Council Budget Meeting - Third Sector Dialogue

On 21^st October GCVS joined other voluntary sector organisations to attend a meeting with Council Leader Gordon Matheson to talk about the financial position of Glasgow City Council  and some the challenges the city will face in the coming years.

The meeting took the form of a presentation by Councillor Matheson, followed by a number of workshops with representatives from Third Sector organisations and community groups. During the session Councillor Matheson discussed some of the difficulties the Council is facing due to the difficult financial climate in the UK. Some of the key messages are outlined below.

 As a consequence of reductions in Government funding:

• The Scottish Government’s budget will lose £3.7billion or 12.5% (£1.7billion next year alone).
• The Scottish Government’s budget won’t return to its current level until 2025
• Glasgow City Council budget savings of £115million over the next 2 years – will lead to a loss of about 3000 jobs
  • These 3000 job losses excludes teachers and ALEOs
  • The political decision has been made to have no compulsory redundancies
• An estimated one in 30 jobs will be lost in Scotland (4%)
• Scotland’s current unemployment rate is 8.9%

In addition to cuts in funding, income entering the city is falling:

• Cuts to Welfare Benefits will be an annual income loss to the city:
  • £1.3 million in Job Seekers Allowance payments
  • £3.2-£5 million in Child Benefit
  • £9.8 million in Housing Benefit

Total: £14 million to £16 million

• Transition from Incapacity Benefit (ICB)to Employment and Support Allowance (ESA) – potential loss: £42.6 million

Localised flexibility in benefits could become an option; the Secretary of State for Work and Pensions, Iain Duncan Smith, is looking to pursue this option.

It is estimated that the number of people seeking work in Glasgow could rise to 28 job seekers for each vacancy.

Income to Glasgow City Council is also falling. It is estimated that there will be:

• A £60 million reduction in capital receipts in the next 3 years
• Less income from property enquiries; planning fees; etc
• £1/2million income loss from home care charges
• Council’s work with Third Sector is worth over £175 million

Councillor Matheson identified the following challenges for the years ahead:

• Impact of the Recession:
  • Demand for some services increasing:
    • Council Tax/Housing Benefit
    • Money and employment advice
    • Social Work as there is an increase in family breakdowns
    • Anecdotal evidence of an increase in people contacting Health Services with depression

• Demographic Challenges:
  • Ageing Population
  • Reduced Workforce
  • New Glaswegians

He explained that Glasgow City Council has taken and continues to take steps to respond to these challenges, for example:

• Service Reform – LES 4 on 4 off working pattern; school mergers
• Tomorrow’s Council – Office and Workforce Planning; Absence Management
• Setting up ALEOs – Glasgow Life, GCSS ACCESS; City Property etc
  • The Council claims that £160 million has been saved in setting up ALEOs
• Potential joint working – Clyde Valley Review; ‘One Glasgow’ (shared services across local boundaries and between departments).
• Capital Projects – M74; Commonwealth Games
  • Glasgow City Council aims to increase tourism to the city by 60% by the Commonwealth Games in 2014.

Some additional options for responding to the current challenges were outlined as follows:

• An Increase in Council Tax?
  • The Scottish Government has a role here and would have to lift the council tax freeze.
  • Glasgow City Council would seek to increase tax by 3%, raising an additional £8 million
• Increased charges for services
• Close facilities or manage facilities differently
• Stop some services entirely
• Identify new ways of working

Reductions in funding to the Council will have a knock-on effect on funding to voluntary organisations and community groups. Councillor Matheson discussed this and offered his views on how the sector could respond to the worsening financial position in the city, including:

• Mergers
• Co-locations
• Shared Services
• Increased Efficiency

With reduced funding the council is trying to focus its available resources effectively and they have established three key priorities for service delivery; for the most part, funding will be concentrated on the following areas:

• Education and Early Years
• Skills and the Economy
• Targeted Support for Vulnerable Groups

Councillor Matheson explained that the third sector is important both to Glasgow and the City Council, but the current economic environment is making funding very difficult and the Third Sector will be affected.  He spoke of the need for the sector and the Council to work together to identify how we can best maintain the services that are most important to Glasgow’s residents and affirmed his commitment to continue his dialogue with the third sector to achieve this.

Tags: Glasgow News, Third Sector Interfaces