We asked friend of the Inclusive Economy, Cllr Barry Kushner of Liverpool City Council for some thoughts in response to the government’s Budget announcement yesterday. In a personal capacity, this is his response.
Overall this is not an end to austerity, but more a consolidation of it. The planned cuts up to 2020 to Councils, police service, fire service, benefits and other parts of the public service go ahead, and there is no plans for a replacement of the funds that have been taken out of the public sector since 2010. That means the Government policy is to confirm that the level of funding that austerity has reduced public services to, is the level it will remain going forward. That means that the numbers of police, adult social care packages, fire officers etc is at the level that the Government considers appropriate for our people.
The funding gap in children’s social care is estimated by the LGA nationally to be £2bn. That is the cost of the extra numbers of children coming into care not only in Liverpool but across the country. Our budget is being stretched by £5m over and above what we expected to need to fund the needs of children in care tis year. And that is £5m over the growth that we built into our budget. The budget has set aside £85m to address these pressures over 5 years, which is £17m per year. This is a budget that ignores the need of children.
The budget has given £450m in extra money for road maintenance. It sounds a lot, until you consider that Liverpool needs to spend over £200m to fix the roads in our city alone. The £650m for adult social care may give our city £5-6m extra funding, as it did last year. But this only keeps the level of adult social care packages where they are now, which is over 50% less than they were 8 years ago.
Overall since 2010, the Tories have almost tripled our national debt, and borrowed more than any Government in our history. And what do we have to show for it? It has not been spent in infrastructure development (schools, roads, hospitals), but has had to cover the reduced income from taxation due to a sluggish economy, and has paid for a 60% corporation tax cut for the country’s largest businesses and for high income earners. At the same time squeezing the public sector, which is around 40% of our national income (GDP) has also squeezed the economy. There is less money for all the jobs and businesses that supplied and worked in the public sector. Liverpool has lost £500m per year from Council cuts and over £240m per year in benefit cuts. That means £740m less money circulating around the city than in 2010. This is writ large with the national economy.
The squeeze on wages has meant that this has been the slowest recovery from a recession in our history. That is why economic growth is only 1.4%. This is half what the economy grew every year for the 30 or so years prior to the crash in 2008.
That means we have higher debt, lower growth and reduced public services. That is what austerity has done to our country and what it has done to our city.