By Daniel Hunter

Councils in England and Wales have sliced £1.4 billion from their gross annual paybill, the latest Local Government Earnings Survey can reveal.

The reduction represents a 9.7 per cent saving to council taxpayers in real terms and has been brought about by a combination of national pay restraint, the introduction of more efficient work practices — such as amending staff rotas to reduce hours and minimise overtime — and widespread workforce restructuring, which has seen the local government headcount reduced by 214,000 since December 2010.

Job cuts have been achieved largely through voluntary redundancy and not replacing workers after they retire or move to new jobs elsewhere. A significant number of compulsory redundancies have also contributed.

In addition, 90 per cent of councils reduced senior management costs by employing fewer people in senior posts or paying them less, while 79 per cent of all councils reduced the cost of middle managers.

"Slicing £1.4 billion from the paybill hasn't been easy. Pay restraint and more efficient work practices have helped but the big saving has come from reducing the workforce, which we have been able to do largely through voluntary redundancies and not replacing workers when they retire or move to jobs elsewhere," Sir Steve Bullock, Chairman of the Local Government Association's Workforce Board, said.

"It will be impossible to deliver the same savings again without another big reduction in the workforce which will inevitably involve a much higher proportion of compulsory redundancies. Frontline services will be hit and some of the services residents currently expect their council to deliver will have to be wound down.

"The frontloaded 28 per cent cut in the funding councils receive from Government is far larger than cuts faced by almost every other part of the public sector, including Whitehall departments. With the adult social care system dangerously overstretched and the country's roads in need of a £10 billion upgrade, similar cuts in the next funding period will have a big negative impact on the services councils can provide to residents."

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