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Chancellor’s autumn statement: Cuts ‘will hit services’
FURTHER cuts for local councils – announced in the Chancellor’s autumn statement – will affect frontline services in York and North Yorkshire, authorities have warned.
James Alexander, leader of City of York Council, said: “With a further two per cent cut in City of York Council funding in 2014/15, on top of already planned reductions, the Chancellor will have taken away 30 per cent of the council’s grant funding in just four years. Before today’s announcement, City of York Council has received a funding cut over two years equivalent to £70 off each person since the general election.
“Given the acute pressures on adult social care services, housing and the impact of flooding, there is no justification for a further cut in grant estimated at the equivalent to one per cent of our council tax income.”
North Yorkshire County Council warned that it faces a further £2.5 million in cuts. In a joint statement, council leader Coun John Weighell and chief executive Richard Flinton, said: “A four-year programme of savings totalling £69 million was approved by North Yorkshire County Council in 2010, as a result of the Government’s reduction in funding.
That figure was amended earlier this year, as a result of further announcements and indications, to provide a further £22 million saving in 2014-15. It now appears from the Chancellor’s autumn statement that the savings in 2014-15 will have to increase by a further £2.5 million.
“We will continue to do everything within our power to implement these savings with the least adverse impact on the people of North Yorkshire, but it is inevitable that the quality of service we offer will suffer.”
On a more positive note, the Chancellor did announce that York would be one of 12 cities to share a £50 million investment in superfast broadband, although the city will not be among those to receive a share of £120 million to help with flood defences.
Coun Alexander said: “The floods minister was here last week offering support and other ministers have personally pledged support to York so it is disappointing to say the least that the Chancellor has forgotten about York when it comes to flood defences. Any further funds would most likely first be spent in the Clementhorpe area.”
Susie Cawood, head of York and North Yorkshire Chamber of Commerce, welcomed the broadband announcement. She said: “In the knowledge economy of the 21st century, moving data quickly is just as vital as moving freight quickly. Similarly, upgrades to key parts of the A1 across our region bringing it up to motorway standard will be welcome by motorists and hauliers alike.”
Businesses and rural communities also welcomed the decision to scrap the planned 3p increase in fuel duty. Leah Swain, chief officer of charity Rural Action Yorkshire, said: “The impact of fuel costs in rural areas is disproportionate to urban ones and anything that can be done to alleviate this will be of benefit across Yorkshire.”
But Nigel Clemit, managing partner of York and Selby accountants JWP Creers, said businesses needed growth in the economy to bring back profits, which would then enable them to take advantages of positive moves such as reducing corporation tax from 22 per cent to 21 per cent.
Main points at a glance
• FUEL: The 3p-a-litre increase in fuel duty, planned for next January, is cancelled
• BROADBAND: Ultra-fast broadband expansion in York and 11 other cities
• BUSINESS: Corporation tax cut by one per cent
• ROADS: Extra £1bn for roads, including upgrading A1, A30, and M25
• GROWTH: Predicted to be -0.1% in 2012, down from 0.8% predicted in the Budget
• BENEFITS: Basic state pension to rise by 2.5% next year to £110.15 a week. Child benefit to rise by 1% for two years from April 2014. Most working-age benefits to rise by 1% for each of next three years.
• OVERSEAS AID: Promise to spend 0.7% on development to be honoured next year, but not exceeded.
No end in sight to austerity measures until 2018
Austerity measures are to be extended for a further year to 2018, as Britain’s faltering economy goes into reverse.
In a bleak autumn statement to the House of Commons, George Osborne announced a £3.7 billion squeeze on welfare and a £1 billion raid on the pensions of the wealthy, as he admitted that the nation’s deficit will not be eliminated until well into the next Parliament.
He sought to sweeten the pill by scrapping a planned 3p-a-litre rise in fuel duty which had been due to come in January, cutting corporation tax by one per cent and introducing changes to tax thresholds which will see earnings below £9,440 taken out of income tax altogether.
But he was forced to admit that the independent Office for Budget Responsibility now believes he will miss his target for debt to start falling as a proportion of GDP from 2015/16 – the year of the next general election.
Labour said that benefit and tax changes announced today mean that a working family with children on £20,000 a year will lose £279 a year from April. A planned rise in the threshold for the lower rate of income tax is to be increased by £235 to £1,335, meaning that the first £9,440 of earnings will be tax-free from April next year and bringing the Government “within touching distance” of meeting its promise to raise personal allowances to £10,000 by the end of the Parliament.
But 400,000 more middle-income earners will be dragged into the 40 per cent tax band by the process of “fiscal drag”, as Mr Osborne raised £1 billion by uprating that threshold by just one per cent.