Analysis

Analysis In this feature 19bn of cuts pay cap consumer harm Emptier than a bankers heart With multibillion pound cuts expected in the next Spending Review, Derek Allen fears a good trading standards service will become the exception, not the norm T It is quite possible that many local authorities will fail to undertake their statutory duties and responsibilities, leading to the scenario where a good level of trading standards service is the exception, not the norm he pace and scale of the reduction to the local authority revenue support grant over the past ve years and what is likely to follow in the next ve is unprecedented. Few, if any, local authority services have escaped the cuts, including childrens services and social care, but it is clear that many council regulatory services particularly trading standards have taken a far greater cut, in percentage terms, than the majority of other services. The summer Budget, while conrming a very slight slowing of spending reductions overall, does not guarantee a slowing down of cuts across all services. The severity of these cuts will be revealed in the autumn Budget. The Institute for Fiscal Studies analysis estimates that the Spending Review will seek 19bn of cuts from unprotected departments by 2019-20, while the Local Government Association (LGA) projects that budgets for non-ring-fenced council services will drop by 35 per cent by 2020, because of increasing demand for waste services and social care. Unfortunately, if past experience is anything to go by, regulatory services and trading standards will again take an even larger cut than the headline announcement by the Chancellor, George Osborne, on public sector spending. The Chancellor also announced a one per cent annual pay cap for public sector workers for the next four years, which is likely to mean a further real-terms cut in pay, on top of the severe pay constraints over the past ve years. What is not clear is why trading standards, which provides crucial public protection services including tackling doorstep crime, counterfeit and unsafe products, scams and internet fraud often to the most vulnerable in society, has taken such a disproportionate hit to its budgets. A possible reason is that a lot of trading standards work falls under the radar of those councillors and senior managers who make budget decisions for their services. These include vital activities such as inspection, surveillance and enforcement work to ensure businesses comply with important regulatory food standards and meet legal weights and measures standards. (See box, Consequences and impacts.) The service can point to the National Audit Ofce report of 2011, Protecting Consumers the system for enforcing consumer law, which highlighted the conservative estimation of the then Ofce of Fair Trading (OFT) that, for every 1 spent on trading standards, there is a 6 gain in consumer benet. Based on the overall 73m reduction for trading standards since 2009, from 213m to 140m and using the OFTs 6:1 ratio this means there has been a 438m loss in consumer benet over this six-year period. There could be a loss in consumer benet of around 1bn when future reductions are included. The Chancellor has made it clear that Britain is open for business and his support for rms and a growing economy is unequivocal. However, this has proved no defence or protection against swingeing cuts. It has been far more difcult to demonstrate strong quantitative and qualitative evidence on the positive impact trading standards services have on the social, economic and environmental wellbeing of the local communities they serve. It is quite possible that many local authorities will fail to undertake their statutory duties and responsibilities, leading to the scenario where a good level of trading standards service is the exception not the norm. The recent challenge in the High Court in respect of Liverpool City Council, which proposed to reduce its trading standards service from 19 staff to four and the councils subsequent agreement to review its decision will surely not be the last case of its kind. It is a very critical time for trading standards services. I have always been and will remain a strong advocate for local government, but only where clear benets to citizens can be shown over centrally or regionally delivered services. There are many examples of service excellence and some successful collaborative and partnership working. The creation of the National Trading Standards Board, and subsequent funding allocation, has helped to secure resources for some important regional and national activities. However, this funding was previously allocated to the OFT, so it is neither new nor additional money. It will not be enough to ensure the future of a viable, sustainable and resilient trading standards service, delivered and funded by the local government sector nor will it overcome what is evidently becoming a postcode lottery in consumer protection across local authority areas. It will be interesting to hear from Sajid Javid MP, Secretary of State for Business, Innovation and Skills (BIS), and Nick Boles MP, Minister of State for Skills who has consumer and competition policy as part of his extensive portfolio of responsibilities on how BIS will underpin and drive forward the business elements of this budget; plus, any announcement that comes from the Department for Communities and Local Government in respect of local government funding in the autumn. The LGAs position paper, A shared commitment local government and the Spending Review June 2015, suggests that, if things do not change, local government will face a funding gap of 9.5bn by 2020. With limited scope for further efciencies, this can only put at risk valued public services that look after the vulnerable, keep residents healthy, prepare people for work and build stronger, safer, more vibrant communities. Responding to the Chancellors summer Budget, the new chairman of the LGA, Gary Porter, said: Councils already have to nd 2.5bn in savings this nancial year, and these are proving the most difcult savings to nd yet. Governments goal should be to see how, overall, public money spending can be smarter and more efcient. Without reform of the way public services are paid for and delivered, we predict councils could face a further 3.3bn reduction in central government funding for local services in 2016/17, and a funding gap of 9.5bn by the end of the decade. This will add to pressure on vital services, with many councils forced to make tough decisions. If things do not change, local government will face a funding gap of 9.5bn by 2020. With limited scope for further efficiencies, this can only put at risk valued public services that build stronger, safer, more vibrant communities The reality Those who do not know the extent of the contribution that trading standards makes to community health and wellbeing, to local businesses and to economic growth and vitality, may not understand the consequences and impact of no longer having a viable, resilient service. The uncertainty resulting from a Budget that failed to outline departmental spending plans over the next ve years offers little comfort to local authority trading standards services that are already struggling to provide more than a minimum service after half a decade of difcult budget cuts. Further reductions to the service are simply unsustainable, with some authorities forced to think about cutting services beyond statutory minimum levels. To survive the next ve years, the trading standards profession must think seriously about resources and structures. I am currently working with CTSI and trading standards colleagues to add value and provide support to them, including working to implement CTSIs new vision its too important not to! CONSEQUENCES AND IMPACTS A SELECTIVE LIST OF VITAL SERVICES PERFORMED BY TRADING STANDARDS THAT HELP TO PREVENT OUTBREAKS OF CONTAGIOUS DISEASES, FOOD FRAUD, UNSAFE PRODUCTS AND DOORSTEP CRIME: G Animal health and welfare inspections growing criminal activity, often preying the sale, to under-18s, of products such as and surveillance this helps prevent on the most vulnerable in society who, in alcohol, tobacco and knives animal disease outbreaks such as foot some cases, lose their life savings and mouth and bird flu, and ensures G Unsafe products entering the country G Weights and measures (legal metrology) checking the accuracy of proper welfare standards for farm we have very good border controls and weighing and measuring equipment is animals. The cost of such outbreaks in enforcement, but the sheer volume of essential to ensure consumer confidence financial terms is many billions of pounds products coming into the UK requires in the buying and selling of many trading standards officers to be vigilant, products, ranging from food and drink surveillance the recent horsemeat follow up on complaints, and take to petrol and building products. It is scandal is an example of the importance strong enforcement action. Without important that businesses know they of vigorous inspection and surveillance. these officers, the floodgates would operate in a fair and competitive market Without trading standards, there would be open, putting consumers at risk and place. Without effective surveillance far fewer controls on food standards, and undermining local businesses by trading standards officers, the UK G Food standards inspections and illicit meat and other food crime would continue unchecked G Counterfeit products, tobacco, G Doorstep crime for example, rogue retail and wholesale sector could be traders offering bogus building work undermined. It may not be a headline- with no intention of completing the hitting service, but it is essential G Business support businesses require alcohol some of the major players work and/or carrying it out to a very include serious criminal gangs, which poor standard. This has been a growing regulatory compliance advice and not only put peoples health at risk, but area of enforcement activity for trading support. Schemes such as Primary undermine the legitimate businesses standards officers Authority will be undermined if very few selling genuine products G Internet fraud scams this is a huge and G Age-restricted sales trading standards officers make test purchases to stamp out trading standards resources are available in the future Credits Published You might also like Derek Allen is managing partner at Derek Tuesday 25 August, 2015 Rigorous review to identify 20bn of cuts Allen Consultancy Services. Images: Larry Lilac / Alamy August 2015 To share this page, click on in the toolbar