Jean Stretton, Leader of the Council: The hidden costs of false economies…

Oldham Council Leader, Jean Stretton

We have all probably made false economies in our time – and it is a life lesson we often learn the hard way.

In striving to make an apparent financial saving it can actually cost you more in the long run: like buying cheap batteries or shoes, or not servicing the boiler just to have it fail on the coldest night of the year.

The same can be said of the public sector pay freeze introduced by George Osbourne in 2010 – a seven-year squeeze that has hit workers, families and communities hard in the name of economic austerity.

What did it gain in the short-term? Well, attacking the public sector may have gained some populist headlines and made marginal savings on Treasury spreadsheets but the opportunity costs – what could have been achieved with that money instead – were notconsidered because of political dogmatism.

Real median (average) household incomes today are just five per cent higher than in 2007 and the UK is now in the worst period of pay growth in 150 years, affecting both the public and private sector. Clearly, George’s marvellous medicine didn’t work.

Public sector incomes have fallen way behind inflation and as the cuts bit deeper it meant people working even harder for less money.

It hit the lowest-paid frontline workers in the most vital services – health, education, police and care – disproportionately hardest. And it has lowered morale, increasing the problems of staff retention at a time of rising demand, which can mean having fewer colleagues to share the work around.

The impact has been equally bad for household budgets. ‘In work’ poverty is now at the point where a recent TUC survey found that one in seven public sector workers were forced to skip meals this year and almost a quarter reported they would not be able to pay an unexpected bill of £500.

And there’s been a much wider impact on the local economy…

By significantly eroding the value of public sector pay through this freeze – with frontline staff earning around £2,000 less than if their pay had risen in line with inflation – it ismeant workers have cut back on their spending. That has hit local high streets hard to the tune of an estimated £48bn less spent in shops since 2010.

Council employees last week were offered a two-year pay increase of 2% with more, rightly, for the lowest-paid such as staff in children’s centres, school support, parks, libraries and those who keep vulnerable children and elderly people safe.

It is a long way back and only the first step in any kind of serious attempt to tackle national issues around pay and productivity.

Crucially it also needs extra funding from Government to help local authorities deliver it, not just placing even more burden on our budgets and putting more services and jobs in peril.

Another part of the ‘austerity’ agenda has been cuts to welfare that have gone hand-in-hand with demonising some of our most vulnerable people.

As the cruel winter frost blew our way last weekend I found myself again fearing for those families facing hardship through Universal Credit (UC).

As the national rollout for the new benefit continues many thousands of families are still enduring the in-built six-week wait for help.

Yes, the Chancellor did reduce this wait to five weeks in the budget – a very small step in reducing the pain, in my view – but this does not start until February 2018.

Many others are also facing a difficult time because around 67,000 UC claimants are paid weekly and 25,000 might be affected over the festive season because of when their assessment periods fall.

That simply is not fair, and it means food banks – like the fantastic one in Oldham – will be strained to their limit again.

None of the above feels very festive, I know, but we can all do our bit by bearing in mind those less fortunate than ourselves at this time of year and also by ensuring our neighbours and relatives are safe during wintry weather.

This will be my last blog before the holidays, but I will return with a New Year’s Blog on January 1 looking ahead to the opportunities, landmarks and challenges that lie ahead for 2018.

In the meantime, I want to wish you all a happy Christmas blessed with great quality family time and memories.