Thursday, 18 October 2018

The economy, stupid.

In 1992, in Bill Clinton’s Little Rock, Arkansas, presidential campaign HQ, strategist James Carville hung a sign that read
  • Change vs more of the same
  • The economy, stupid
  • Don’t forget health care
Shoot forward to today.
We’re certainly in for change and not more of the same.
However, Bill Clinton had a clear idea about the change he wanted to bring about in the USA, whereas Theresa May appears not to have the faintest idea where her Brexit will take the UK. We appear to be on an anarchic roller-coaster of uncertainty, which inevitably means that many companies are now delaying investment with the consequent impact on long-term sustainability, jobs and the national economy.
And, what about the economy, stupid?
Well, let’s put to one side the UK economy and focus on the English local government economy.
Earlier this year, the National Audit Office confirmed that government funding for council services in England had fallen by 49% since 2010. This week’s Cambridge University report, using IFS-compiled data, confirmed that the impact had been that the average council’s spending in England had been cut by 24% since 2010.
This compared to a 12% cut in Wales and 11.5% in Scotland. It appears that the Scottish Parliament and the Welsh Assembly have been able to mitigate the harshest cuts. Don’t be surprised if there is a renewed call to revisit the Barnett Formula. “Mrs Crankie’s free social care for Scotland being funded by Mrs May cutting all social care for many in England” might provide the basis for a populist campaign.
Further, the report confirms that the deepest cuts have been forced on the most deprived areas. Thirty councils have had cuts exceeding 30% (seven exceeding 40%), with only one (LB Westminster, whose net car-parking income alone exceeds the government grant of most authorities) not in the areas with the highest levels of poverty and the least ability to secure income through charges and regeneration.
Meanwhile eight authorities, all relatively wealthy, have had cuts of less than 10%. When the leaders of some of those authorities have been loudly complaining about the financial challenges facing their authorities, it does make you wonder how they would have coped with the scale of the cuts in Salford or South Tyneside. Unsurprisingly, Eric Pickles described this distribution as ‘fair’!
The government has already announced another £1.3bn of cuts in local government revenue resources. So, what are we to make of Mrs May’s loud Party Conference claim that ‘austerity has ended’, whilst whispering ‘from the next spending review’? As this is the third time she has announced it - and we have absolutely no idea what any Brexit deal or no-deal might mean – the answer is ‘probably not much’.
And how does this all square with Chief Secretary to the Treasury Liz Truss’s claim at the same Conference that
“We are not making cuts to local authorities. What we have done is given them more revenue raising power.”
When challenged about the veracity of this absurd claim, the Treasury said:
“The 2018/19 Local Government Finance Settlement confirmed the third of a four-year settlement for local councils over the Spending Review 2015 period. This settlement ensures a 2.1 per cent increase in cash terms in local government Core Spending Power between 2015/16 and 2019/20 – £44.7 billion in 2015/16 and £45.6 billion in 2019/20.”
As all the reputable fact-checkers have confirmed, a 2.1% increase in cash terms over that period is inevitably a significant real-terms cut.
All this is taking place in a context where the government is committed to phase out central grants, leaving council services to be funded through local business rates, council taxes and fees and charges which will inevitably increase inequality, especially between London and the south-east and the rest of England. Meanwhile, the government’s claimed devolution mitigation model seems to be hitting the buffers. The implications of further service cuts and a stuttering economy are serious for many communities.
One supreme irony about the impact of the global economic collapse and the UK government’s austerity measures is that, whilst the government and private companies have been able to benefit from low interest rates, local government has effectively been estopped from doing the same in respect of its long-term high interest debt, particularly from the 1980s and 1990s. To deter councils from, at its simplest, swapping high-interest debt for low-interest alternatives, the government forced the PWLB to impose financial penalties which made such swaps uneconomic.
It is now estimated that councils are being forced to pay – even after the payment of penalties - close to an additional £1bn in debt interest this year alone. If the government wanted to ease the financial challenges for councils, the Chancellor could do something about this in his forthcoming budget.
Without action, we can continue to expect to see more Sure Start Centres and libraries closing, road and park maintenance declining, and a falling capacity in trading standards and food inspections.
And don’t forget health-care…
The latest NHS statistics - with rising waiting-lists and waiting-times for investigations and treatment, falling numbers of GPs and increased vacancies – confirm that the NHS is not safe in this government’s hands.
How many more times is it possible to announce that our mental health services are unacceptable and that urgent action is being taken to address this?
Councils will soon be financially unable to over-spend on their budgets to support children’s services.
And the £240m for adult social care is just another hasty sticking plaster when we need short-term certainty as well as a long-term, widely-supported solution.

JUST don’t EAT!

Read any restaurant review in your local or national newspaper and it will tell you about the presentation and the quality of the meal, the culinary skill that has gone in to it, the decoration and comfort of the restaurant, and the customer service.
What you will rarely find is any reference to the hygiene standards and the likelihood that any meal consumed there will leave you with a debilitating illness. Of course, it is entirely likely that the reviewers have, very sensibly, already decided that they wouldn’t go to any restaurant that didn’t have a high hygiene rating. That’s certainly what I would do.
Food safety officers from local councils inspect restaurants and take-aways to check that food is safe to eat. At each inspection, they will be checking how hygienically the food is handled, the physical condition of the premises, and the processes used ensure good hygiene is maintained. That’s the basis on which an assessment is made and a rating is given.
Ratings go from 0 (urgent improvement is required) to 5 (hygiene standards are very good). Every business selling food should be displaying a sticker telling you the rating although, extraordinarily, this is still voluntary! You can also find out the latest ratings for any food premises in the UK at where you can also find an App for your phone.
What has shocked me this week is the revelation that a company that describes itself as ‘a top 100 FTSE listed company’, ‘a world leader in online and mobile food ordering’, and ‘on a mission to create the world's greatest food community’ has so little regard for your health.
The company’s platform includes and promotes more than half of the restaurants and take-aways in the country with a ‘0’ rating. But it doesn’t tell you that these restaurants have been independently rated as requiring ‘urgent improvement’ to their hygiene standards if they are to remain in business.
However, you will find ratings for each premise which run from 0* to 6*, with the vast majority rated 4-6*…including those restaurants independently rated ‘0’ for hygiene and food safety. Yet, as industry experts have confirmed, it would be quick, easy and not expensive for the platform to display these independent ratings. I leave you to speculate about the reasons why the company has chosen not to do so.
There are lots of excellent restaurants and take-aways whose owners and staff take food hygiene very seriously and who should not be undermined by those who show such a callous or unprofessional disregard for our health. Choose them for your next meal.
Meanwhile, until this ‘world leader’ takes our health seriously, my advice is JUST don’t EAT!

Wednesday, 17 October 2018

Universal discredit

Universal discredit
Yesterday, in the House of Commons, I asked the Minister for Work and Pensions a very simple question:
When universal credit is rolled out in Sheffield next month, will he guarantee that none of my constituents will be worse off?1
The Minister could have given a very simple answer – and one that thousands of Sheffield families wanted to hear. He could have just said ‘Yes.’
Instead, there was more ducking and diving than you’d see from the waterfowl at Rother Valley Park. His answer:
“it depends on people’s individual circumstances. This new benefit system is ultimately about making sure that we help people into work.”
So, let me just interpret this for you. He meant:
“No, of course I won’t give you a guarantee because many of your constituents will be worse off. That’s the incentive to get them to get a job, however insecure and low-paid.”
Let me be clear. Who would not support a simpler welfare benefits’ system than we have now? Who would not support a system which was designed to ensure that families in work are not worse off than similar families in receipt of benefits?
Although that is what is said about Universal Credit (UC)’s objectives, that is clearly not what is being delivered and thousands of families will be significantly worse off following a migration to universal credit from the current arrangements. Far from Theresa May’s ‘austerity is over’promise, we will see ‘additional austerity’ for many families and many communities.
UC was designed to lift people out of poverty but instead is leaving people in debt, rent arrears or forced to turn to food banks to survive. The Department of Work and Pensions’ (DWP) own research shows that 40% of claimants were still experiencing financial difficulties 9 months in to their claim.
The independent Institute for Fiscal Studies has said2 this week that ending austerity would cost a minimum of £19bn compared to current spending plans up to 2022-23 and even that would leave still mean £7bn in social security cuts.
That is why Secretary of State Esther McVey has had to admit that many families could lose as a result of transferring to claim UC. Half of lone parents and two thirds of working-age couples with children would lose the equivalent of £2,400 a year.
None of the current criticism is new. This is very similar to the findings – rubbished by Ministers at the time - of the independent Resolution Foundation3 in November last year which found that 3.2 million families are expected to be worse off under UC, with an average loss of £48 a week, and that lone parents who lose out will be £57 a week on average worse off.
In June this year, the National Audit Office (NAO) said4 that UC is failing to achieve its aims and there is currently no evidence that it ever will.
A wide range of organisations, including Citizens Advice, the Child Poverty Action Group and over 80 disability organisations have warned the government that its plans risk thousands of people losing support either temporarily or falling out of the system altogether.
There has been a massive rise in rent arrears – to social and private landlords – by tenants transferred to UC. Foodbank referrals have leapt more than 50% where UC has been rolled out.
This week, Ms McVey confirmed that the implementation timetable for universal credit has been put back again. It is now 6 years behind the original timetable. Two former Prime Ministers, Gordon Brown and John Major, have issued serious warnings about the impact of the roll out from next year.
The government has three choices:
  • Continue on its current course and introduce a new wave of enhanced austerity to many thousands of families and communities, or
  • Re-instate the £4bn planned cuts in UC resources to 2020 to prevent significant hardship, or
  • Scrap UC pending a significant redesign which will deliver the original ambitions, but require an appropriate budget.
The Chancellor has until his budget statement on 29th October to decide.