Puppet show

Protest outside County Hall Norwich against Norfolk County Council cuts to social care. \ Credit: Flickr - Roger Blackwell

In the face of Tory hollowing out Tom Miller says local government finance needs a total rethink

The Local Government Act of 1888 established the first modern local Councils that we would recognise, with the establishment of 66 County Councils, plus an additional authority to run London, then a considerably smaller place. The Bill was brought about by the most recognisably conservative of all Prime Ministers, Lord Salisbury who, fortunately, was unable to command the necessary numbers to pass the Bill he preferred.

Instead, Salisbury relied upon the support of the Liberal Unionists. They successfully demanded that the new nationwide local government structures were elected (albeit from the severely restricted franchise of adult male ratepayers), in line with earlier legislative efforts covering so called “incorporated areas” following the passage of the Great Reform Act.

The Chartists had turned the screw on Westminster, and the liberals bore down on the Tories. For all the messy Britishness of it all, the nascent working class movement outside Parliament was to thank for advances that came out of it and can claim its share of responsibility for democratic local government.

There are now 318 Councils in England above parish level, 22 unitary authorities in Wales, 32 unitaries in Scotland, and 11 across the six counties of Northern Ireland, so 383 in total. If we include “lower tier” authorities, the number is a staggering 11,930.

But what really matters is what they do.

Those of us elected locally have a long tradition of grumbling about the contempt shown by Westminster and Whitehall, and there is much substance to this given the systematic stripping of powers by the Thatcher government. Further “reforms” under New Labour took much of education out of local democratic control, and forced “arm’s length” bodies on Councils to do the same with housing provision; a decision which much of the sector is still recovering from in terms of both quality and cost. For the major political parties, the recent past has been one in which local democracy is disdained in favour of marketisation.

However, current events represent a far more existential deepening of the underlying question: if we are democracies, then what do we democratically govern? The stripping of powers can be repaired. The successive stripping of budgets caused over a decade of closures of services could take decades to build back. Democracy without substance is the Tory aim, but the result is a puppet show with occasional bankruptcies. Not only is funding lacking, but Councils have been straightjacketed when it comes to raising tax income locally – the only disruption arising when the crisis in social care briefly became so salient on a national level that the problem could no longer stay buried.

But the Tories learned nothing. A couple of years and several bankruptcies later, many Councils teeter on the cliff edge. The sector is awash with rumours of DHSC hiring an army of “commissioners” in advance of more Councils going bust, a bankruptcy drive politically conceived with malice aforethought.

Councils plan to hike Council tax by £2 billion next financial year, a pernicious tax that hits lower earners much harder, and which remains based on a set of valuations carried out in 1991, geared towards genteel areas. Buckingham Palace pays less Council Tax than a three bed semi in Blackpool.

The funding gap is still double the size of the proposed rises, and Councils are still left trying to make long term plans with one year budget settlements.

Labour has spent the last two years desperately trying not to look radical on any issue. But the most radical steps are being taken in Wales, where Labour have spent years in government and are revaluing the Council tax bands.

There is an urgent need – and great opportunity – for a Labour government in Westminster to re-found local government on a democratic basis by creating a new system. There are a few obvious priorities: getting locally elected bodies the funding our residents actually need for their services, on a fairer basis, doing it in a way that is locally accountable. The obvious solutions would be 1) an independent body to assess needs and allocate multiple-year central grants, and 2) local taxation that addresses the real value of land, including planning permissions and vacancy.

Local democracy unlocks social care, housing, environment and education. Unless it can regain its material substance and raise money more fairly and effectively, its finances and legitimacy will totally collapse. Fundamental change is needed, and this needs campaigning voices and a public mandate. We could call it a “mission” – Keir Starmer, take note.

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