tax base. Not only the lack of major employers in the borough, but also the number of Band A properties – a great number of which part of Housing Associations.

As a consequence, Tameside MBC will be forced to raise Council Tax by 2% to make up any shortfall next year. Having already faced cuts to its services, the transfer of NHS social care services to local authority control would squeeze council budgets furthermore. Given the poor health of people in Rochdale, Oldham and Tameside, this would have a more profound effect in Ashton-under-Lyne than in Richmond-upon-Thames (one of the UK’s healthiest areas). The news was greeted with despair on Twitter by Stalybridge and Hyde Labour MP Jonathan Reynolds.

As a sop to the impending cuts in local government grant aid, local authorities will be able to keep 100% of all income from property sales. Which could have been a better idea if suggested in 2010 rather than 2015. At present, Conservative run councils may be likely to benefit from this having had the least swingeing cuts in the last parliament. Many (mostly) Labour run councils have sold off a lot of real estate and moved libraries or customer service centres to cheaper premises, protecting public services.

Also masquerading as a benign policy is one to improve take up rates of Apprenticeships. In the last five years, the apprenticeship system has been diluted by cheapskate employers who have used them as an instrument to drive down wages. The £3 billion windfall tax on big businesses is a good though unoriginal idea. My fear is we could see the £3 billion funding squandered. This should have been coupled by standards to improve the quality of apprenticeships. Like a gradual rise to the 25+ Tory Living Wage from 18 years upwards (then the proper one at £8.25 per hour, or £9.40 p.h in London). Instead, pretty much ‘as you were’.

The £160 million travel card

This year’s statement saw little investment pledges of note, as ruefully observed by Shadow Chancellor of the Exchequer John McDonnell. Apart from plans to fund Operation Stack measures (£250 million without quibble for a traffic clogged part of Kent) was a £160 million plan to introduce a Northern English Oyster-style travel card.

The forthcoming project is likely to complement TfGM’s GetMeThere card for use in Greater Manchester. The cynic in me senses a back story. One where: 1) a number of regional schemes – TfGM’s effort and Merseytravel’s Walrus cards – could be substituted by a Northern Powercard; 2) ticket offices disappear from smaller bus and rail stations; and 3) a shoo-in for Driver Only Operation. In other words, Metrolink style operational conditions on local services, though minus its rolling stock, frequencies and level platforms.

Complementary to the plans is a notion where ticket offices could sell milk and ready meals. Though this could work well at the mini market on Bennett Street, next to Flowery Field railway station (unstaffed since opening), it will deskill the role of ticket office staff. This scheme was adopted by Merseytravel PTE in 2007 with the ticket office of Southport station.

Oh, and Northern Powercard is my name. If Mr. Osborne reads this entry, he could come to some arrangement whereby he could pay for three All Line Rover tickets and two tickets for the Caledonian Sleeper train.

Privatised schools by scoundrels?

Another sneaky measure from the statement entails fundamental change to English and Welsh schools. It was announced that council run schools would become “a thing of the past” in 2017. Which in proper English means:

Dear Cash Strapped Labour Council,

I see that you are short of a few bob for your libraries, markets and social services provision. Being as some of your schools are Academies any way, how about discussing terms to hive-off the rest? Another £200 million in the sky rocket would solve your financial woes.

Kind regards,

The Department for Education.

Obviously there is a more eloquent and lengthy way than this letter, but you get the message somehow.

In other words, this means the present government would like to abolish Local Education Authorities. Whereas many schools are council controlled, a rising number have become Academies. One school may be part of a chain of five academies, either ran by third sector bodies or the Cooperative Movement, or sponsored by businesses (see also City Technology Colleges and Grant Maintained Schools from the 1988 Education Act). Sixth Form colleges will be encouraged to become Academies – following a similar path by Technical Colleges since 1993.

What would this achieve? Firstly, more centralisation between academy sponsors and the Department for Education. Secondly, it is a mechanism designed to undermine collective bargaining and the teachers’ unions (see also Free Schools). Thirdly, in future years, a phased in abolition of LEAs and the loss of school governors would reduce accountability in our schools. Thus leading us to a fully privatised education system by 2025. Soon, all schools could be fee-paying.

If you wish to study at higher educational levels, there is bad news for student nurses. The bursary will be scrapped, thus forcing undergraduates to take out loans. The threshold for student loan payments will stay at £21,000 p.a till 2021, after the next parliament. This in spite of a consultation where 95% opposed retaining its present figure.

Whilst on the subject of threats to democracy, the Short Money (which is paid out to political parties for UK election campaigns and policy development) will be cut by 19% for opposition parties. This will have an adverse effect on the Labour party whose funding is dependent on Trade Union subscriptions as well as individual non-unionised members rather than big business. Similarly, the Scottish National Party will be affected owing to its record number of MPs in Westminster.

As for the police officers we were going to lay off, we may be needing the extra officers for our shores, let alone terrorist activity. Expect to see more shoplifting, more strikes and demonstrations and petty crime. The next five years is going to get worse, to a point where future progressive parties would be unable to do a System Restore to 1979 levels of public services. Or anything on the scale of Clement Attlee’s post-Second World War programme.

Little gems

The Autumn Statement wasn’t entirely doom and gloom for British tourists. Provision for free admission to the Manchester Museum of Science and Industry and other National Museums have been retained.

Our statement on the Statement:

 

There is only one word to describe this: risky. No amount of U-turns on tax credits nor the police would change that. In a nutshell, the gap between Altrincham and Ashton-under-Lyne – let alone Westhoughton and Wokingham – is set to grow. Changes in business rates will have adverse effects on deprived areas where a new public bin instead of a bus station is ‘investment’.

The areas least able to fight back against the spoils of Thatcher’s government, let alone today’s incumbents – have taken a significant hit. Before 2010, the areas that started to recover had their economic stuffing kicked out by the coalition’s cuts. And the present lot. None of the cuts to local government are being reversed nor reduced in scale to provide economic stimulus.

Though the U-turns on police numbers and tax credits may be welcome news, none of that will benefit Tameside and Oldham based Universal Credit claimants (who wouldn’t benefit from the latter). There is no extra support for disabled people (the awful Work Capability Assessments are still there). A Northern English Oyster style card is likely to render most ticket offices and conductor-guards obsolete.

From what we have seen, some pernicious announcements, though the mainstream media may focus on the two pearls from swine (Cops and Tax Credits). The devolution packages are still short on detail; changes to increase local control of business rates will prove to be divisive even at hyper local level (could the people of Stalybridge be asking for their cut of the rates from Ashton?).

Though it has been presented as being “better than expected”, the small print has yet to be revealed properly. We at East of the M60 thinks the push for academies will attract the greatest ire, closely followed by how some regions wouldn’t be getting the Tax Credit cuts reversed. Some of these stories are already appearing.

S.V., 25 November 2015.

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