North East councils face more cuts from George Osborne

Councils in the North East will be able to improve services despite suffering another round of dramatic spending cuts this week, Conservative Party chairman Grant Shapps has insisted

Chancellor of the Exchequer George Osborne holds up his ministerial red box
Chancellor of the Exchequer George Osborne holds up his ministerial red box

Councils in the North East will be able to improve services despite suffering another round of dramatic spending cuts this week, Conservative Party chairman Grant Shapps has insisted.

He warned authorities to prepare for a cut of 10% in funding from central Government, on top of the 26% imposed since 2010, but said that making do with less money had encouraged local authorities to consider “thoughtful and creative” ways of improving services.

The Tory Cabinet Minister was speaking to The Journal in the run-up to the Government’s spending review, to be launched by Chancellor George Osborne tomorrow.

He highlighted plans to pour money into infrastructure projects such as roads, rail lines and bridges.

And he said the economy had “turned a page” as the danger of complete financial collapse had passed and the Government could now concentrating on driving growth.

In total, the Chancellor is expected to announced £11.5bn in spending reductions over four years, with councils losing 10% of the funding they receive centrally, on top of the cuts already imposed.

Mr Shapps said: “When we said we would reduce the budgets by 26% over four years, we were told that councils would be going bust by this stage of the Parliament. I know that not a single council has gone bust by this stage.

“A lot of that is a credit to them because they have managed to cut their cloth far more wisely, or to find efficiencies.”

Councils had improved the way they delivered services, he said.

“And I think you could say the same of lots of areas of public life like the police, who have managed on smaller budgets but cut crime as well.

“Do I think local councils are at the end of the road of efficiencies? No, I don’t. There are still plenty of efficiencies that can be enacted.”

Mr Osborne will also announce billions of pounds of new spending on infrastructure, with fuller details to be released on Thursday.

A multi-billion, six-year infrastructure investment programme to be launched by Danny Alexander, the Chief Secretary to the Treasury, will include building tens of thousands of extra affordable homes.

Details of the Single Local Growth Fund which will be devolved to Local Enterprise Partnerships will also be revealed this week.

Mr Alexander also revealed yesterday that around £200m will be found in the spending review to fund a massive expansion of an intensive programme to tackle troubled families.

The cash will be used to give 400,000 high risk families specialist help to deal with their problems before they spiral out of control.

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