Partner Article

Hardest hit ? but getting on with it

South Tyneside Council leader, Cllr Iain Malcolm, comments on the latest slew of slashed council budgets.

Astonishing figures recently revealed by a national newspaper showed how northern, Labour-run councils like mine have seen their budgets cut by almost 10 times the amount lost by mostly Tory- administered authorities in the leafy South of England.

Analysis by The Guardian newspaper has showed that the government’s decision to slash local authority budgets led to average cuts of £160 per head in England’s 50 most deprived councils. This group includes the poorest populations in the country, where, on average a third of children live in poverty. South Tyneside alone lost £202 per head of population when the national average was only £49 - whilst wealthy areas of the country like Maidenhead and Windsor lost just £5 per head.

Moreover, the localisation of business rates will undoubtedly hit us harder than more prosperous areas in the south, and our own calculations suggest that the forthcoming welfare reforms will reduce the spending power of South Tyneside residents by over £55million per year.

The gross unfairness of all this is glaring, and says more about the government’s attitude to the regions than their warm words about ‘localism’ (in other words the freedom to make cuts to local services). But as the leader of a council ‘at the sharp end’, I cannot allow us to lose our focus on making South Tyneside an outstanding place to live, invest and bring up families. To achieve this we have radically changed how we operate as an organisation - whilst retaining our core values as a Labour council committed to protecting the most vulnerable.

My view is that no other council in the country has achieved as much, whilst being hit as hard. Despite not having significant financial reserves, we will have delivered over £75m of efficiencies over the last 3 years (a reduction in our net base budget of 20 per cent) and reduced our staff numbers by 25 per cent – and all this with no major service closures, council tax rises or compulsory redundancies.

This is an extraordinary level of saving for South Tyneside and it’s thanks to the commitment of our staff, elected members, trades unions and partners that we’ve achieved it, whilst continuing to deliver rapidly improving services to our residents.

Coping with these financial pressures, whilst keeping the show on the road, has been immensely challenging. We’ve redesigned our governance, restructured our services, and strengthened the role of elected members in strategic planning and commissioning services. Indeed, our chief executive Martin Swales has compared it to rebuilding an aircraft whilst it is still in mid-air.

Yet our focus on delivery has seen increased resident satisfaction and reduced crime, alongside record investment in new council homes and decent homes funding (and the largest solar powered social housing scheme in the UK at South Shields); remodelled and high-performing children’s and adult’s social care services - including the highest ever levels of foster care recruitment, and an outstanding Adoption service (rated second best in the country); as well as record GCSE and A level results to match the investment we made in world class school buildings.

However, we know that only a major uplift in prosperity will deliver our ambitious vision, so shifting the economic base of South Tyneside remains our over-riding priority. Growth must come from the private sector, but as Lord Heseltine’s recent report pointed out, our local government has a vital role to play in stimulating growth: ensuring the infrastructure is in place, that we have highly skilled local people; and the area is attractive to businesses and individuals. That is why South Tyneside Council continues to make major investments in spite of the difficult economic situation.

Since 2009 we have made encouraging progress, with more local residents in employment - which includes the 600 employed by BT South Tyneside, our strategic partner, who have recently located to a £10m business centre on our riverfront. But there is still more do. So our ‘Supply South Tyneside’ initiative will increase our annual spend with local suppliers by £29.5m to £80.5m by 2017; we will redevelop all our town centres and improve our leisure offer; and we have developed an employment grant scheme to support more businesses to recruit local apprentices.

The towns of South Tyneside exist because of the river, so we are playing to our strengths as the principal Northern gateway for sub-sea marine and offshore renewables, located on the intersection of two great ‘economic arteries’ – the Tyne and the A19 motorway – and next door to Nissan, the centre for electric vehicle manufacture in the UK.

We need to ensure that our residents benefit from these developments, but we can’t do that on our own. That is why we have redesigned the South Tyneside Partnership – which I chair – to include a ‘best in class’ Economic Regeneration Board that brings together major local employers, like Nissan, Siemens, Port of Tyne and Barbour to shape our ‘Sectors, Skills and Spaces’ strategy. This will guarantee that we have the infrastructure, local skills and international links to underpin our job growth ambitions.

I have been delighted at the contribution of all our partners, and we have already developed a pre-apprenticeship academy in engineering with South Tyneside College and an Apprenticeship Taskforce (with target of 200 new apprenticeships for unemployed 18-24 year olds over two years).

Working with our partners across the whole region will be just as important, so we have played a key role in the development of the North East Local Enterprise Partnership. We are also keen to see how Lord Adonis’s Independent Economic Review, and access to European funding – through our regional leadership of the EU agenda – can help deliver the infrastructure that will bring about sustainable economic change. As a regionalist, I want to go further, and explore how northern councils can work together through a combined authority model to pool resources and deliver the growth the region needs.

A double-dip recession and substantial cuts have made difficult spending decisions a necessity for councils like South Tyneside. However through our own carefully targeted investment, and working collaboratively with local partners, other authorities and the LEP, we can still create much-needed jobs, boost local economies and stimulate growth.

So, although the unfair financial settlement has been a major setback, we remain as determined as ever to realise our ambitions. We may be the hardest hit, but we’re getting on with it.

This was posted in Bdaily's Members' News section by South Tyneside Council .