There is a big if in all this

VINCE CABLE sounded optimistic after yesterday’s Comprehensive Spending Review. “We can do it without massive redundancies,” he said.

He was referring to Chancellor George Osborne’s prediction that 490,000 public sector jobs will be shed nationally in the next four years, with the North-East likely to lose 43,000.

Local councils reacted by talking of their “appalling difficulty” in making such deep cuts, and accusing the coalition Government of launching an attack on local communities.

But Mr Cable said: “I think it would be dishonest to say there will not be any redundancies, but a lot of these job losses will come simply from vacancies not being filled, from people retiring.”

If Mr Cable is right – and it is a big if – the big difficulty for local councils is whether it is the right people who will be going through natural wastage. Because, after decades of being the whipping boys of politics with their budgets rigidly controlled by central government, town halls are suddenly being moved to the frontline.

“It will be a tough time,” said Mr Cable, “but by no means desperate.

“We want to get rid of red tape. Instead of 90 separate streams of funding, councils are going to be given the freedom to spend their money in most cases as they wish, and they will be given greater freedom to borrow.

“So if they are imaginative, they will find new ways of funding developments and delivering services.”

It looks now as if the nature of our local authorities will change over the next few years.

Rather than provide services themselves, their job will be reduced to ensuring that someone provides the services. Put simply, rather than employing vitally-important bin collectors themselves, councils will merely make sure that a company – public, private or voluntary – empties the bins.

It is a big change. Yesterday, the Government tried to devolve the risk behind the big change.

Councils are to be given the “freedom” to decide which of their services to cut – will it be the theatre, the parks or the bin collections? – and when they make a controversial decision, who will the people blame? Local councillors or central government?

From Mr Cable’s point of view, will it be the Conservatives or his Liberal Democrats who are blamed?

He said he could see Lib Dem policies shining out of Mr Osborne’s statement.

“We had great emphasis on the fairness agenda,” he said, despite the feeling that the clobbering of the welfare system will harm the poorest in society. “The statement is fair and it is progressive – the better off will pay more, both in cash and as a proportion of their income.”

He pointed to the changes in child benefit and the proposed alteration to student fees, whereby richer graduates pay more, as evidence.

“People in work, including low-paid workers, will be in a stronger position,” he continued, “because it will be better to be in work than not in work.”

But there have to be jobs for people who come off benefits to do. Mr Cable pointed to the North-East’s record in green industries which, he said, would be supported by measures in the review to promote electric car sales, to boost wind turbine construction and to create a Green Investment Bank.

When told there were already moves afoot to get the new bank based in a North-East town such as Darlington, he said: “I feel a bidding war coming on. I haven’t even drawn up how you bid for it yet, but I hope it will be located not in the City of London but in the regions.”

Even without it, he saw green shoots in the region. “It goes against the popular view, but there’s already a lot of dynamism,” he said.

“Last week, Sunderland and Stockton were named as the best places for business start-ups, at Redcar there will be a big investment with Corus reopening, and the best university I have visited recently is Teesside, which is really inspirational, well-organised and highlyfocused.

“You have a lot to build on.”

Just as long as the foundations haven’t been fatally undermined by yesterday’s review.

‘We were disappointed in the North-East’

THE North-East is likely to get two Local Economic Partnerships (LEPs) to replace its regional development agency (RDA), Mr Cable said yesterday.

He said: “We were disappointed, to be frank, in the North-East because it was very strongly argued to me whenever I was up there that ‘we are a region and we think like a region’, but then what happened? We got six competing bids to form LEPs, and most didn’t make a great deal of sense, so we put them on hold.

“Now there are two strong bids – one for Teesside and the Tees Valley, and the other for the rest of the North-East. There is work that needs to be done, but we have got the geographical groupings right and we’ve got the councils and businesses to decide who wants to work with whom. What came out in the process was that Teesside had a very strong identity and didn’t want to be swallowed up, and so I think this is what people want rather than what they were told they want.

“The next stage is to decide what powers they will have and where the money comes from. It is clear they will have fewer powers than the RDAs.”

A Sub-Regional White Paper is due imminently, although it is unlikely that the LEPs will be given much clout.

Mr Cable defended his Government’s assistance to Teesside’s steel-making communities.

When in power, Labour had promised £60m – much of it through the RDA – to help counteract the closure of Corus, but so far Mr Cable has only given £30m. Where’s the rest?

“I will try to answer that in the future,” he said, “but we are moving forward and that whole £60m project was designed when Tata walked away.”

The implication is that with the steelworks’ new owners about to relight the blast furnace, not all the regeneration money will be forthcoming.