'Protected' defence leaves councils at risk

Ministers are likely to protect Britain's defence budget in a post-election spending round, putting even greater strain on other departments and raising the prospect of "unsustainable" cuts to local government, the former head of the civil service has forecast.

Bob Kerslake, who was permanent secretary at the communities and local government department until six weeks ago, also suggested the NHS would need "an injection of money up front", as an incoming government faced "quite immediate financial challenges across the health system".

After months of briefings against him from within government, the recently-ennobled Lord Kerslake relinquished the Whitehall helm last September, but kept his other civil service role until February.

Lord Kerslake, who has taken a new job as chairman of London's King's College Hospital, emphasised that much would depend on the spending total set by the new government and its assumptions on how much income would be raised. These varied significantly between the main parties, he pointed out.

However, offering insights into the pressures Whitehall is under as it draws up plans for post-election cuts, he said: "There's undoubtedly a need to inject more cash into the NHS and I can just see it across the whole system really."

At the weekend the Conservatives followed the Liberal Democrats in promising to put a further £8bn above inflation into the health service by 2020 - the sum that Simon Stevens, chief executive of the English NHS, has suggested would be sufficient to keep services at current levels.

Interviewed before the Tory announcement, Lord Kerslake warned the next administration would have to answer the question: "is it eight billion over five years or is it an injection of money up front? Because I think the problems are here and now".

The former mandarin said it had also become "increasingly clear" that defence spending "to all intents and purposes is going to be protected" as an incoming government, especially if Conservative-led, faced pressure from backbenchers and armed forces chiefs to eschew deep cuts.

"So if we think about the pressure on the unprotected budgets, it's even more acute if you think defence is unlikely to feature in huge measure," he added.

"That's something I think people have not taken into account," he added.

Ministers and Treasury officials have privately argued that councils have proved able to shoulder the cuts, despite initial protests from local authority leaders that they would be impossible to deliver.

Lord Kerslake said it was "a tempting thought that you could just re-run the record and it's absolutely true to say people jumped up and down about the cuts in 2010 but then they weren't as traumatic or as bad".

That approach, however, would be "unwise". Local government had made the cuts "by stripping out staff and dimming the lights".

Lord Kerslake said they had "achieved a lot" but even "the lean and mean Conservative councils would say they cannot see from the trajectories how they will make it work in two years' time".

A central concern was the cost of social care, which made up just under 50 per cent of local government spending while directly benefiting about 2.4 per cent of the population.

"I think for those reasons local government can't just simply be asked to do the same again," he said.

He also cast doubt on whether a future government would implement the plan, drawn up by Sir Andrew Dilnot, to cap the sums individuals would have to pay towards their residential care at £72,000.

The blueprint, supported by both coalition partners, entered the statute book last year but it has come under attack from some who argue that it amounts to a subsidy for the better off.

Lord Kerslake questioned whether, at a time of "scarce resources" and "difficult choices," it was "the right choice" for public spending.

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