Anatomy of the cuts

Submitted by Matthew on 12 January, 2011 - 12:48
Cuts

Since the financial crisis began in 2007 “the cuts” have figured in the consciousness of labour movement activists as something we knew were coming and that we must fight against, but had yet to affect our day-to-day lives. But now, with the Tories and Lib Dems in power, “the cuts” are becoming a more formidable reality. As the new year begins, Darren Bedford surveys where and how the cuts are biting.

Health

The key cuts figure for the NHS is £20 billion (euphemistically couched as an “efficiency saving”).

This will be made worse by a vast market-based restructuring of the system - called “Maoist” in its sweep by Vince Cable - which will dislocate and disjoint things. The precise impact these cuts will have on frontline health services depends largely on the budgeting choices of local trusts but, according to a Channel 4 News investigation, at least one fifth of them have already closed, or are considering closing, frontline services such as A&E facilities or maternity wards.

Countless Trusts have also been cutting back on more “minor” services which will nonetheless have a huge impact on patients’ lives. For example, NHS Sheffield will no longer offer routine tonsil removal, varicose vein treatment, routine hysterectomies, or lower back surgery. NHS North Yorkshire and York will not be offering IVF to any new patients and, although it has stopped minor surgeries at GP clinics, it has also delayed all non-urgent hospital treatment. It has also closed two wards at Malton and Whitby hospitals.

Estimates on the extent to which cuts will affect NHS staffing levels vary, with some analysts suggesting that nearly 30,000 health sector jobs could be lost. However, cuts are already beginning to have a concrete effect on staffing levels (which have also been hit by new government restrictions on immigration); an A&E department at Queen Mary’s Hospital in Kent has already had to close due to staff shortages. Unions in trusts such as NHS Oxford are estimating nearly 4,000 job losses.

Local government

Of the £6.25 billion of cuts that George Osborne announced immediately after the election, around one third was borne by local government funding, including a £1.2 billion reduction in local government grants.

The burden now is even worse, with local councils facing an average 4.4% cut in their central government funding. The disproportionate impact of these cuts on working-class areas is well-documented, with poorer towns or districts such as Hackney, Tower Hamlets and Hull facing the maximum 8.9% cut, while richer areas such as Hampshire, Richmond-upon-Thames and Buckinghamshire face cuts of less than 1%. The six most deprived councils in the country are all facing the maximum cut.

Even the Tory-controlled Local Government Association has called the cuts “the toughest local government finance settlement in living memory”. Many councils are closing down facilities such as libraries altogether.

Massive job cuts are on the way. Several local authorities, such as Sheffield, Croydon, Birmingham, Walsall, Neath/Port Talbot and Swansea, initiated mass redundancy procedures in late 2010, announcing plans to dismiss workers en masse and re-engage them on worse terms and conditions. The GMB union estimates that as many as 200,000 local government jobs could go in the 2011-2 budgets.

The GMB has already received notification of 90,000 planned full-time equivalent redundancies, and government figures show that up to 500,000 public sector jobs could be lost by 2014-15. Big job cuts are also planned across the civil service.

Education

The government plans a threefold increase in annual tuition fees for higher education. Following a parliamentary vote on 9 December, universities will now be able to charge up to £9,000 a year for degrees.

Other key cuts are a 75% cut to Higher Education (HE) teaching budgets and the abolition of the Education Maintenance Allowance (a maximum of £30 per week for students aged over 16). That cut will have a huge impact on the lives of working-class youth. For anyone who wants to obtain a modicum of financial independence from their parents while in further education, or for those from “non-traditional” backgrounds (including single-parent backgrounds), a £30 reduction of the weekly budget represents a real squeeze.

In terms of the higher education budget cuts, there is a grim parallel with local government funding cuts as the hardest-hit universities will be those with higher numbers of working-class students. The Open University, Nottingham Trent and Sheffield Hallam face cuts of £109, £67 and £63 million respectively (nearly 90% of the total budget in Nottingham Trent’s case).

Universities that offer only arts courses face 100% cuts, leading to fears of job losses and closure. LSE, SOAS and Goldsmiths are among 24 higher education institutions set to lose 100% of their public funding.

As with local authorities, it will be up to the institutions individually to fill the funding gap, both through charging higher fees and increasing corporate funding. That will mean greater business control of research and curricula, as well as potential job cuts. 2010 saw a number of local disputes over job cuts and Unite, which organises non-academic staff in higher education, puts possible job loss figures in the sector as high as 22,000.

Although the budget for school funding did not face an immediate cut, the merging of a number of school funding streams has resulted in cuts in some places as the single stream is redistributed. Pupils at schools currently receiving funding from a number of the separate streams (which include specific funding for, for example, one-to-one tuition) could lose out. Money for new Academies and free schools will be sucked out of mainstream schools.

The “sweetener” for schools funding was the “pupil premium” — additional funding for every pupil schools took from poor backgrounds (defined by the government as children whose parents have an annual income of less than £16,000). But the policy has been widely denounced as a con; it equates to just £430 per pupil in the first year and will only reach the promised total amount (£2.5 billion) in 2014.

Further education faces a 25% funding cut over four years, which lecturers’ union UCU predicts will lead to job losses. Course cuts, especially to courses without a direct vocational application, have been a constant threat for some time in the FE sector; that threat will increase under the pressure of funding cuts.

That the cuts can be resisted is shown by the fact that the government has been forced to climb down on plans to scrap the £162 million Schools Sports Partnership (see elsewhere in Solidarity). The abolition of the SSPs would have meant that thousands of, predominantly working-class, children across the country would have been denied access to regular sporting activity, particularly in less mainstream sports that they might not otherwise have had access to. The Tories also climbed down on plans to scrap funding to Book Trust, a charity that provides increased access to books and reading.

Benefits

A series of substantial cuts to welfare provision were announced in both the Comprehensive Spending Review and in Iain Duncan Smith’s white paper on welfare which followed it.

Means-testing restrictions on Child Benefit will be severely tightened, and Duncan Smith announced at Tory party conference that the initial cuts were part of a plan to subsume Child Benefit, Income Support and Working Tax Credits into a single, heavily means-tested, benefit. The state pension age will also be raised (from 65 to 66), but only in 2020 rather than 2016 as first trailed. The Coalition has said, though, that a further rise to 68 (planned by Labour for 2046!) will be brought forward.

There are also a number of direct cuts to housing benefits, reducing the amount it is possible to claim. People on Jobseekers’ Allowance who also claim housing benefit will now only be able to do so for a year. Even Tory mayor Boris Johnson described the likely effects of this as “a kind of Kosovo-style social cleansing of London”, forcing people out of areas where rents are higher. Cuts to housing benefit will leave people in private rented accommodation, on average, £12 a week worse off (£30 in London).

Nearly three million people currently claiming Incapacity Benefit will be transferred (in April of this year) onto the new “Employment and Support Allowance”. DWP estimates indicate that, under the new regime, 75% of them will be found fit to work and forced to stop claiming Incapacity Benefit and claim JSA instead (which, as previously mentioned, will effectively be abolished in 2013).

Under Duncan Smith’s proposed changes, in 2013, as part of the same scheme that will affect Child Benefit, Income Support and Jobseekers’ Allowance will be abolished and replaced with a single “universal credit”. Benefits will be cut for a period of between three months and three years if Jobcentre Plus thinks claimants have breached strict stipulations around attending interviews and applying for vacancies.

As well as the cuts to benefits, the DWP announced a plan in June 2010 to cut a further 2,000 from job centre staff by March 2011.

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