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The British Bust: How will Manchester renew itself after austerity sets in?

During the last two decades, public-private partnerships spared the city a Rust Belt fate.

The Conservative-led coalition took power in May and signaled there would be cuts. This was important for all local authorities to know in advance. The way local government is funded in Britain is incredibly complicated but the bulk of its budget comes in a grant from the central government in London. Evans said the council began preparing for a reduced grant for the financial year beginning in April but it wasn't until late autumn that their grant was finally announced.

The council has to find more than 109 million pounds ($177 million) in savings from the 2011-2012 budget, a further 60 million pounds ($97.7) has to be cut from April of next year. Seventeen percent of its workforce has to go. That is a lot of money and employment to take out of a city of approximately 490,000 people that is the hub of a metro area with an additional 2 million people. But it is the suddenness of the cuts that is so shocking. "Why aren't they being phased in gradually?" Evans asked.

The answer, of course, is politics. Cameron and his government came to office knowing they had to shrink the size of government to reduce the deficit. That meant job losses and services being cut back. Since the next election could be as late as 2015, Cameron and co. want to get the bad news out of the way early. They hope that in four years the economy will be growing, that the private sector will have picked up the slack in employment and voters will have forgotten the pain of cutting services.

Those who have to make the cuts as the British economy timidly steps out of recession — in the last quarter of 2010 the economy actually contracted by 0.6 percent — wanted to cut more slowly. Their theory is that if growth leads to improvements in employment and tax revenues it might be possible to pay down the deficit over a long period of time without making further cuts to public services.

Evans sits on the executive committee of the Manchester city council and is in charge of adult services. That includes overseeing care of the elderly, people with disabilities and the increasing number of people with dementia. He noted ruefully that much of the reporting so far on the upcoming cuts has focused on swimming pool and library closures. "If the council has to close a swimming pool that's an inconvenience. But what we do is literally life and death."

He added, "These last 10 weeks have been awful. I'm an ordinary working guy. I didn't get into government to make cuts to services."

But cut he will, and re-jig his services. The core mission of his department — helping adults with disabilities and the elderly without family to stay in their own homes rather than having to move to overcrowded institutions — will be severely challenged.

What happens next for Manchester is anybody's guess. The last time a British government so dramatically shifted the structure of the economy was in the first two years of Margaret Thatcher's premiership. Recession followed and the northern part of England bore the brunt. Manchester pulled itself out of the morass by re-discovering public-private partnership. Now the public part of that equation is being severely trimmed back. Can the private sector pick up the slack?

"In the short-term, no," said architect Gavin Elliott. "In the medium- to longterm, probably yes."

Manchester's two-century long history of bouncing back from the vicissitudes of the free market backs Elliott up, but re-invention doesn't happen overnight. And, let's face it, once you've played the Olympic bid card where can you go?

For the thousands who will be losing their jobs the next couple of years are a frightening prospect.

Read The British Bust, Part I on how the people of Manchester have yet to feel the impact of drastic government budget cuts.

http://www.globalpost.com/dispatch/news/regions/europe/united-kingdom/110309/manchester-austerity-economy