The struggle between Labour and the Conservatives about the future of public spending has been pretty unedifying.

Ever since Andrew Lansley, Shadow Cabinet health secretary, made clear the inexorable fall in government spending from 2010 on, the public has been assaulted by the extraordinary spectacle of both front benches pretending that public expenditure will not be reduced in the years ahead.

By the end of 2010 Britain will have seen broadly a decade in which public expenditure has risen faster than taxation, often by a wide margin. From 2011 onwards precisely the opposite will occur: taxation will have to increase, year on year, well ahead of government spending. It is hard to conceive of a more effective way of undermining public understanding of the relationship between service provision and taxes. All the signals will have been wrong, contributing another straw to the sagging camel’s back of “faith in government”.

For councils the problem will be how to explain an inconsistency that is not of their making. Councils will face some of the deepest cuts in spending because ministers of both parties have committed to “real terms” increases in spending on the NHS and possibly schools. In the smoke and mirrors world of politics a promise to increase spending in real terms may simply mean raising spending on health at a rate of 0.1 per cent above inflation. Over a full parliament it might leave the NHS with virtually unchanged real spending. As a share of GDP it would almost certainly fall sharply.

We know that Alistair Darling plans to reduce public sector capital spending from 3.1 per cent to 1.25 per cent of GDP between 2011-12 and 2013-14. In fairness the Chancellor, by the standards of most of the debate about this issue, has played things straight.

Councils should plan on the basis that their grants from Whitehall will be cut in real terms, meaning cash rises below inflation, for seven to ten years.

If overall grants increase by 1 to 2 per cent a year, many authorities can expect a “floor” grant rise of zero. Council tax will presumably be held, by the threat of capping, to annual rises of 2 to 3 per cent a year.

The fallout from the Baby Peter case will ensure extra cash for children’s social services, while the number of older people increases relentlessly. Other services such as environment, housing, highways —even police and fire services — will be squeezed hard. Efficiency savings will not be sufficient.

By 2020 local government will emerge as something rather different from what we have known. In the meantime councillors and officers will have to improve the way they explain what is happening. Candour will be required. It would be better to under-promise and over-deliver than the opposite. Let us hope the Government takes this advice, and soon.

Tony Travers is the director of the Greater London Group, LSE

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