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Up to 100,000 jobs could go in UK local authorities

world Updated: Oct 21, 2010 19:31 IST

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Britain's local authorities will have to cut up to 100,000 jobs after Wednesday's spending review disclosed deep funding cuts, a lobbying group for local councils said on Thursday.

However, councils are prepared for the fiscal squeeze and will not need to be bailed out, said Margaret Eaton, chairman of the Local Government Association.

"Let me right now completely dismiss the suggestion ... that councils will go bust," she said. "No council has ever failed and it won't happen now. We're prepared."

The government plans to slash more than a quarter of council funding in a massive deficit-busting drive, and a partner at accountancy and consultancy firm KPMG predicted on Wednesday that some councils would not survive the squeeze without government support.

One in 10 jobs in local councils will go and non-essential services such as libraries and youth centres could also close, Eaton said. Councils are legally required to provide other services, such as schools and adult social care, LGA said.

In a separate report, accounting firm PricewaterhouseCoopers forecast about half of the 500,000 public sector job cuts will come from local government.

Birmingham City Council, the largest local government authority in Europe, has already told 26,000 employees in the public sector that their jobs may be at risk.

The specifics of local cuts will not be clear until December, when the government will announce how budget cuts will affect individual councils.

Until then, councils will have to be creative in allocating limited budgets.

Barnet Council in London has proposed the idea of a budget airline-style model, EasyCouncil, where local residents pay more for enhanced services.

"Only a radical reform of the way we organise services, around people and places instead of institutions, will deliver the real savings and improvements we want," Eaton said.