Three thoughts after the budget

The Chancellor yesterday said remarkably little about local government in his budget speech. We must assume therefore that little has changed and the need for cost savings remains as pressing as ever.

The budget, it seems to me, affects Suffolk County Council in three important ways.

Firstly there was no mention in the budget of a continuation of the council tax freeze that was in place during the last Parliament.  Many councils will therefore be looking to raise the tax to help to bridge potential budget deficits in years to come.  Suffolk County Council, for better or worse, has pledged not to increase council tax in the current council, so will need to find savings from elsewhere.

Secondly the 1% pay freeze on public sector pay going forward should help somewhat if it can be made to stick against a 2% inflation target.  Despite the fact that many of the council's activities have been outsourced, wages remain a large component of cost and a 1% rise will help to keep the inflation component of the forecast in check.

Finally, and possibly most importantly, the commitment to a compulsory living wage is, in the absence of compensatory government help,  likely to have a negative impact on SCC's finances.  This is not so much in relation to the council's own staff.   Recently the Council agreed to pay the current living wage to all staff at a cost of around £60,000, and future above inflation rises should be relatively easily accommodated.  Contractors however, particularly in the area of adult care, often do not pay the living wage, and it is generally thought that do so so would put unsustainable pressure on the care related costs.  Adult Care is an area that is already showing signs of stress, and is an area of high risk for budget savings going forward.

I cannot believe that the Government will ignore this position, and anticipate that further action to 'join up' heath and adult social care, to release efficiencies for both the NHS and local authorities, must be on the way.   I certainly hope that I am right.