Council shake up plans in doubt

PUBLISHED: 09:00 20 October 2008 | UPDATED: 21:33 05 July 2010

A CONTROVERSIAL £100m bid to overhaul councils looks set to become a victim of the credit crunch as ministers come under orders to kill any costly spending plans.

A CONTROVERSIAL £100m bid to overhaul councils looks set to become a victim of the credit crunch as ministers come under orders to kill any costly spending plans.

Rumours are rife that the Treasury has ordered government departments to batten down the hatches in the wake of the banking crisis and the onset of recession - increasing the odds that the review in Norfolk and Suffolk, which has already seen councils spend millions making the cases for and against change, is heading for the long grass, at least until the other side of a general election.

The downturn could prove to be the final twist in the tortured local government review process - which took another dramatic local turn when Tory activists ditched county council leader Daniel Cox from his Wymondham seat.

Mr Cox, who had pursued a high-wire political strategy of urging Conservative colleagues to back a super council option including Lowestoft, while trying to assure them that it would not happen, admitted his ditching was linked to his handling of the unitary issue.

But ironically Mr Cox's belief that it would not go ahead appears to be on the verge of being proved correct.

Communities and local government secretary Hazel Blears also fuelled the rumours the review would be scrapped after telling council chief executives at a recent conference in Belfast that all options were on the table and refusing to rule out cancelling the current round of re-organisations.

The department of communities and local government is seen, along with the Ministry of Defence, as a prime target to make cuts after more than 100 councils including three in Norfolk saw millions of pounds frozen up in collapsed Icelandic banks.

Council area agreements - where authorities receive cash to tackle a range of issues ranging from boosting skills to tackling teenage pregnancies - are also going under the microscope because rising unemployment is expected to put extra pressure on services and see business rates fall.

Steve Morphew, leader of Norwich City Council, which is hoping to secure home rule with an enlarged city council, said he was going to write to Ms Blears urging her to stick with the review.

“It's not unreasonable to expect the government to go through all its priorities in the current circumstances, but if you look at all the financial cases that have been put forward, they have all shown substantial savings, and far from being something we shouldn't be doing, it is absolutely something we should,” he said. “I would be concerned if this was being looked at as a serious option - it would be very much the wrong option.”

In a statement a communities and local government spokeswoman admitted that all policies were under review and pointedly refused to confirm or deny that the review will be scrapped.

“In these fast-changing economic circumstances government of course keeps its whole range of policies under review,” she said. “As to the further restructurings in Norfolk, Suffolk and Devon, this is, at present, entirely a matter for the Boundary Committee.”

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