Public spending will be slashed to help country out of recession

That was the view of at least one local council last night as unions warned of tough times ahead.

All political parties have admitted that public spending will be slashed to help the country move out of recession – a move that is expected to hit the region particularly hard.

A fifth of British people are employed by the public sector, but in the North-East the figure is almost double that at 37 per cent.

Experts estimate that jobs in councils, the emergency services, the NHS and the civil service make up as much as 50 per cent of the region’s gross domestic product.

Councillor Peter Scott, Redcar and Cleveland Borough Council’s cabinet member for corporate resources, hinted that council taxes could rise to cover the deficit in Government funding.

“Shortly, we are going to be consulting with residents to discuss the council tax for next year,” he said.

“That is going to be very difficult because we are aware that people are finding it hard at the moment, but we will do our best to support residents and businesses through this troubling period.”

In North Yorkshire, two councils recently agreed to combine services to cut costs.

Peter Simpson, chief executive of Hambleton and Richmondshire district councils, said the move would see the authorities through some uncertain times in the next 12 months.

“This isn’t a surprise. We have been anticipating there will be changes in public expenditure after a General Election whichever party is in power,” he said.

Local government expert Martin Laffin, of Durham University, said public services in the region had already suffered after years of spending cuts.

“Arguably, a lot of the easy savings have been made already,”

said Prof Laffin. “The next stage is going to be much more difficult.

“It sounds great to say that front-line services will be kept, but the front-line needs back office staff to keep things going.

“I don’t see how you can save ten per cent just by cutting back office functions.”

Hartlepool mayor Stuart Drummond urged Prime Minister Gordon Brown to protect vital council services in future budgets.

“Mr Brown has promised that front-line services will be protected,” he said.

“I just hope he remembers that the services we deliver as a council fall into this category and that grants to local authorities are therefore protected as well.”

North Yorkshire County Council leader John Weighell said councils were paying for the help given to financial services responsible for the global recession.

“So much money has been spent propping up the banks that public expenditure can’t carry on,” he said.

Stuart Crowe, corporate director of resources at Durham County Council, said: “We have noted the Prime Minister’s comments and will be considering this during the coming weeks and months, as the council develops its budget for 2010-11 and its medium-term financial plan for the next three years.”

The authority has drawn up plans to close some of its offices, as a way of saving money.

A spokeswoman for Darlington Borough Council said the council would be reviewing its medium-term financial plans in the coming months and “at that time councillors will decide how it will respond to the financial challenge”.

But a Unison spokesman in Darlington said: “In many areas, services are stretched already and extra staff are needed. Politicians of all parties have to be realistic about what level of services they want from the public sector.

At the moment, they seem to be competing to see who can cut the most.”

At Middlesbrough Council, chief executive Ian Parker said he anticipated cuts in financial allocations over the next few years.

“This is compounded by severe financial pressures in some of our services, in particular child protection and adult social care,” he said.

“We are currently developing a range of initiatives to reduce our costs in response to the prevailing economic climate.

“As part of that process we will of course look closely at all the costs related to employing staff.”