City of Lincoln Council leader Ric Metcalfe insists there is another way out of recession other than more cuts to public services.
Chancellor George Osborne is poised to announce a fresh wave of austerity savings this lunchtime, said to include a 10 per cent cut in local government spending, which see the axe fall again.
The city council is already planning to save £3 million by 2016/17 – which includes scrapping the urban rangers and levying a £25 a year garden bin tax – despite saving £4.5 million since 2008.
On the eve of Mr Osborne’s spending review statement, Cllr Metcalfe told a council meeting last night that authorities up and down the country faced “very severe challenges which we don’t know at the moment how we will meet”.
His alternative recovery plan includes major public investment in housing, transport, education and green technology underpinned by a boost in demand and financed by publicly owned banks, lifting council’s borrowing powers to build more council home and creating a financial transaction levy, raising £25bn a year based on a tax rate of 0.01 per cent.
Cllr Metcalfe told the Echo: “Public services cannot continue to take this level of punishment, nor should they have to.
“The cut in local government spending will be on top of the 30 per cent cut in local council budgets which will see the city council’s net revenue budget fall from around £18 million to £12 million by the end of the period in 2017/18.
“This will continue to result in cuts in services that the council and the people it represents have valued over the years and utterly deplore having to lose.
“The current gap between national income and expenditure, the deficit, is not about excessive spending, it is about loss of tax revenues, and it is grossly unfair, but largely unseen distribution of the tax burden as between rich and poor.”
He added that the amount of tax going to the Government has fallen by 10 per cent annually in recent years due to higher unemployment rates, part-time working, tax evasion and avoidance and less tax income from the banking and financial sectors.
“Some large, well-known companies found to have used all sorts of methods for paying little or no tax – an absolute scandal that people are just beginning to recognise,” said Cllr Metcalfe.
The Chancellor is to announce £11.5bn of new cuts nationally for 2015/16.
The NHS and schools will be spared, but the Home Office will likely see its budget reduced by 7.7 per cent, with a 10 per cent hit on local government forecast.
Mr Osborne’s first spending review in 2010 covered four years and aimed to fix the deficit by 2014/15.
But a weaker than expected economic recovery means the target has been put back to 2017/18, with the Chancellor having to borrow £275bn more than expected.
Labour says it will stick to George Osborne’s plans for 2015/16 if they win the 2015 general election.