Local Authorities: Redundancies

Lord Vinson Excerpts

Wednesday 9th March 2011 Lords Chamber

[Baroness Hanham]

My Lords, capitalisation impacts directly on deficit reduction plans. Capitalisation is capital being used for revenue so there is no doubt, I think, that what my noble friend said in his letter was correct. The permission for capitalisation—which has now been increased from £200 million to £300 million, largely because of representations being made—is not intended to be the full way of meeting redundancy costs. Councils are meant to look to their own resources to make up most of what they need when there is a reduction of staff through either voluntary or compulsory redundancies.

[Lord Vinson]

My Lords, will the Minister agree that no Government can enjoy making cuts? It must be difficult to watch when some cuts are made inappropriately by local authorities, but the fact remains that, without these cuts, council tax would rise exponentially as it has done in the past. Would the Minister make it clear that the alternative to cuts is a rise in council tax? I wonder how popular that would be with the British public.

[Baroness Hanham]

My Lords, I point out immediately that the Government have made it possible for a council tax freeze for the next two years. Indeed you cannot have numbers of personnel rising exponentially every year, which happened under the previous Government, under which there was a widening out in the number of people employed in local government. There have to be, and there will be, rationalisations of services and new ways of doing things. Not all councils are lost in the depths of despair about what is happening, because this is opening up opportunities for them. However, I do not deny that it is a great hardship for people who are losing their jobs without the benefit of having anywhere to go, and none of us would reject that.