‘Efficiency Savings’ Are Massive Spending Cuts

PCS banner on the TUC’s ‘Put People First’ demonstration on March 28 in London, just before the G20 summit
PCS banner on the TUC’s ‘Put People First’ demonstration on March 28 in London, just before the G20 summit

The Public and Commercial Services Union (PCS) branded the efficiency savings announced in Wednesday’s budget as spending cuts which would damage services and lead to job cuts.

Civil and public services have already been hit by spending cuts in real terms and ‘efficiency savings’ which have lead to over 80,000 job losses and hundreds of office closures.

Key areas such as tax, jobcentres and justice have all been affected.

Twenty five thousand jobs are to go and two hundred offices to close in Her Majesty’s Revenue and Customs (HMRC) by 2011.

Five hundred jobcentres and benefit offices have closed over the last five years and the justice system is in danger of delays and backlogs as the Ministry of Justice faces a year-on-year cut to its budget in real terms.

Mark Serwotka, PCS general secretary, said: ‘With this budget the government have conveniently forgotten their promise that going further than the Gershon efficiency review in 2004 would put the delivery of frontline services at risk.

‘The efficiency savings announced today, like the others before them, are spending cuts which will result in job cuts and poorer services.

‘The Chancellor’s claim that the government won’t cut their way out of recession will ring hollow with 4,000 people working in the Land Registry who are in danger of losing their jobs.

‘The Chancellor had the opportunity to spell out how he would chase the £21.5 billion worth of uncollected tax and £25 billion lost through tax evasion as well as stopping the billions wasted on consultants and failed PFI projects.

‘Instead he gave the green light to a sell-off of the family silver by accepting recommendations from Margaret Thatcher’s privatisation guru.’

Serwotka concluded: ‘As the recession bites deeper and more and more people become reliant on public services, the government should be investing in public services rather cutting them.

‘Demand in the economy needs to be boosted through increased spending and investment rather than spending cuts.’

The University and College Union (UCU) welcomed increased investment in further education in the budget but the government needed to recognise that quality training to even more students could not be delivered without proper investment in staff and buildings.

It also expressed concerns that the Chancellor did not take the opportunity to offer more for the higher education sector.

Darling pledged £300 million for college building projects and an extra £250 million in 2009-10 and £400 million in 2010-11 to provide an extra 54,000 places in sixth form and further education colleges next year.

UCU general secretary, Sally Hunt, said: ‘Colleges can play a key role in helping to train people, especially those made redundant or unable to find work, but they need proper infrastructure and support.

‘We welcome the additional funds to try and resolve the recent college buildings fiasco.

‘However, this in no way compensates the money already spent by colleges on approved building projects, which will seriously undermine those colleges’ efforts to deliver government priorities.

‘Most importantly, additional training for even more students simply cannot be delivered by an already overstretched staff.

‘Further education lecturers work some of the longest hours in the UK and without an increase in staff the quality of education and training will be seriously compromised.’

Senior civil servants union FDA’s general secretary Jonathan Baume said: ‘The Chancellor has delivered a somewhat more realistic assessment of the dire state of the UK economy than the PBR last autumn, but it still appears to share some of the latter’s rosy tints given, for example, today’s IMF forecast.

‘Importantly however, he has shied away from explaining the full impact of the economic crisis on public services.

‘Given the truly awful state of the public finances, even if the UK begins to pull out of recession later this year, its public services will remain in recession for perhaps a decade or more.’

Baume warned: ‘The Chancellor’s proposed reduction in expenditure growth to 0.7 per cent means that very difficult decisions will need to be taken even if his inflation and growth forecasts are delivered. And if these forecasts prove to be unrealistic then the consequences will be profound.’

Construction union UCATT gave a cautious welcome to measures announced to kick-start housebuilding.

However UCATT is seeking further details about the proposed schemes, as it believes that the best way to restore confidence in the industry is to build new social housing for rent.

Housebuilding is the worst affected part of the construction industry.

Allowing councils to once again become the driving force for providing social housing would mean that thousands of skilled construction workers could return to work, confidence would return to the industry and the construction products industry which has also suffered would be revitalised.

Alan Ritchie, General Secretary of UCATT, said: ‘It is right for the government to target housing. Over a million people are in desperate need of good accommodation.

‘However as money is limited it should be spent on the most effective way of getting construction workers back to work.

‘That is by building new homes for rent and not propping up speculative private housing developments.’

UCATT are also warning against any further encouragement for shared equity (part buy, part rent schemes).

Many councils and housing associations have encouraged the building of these types of property, to meet social housing commitments. The properties remain expensive and the credit crunch has meant that mortgages of these properties have been difficult to obtain.

As a result several housing associations are facing financial meltdown because they are unable to sell properties. This has the knock-on effect of reducing the capital available to invest in new properties.

UCATT welcomed the government’s announcement that the minimum redundancy payments will be increased from £350 to £380 a week.

Unite joint general secretary, Derek Simpson claimed: ‘Alistair Darling had to deliver the toughest budget in decades but he has positioned Labour as the party for jobs and social justice while exposing the Tories for being the party of cuts and inequality. 

‘The Chancellor’s announcements on tax, the scrappage scheme and employment puts Labour back on the side of working families. Borrowing to shorten the recession is the right action to protect our economy and our members’ jobs.

‘We welcome the government’s action but manufacturing workers need more support now because once those  jobs go they will go for good.’ 

Unite joint general secretary, Tony Woodley added: ‘Any scheme to stimulate demand for cars is welcome, but the UK can not afford to lose the workers who build them.


‘Those on the right who believe it is the time for cuts are simply wrong. If they are allowed to have their way we will come out of this recession with a manufacturing base not fit for purpose.’ 

Christine Blower, NUT Acting General Secretary, said: ‘I am glad that the Chancellor has stated that he remains committed to spending in schools and hospitals.

‘Slashing investment in public services would have been counter-productive, feeding inequality and poverty.

‘Fairness must remain at the heart of the government’s agenda, with the Chancellor keeping his eye on the long-term goal of social justice despite the poor financial situation.

‘The additional funding for 16-17 year olds is welcome. The prospect of up to 50,000 teenagers left with no sixth form or college place this September was wholly unacceptable.’

She added: ‘The government is unlikely now to meet its own target to halve child poverty by 2010 which means children across the UK will continue to face the costs of social disadvantage, exclusion, poor health and nutrition.

‘At a time of economic difficulty investment in education and training is central to the economic and social well-being of the nation.

Unison General Secretary, Dave Prentis, said: ‘This budget has revealed the extent of the damage done to the economy and public finances by the greed and irresponsibility of the under-regulated financial sector.

‘Future spending plans have been revised down again and the government’s best ambitions of reducing child poverty and building world class public services now look in doubt.

‘It would be a big mistake to make our essential public services – schools, hospitals and the care of the vulnerable in our society – the whipping boys for private failures, or to pay the price for the excesses of greedy bankers and speculators.

‘We will look for assurances that public service workers, who have gone through 18 re-organisations in as many years to improve those services, will not be made to pay the price for the failures of others.’

Prentis pledged: ‘We will resist damaging cuts to public spending.’

He added: ‘Much progress has been made in the NHS and public services over the past few years, it would be self-defeating to throw all that away by cutting spending now.

‘It’s a myth that local government or any other service is stuffed with bureaucrats doing nothing.

‘They have made well in excess of three per cent efficiency savings called for by the government over each of the past three years. Independent studies have shown that you cannot extract any more without damaging services for the public.’

l The world economy is set to decline by 1.3 per cent in 2009, in the first worlwide recession since World War II, the International Monetary Fund (IMF) said on Wednesday.

It now projects that the UK will see its economy shrink by 4.1 per cent in 2009 and by a further 0.4 per cent in 2010.

Other major economies are predicted to shrink even more, with Germany declining by 5.6 per cent, Japan by 6.2 per cent and Italy by 4.4 per cent in 2009.

The IMF said this represents ‘by far the deepest post-World War II recession’ with an actual decline in output in countries making up 75 per cent of the world economy.