Councils say pounds 1.23bn shortfall will cost 33,000 jobs

LOCAL government employers yesterday admitted they will have to make compulsory redundancies, following estimates that more than 33,000 jobs will be lost in the next 15 months.

The Local Government Management Board, which represents councils employing more than 1.7 million workers, said the rate of redundancies was comparable with the number of posts that disappeared last year.

It contradicted government ministers, who claimed that finance was available to maintain services without redundancies.

Many of the job losses are likely to be achieved through voluntary severance, early retirement and vacancy freezes.

But a statement from the management board added: 'The scope for this is reducing, so authorities will increasingly have to make compulsory redundancies to balance their budgets.

'This is clearly a difficult time for local government. No one wants to see people made unemployed. The priority for local authorities is to maintain and improve services.'

A survey of 140 councils conducted by the Local Government Chronicle predicted a minimum of 33,000 jobs to be lost by April 1994. The study covered all but 2 of the 39 county councils and most of the London boroughs and large metropolitan authorities.

Jobs are to go in all service areas but the figures did not include those to be lost as a result of compulsory competitive tendering and schools opting out.

The management board said about the same number of redundancies had been declared in 1992 and the number of local government jobs had declined from more than 1.9 million in 1980.

Council chief executives said local authorities would need an extra pounds 1.23bn to maintain existing services and staffing. Many have cut their budgets to avoid compulsory 'capping' of their revenue support grants. The figures were rejected by John Redwood, local government minister, and the Department of the Environment. The department indicated that the cash available to local authorities would rise by 3.7 per cent in the forthcoming financial year.

Mr Redwood said the projections were a 'vague estimate' and many councils could achieve a good level of service without a single redundancy.

'We believe that, given sensible decisions on wages and efficiency, they can deliver the services without compulsory redundancies within the grant available,' he added in a radio interview.

Workers in local authorities are angry over the Government's 1.5 per cent public sector pay ceiling and said the job loss prediction underestimated the scale of redundancies.

Alan Jinkinson, general secretary of Nalgo, said the reductions would damage services provided to some of the most vulnerable members of society. 'They confirm as a hollow sham the government statement that its public sector pay policy will save jobs.'

Labour said 34,000 jobs and 74,000 training places would be lost as a result of the Government's decision to scrap the pounds 80m Urban Programme to assist poor inner-city areas.

Keith Vaz, shadow environment minister, said local authorities had spent 'millions of pounds' preparing bids for Urban Programme funding before it was announced in November that the scheme was to cease.