Tom Miller on the realities of 12 years of Tory cuts for local services
As I write this piece, I find myself in the unfortunate position of half of the organisation I work with having disappeared. I speak of Brent Council in North West London, where we now face our 12th successive year of budget cuts. With all-out elections across the London boroughs, each council is moving into a round of budget-making with a new administration. Boroughs in the capital face a funding gap of £400m this year and £700m next year.
Tory-run Croydon has been forced into declaring a second effective insolvency after years of running the council. In November, two other Tory administrations, Kent and Hampshire, wrote to Rishi Sunak to warn that they were headed in the same direction. This follows the well documented previous case of Northamptonshire, which was run by… well, take a guess.
As someone representing an area with high deprivation which has been the target of hugely disproportionate cuts, it does amaze me that Conservative councillors are unable to stop semi-rural authorities in affluent areas from collapsing under the weight of their own policies in Westminster.
Perhaps they drank their own Kool-Aid in the early years of austerity and refused to believe that it was happening or that it was meaningful. Perhaps they lack any sense of priorities. Perhaps, as advocates of so called ‘small government’, they have failed to emphasise any of the measures that would help them raise extra income. Maybe, as people who think that the market works best, they are being beaten up by the intolerable profit margins and inefficiencies that come with outsourcing everything.
In 2015, the Irish Labour politician Ruairi Quinn told his TDs (members of parliament) that “the great thing about socialists and social democrats [is], because we don’t believe in capitalism, we know how to f**king manage it”.
The man had a point. Labour councillors are used to seeing this play out locally, where Tory councillors struggle to tell the difference between revenue and capital, and will fund free parking and pothole repairs with reserves that can only be spent once and are meant for emergencies. But in recent months, we have also seen the disastrous effects of a capitalist political party with no understanding of capitalism play out on the national stage.
If the Conservative Party is the party of British business, it is amazing that the whole country hasn’t folded. Yet.
Recent Local Government Association analysis shows that the combination of inflation, National Living Wage increases and increased demand will lead to a funding gap of £3.4 billion in 2023/24, rising to £4.5 billion in 2024/25.
So, what should Labour do? Firstly, it must move to fix the instability in our funding formula, which does a lot to prevent us from mitigating cuts. If you can only budget for a year, it is difficult to shape new services, identify new costs or opportunities, and attract and train the right people to make it happen. As a starting point, a multi-year funding formula must be a priority.
We also find ourselves continuously raising council tax up to the limit allowed without expensive and risky referendum campaigns, having already being elected on a mandate to protect local services.
The Local Government Chronicle estimates that council tax would have to rise by 20% in order to cover the present gap between funding and service need. It should be obvious to everyone that this is totally unsustainable, and that the direct result of years of austerity is simply that people do not have their needs met.
We can’t raise the money we need, but the tax we raise locally will hit low earners because it is regressive. Given the cost-of-living crisis, we are nearing the limit of public tolerance for eternal rises, but the present alternative is the collapse of social care and basic services like bin collection.
Labour must reform local taxation and make sure that more deprived areas get their fair share from central government, pairing this with a strategy for private sector growth and an infrastructure plan.
The recent localisation announcement from Keir Starmer and Gordon Brown has been encouraging, but without full protection for local funding, the consequences will be extremely serious for anyone who uses their local services. We need to be honest about cuts and where they come from. Labour members and councillors are also duty bound to push the central party on its commitments and ensure they become a reality in government. Our choice is between genuine radicalism and systematic collapse.