BARRIE GRUNEWALD: Austerity? It isn’t working

Council leader Barrie Grunewald.
Council leader Barrie Grunewald.

THE government’s spending review for 2015/16 last week provides clear evidence that their austerity programme just isn’t working.

Since the 2010 election the Chancellor George Osbourne has argued that the tough spending cuts would lead to economic growth and would address government debt.

However, we learned this week that as a result of the government’s policies since 2010, the economy has stalled and as a result government has got to borrow more and cut further.

What have they achieved? Nothing as far as I can see, as living standards are falling, business growth is in decline and local families and businesses are paying the price of their failure.

For the council we have had another imposed cut in our grant of 10 per cent. £10m and local government is having to bear the biggest budget cuts in the public sector.

Here in St Helens we have already had to find £50m worth of savings – losing 1,100 council jobs in the process to date. And let’s not forget the knock-on effect here on the local economy.

Because that’s 1,100 people who suddenly find themselves with less money to spend in local shops and at local businesses.

But now we have to find another £10 million. The Chancellor promised us two years ago that his draconian cuts would help to kick-start the economy – and that he would get the deficit down.

But last week’s spending review just gave us more of the same - and shows that the government don’t have any real plans to turn the economy around.

Here at the council though, the workload doesn’t diminish in line with the decreasing money supply. Just the opposite! We have to continue to provide services for children and very vulnerable people.

And with growing numbers of older people it means that demands on social services are growing.

Using some classic smoke and mirror trickery the government tried to soften the blow by ‘launching’ proposals for a number of infrastructure projects to get the economy moving.

By my reckoning though, this is now the third time projects like the Mersey Gateway and Crossrail have been announced during this government’s term of office.

Crucially, there was nothing in the government’s proposals that will help us build more affordable homes, improve transport links in St Helens or strengthen our economy.

What is really needed is support for local businesses and support for those on low incomes. There are many people in this borough who want to get into work, particularly many young people.

There was absolutely nothing in last week’s announcement that was going to help them do this.

The final kick in the teeth is that Liverpool City Region has just been told that its European funding is to be cut by 60 per cent. This is money that would have helped our private sector businesses provide the relevant infrastructure to stimulate the economy.

So in the space of a week we now find that we face a further £10 million worth of cuts in budgets and a big loss in European funding – money which has been directed to more affluent areas by the government – and there will be no help for the unemployed.

This council will continue to do all it can to boost local growth, but after last week’s announcement it’s getting harder and harder to do so.