Cuts, calamity and councils

Submitted by AWL on 5 December, 2018 - 12:48
budget cut

Peter Kenway is director of the New Policy Institute, and author of much research on local government. He talked with Martin Thomas.

Philip Alston’s recent report on “social calamity” in the UK focused on cuts in benefits. There have also been huge cuts in local government. What is their impact?

Local government delivers about 200 distinct services. The best-known is social care for adults and children, which takes over a third of the money. There’s the bins, and an increasingly residual role in education. And then a bunch of mundane but essential stuff: school crossing patrols, maintaining roads and parks, youth services, environmental health, trading standards, building controls...

Since 2010, spending on social care has gone up, driven by statutory requirements, but councils have cut down everywhere they could. In education, the government has centralised control. The rest, the vast majority of local government functions, which you could call “neighbourhood services”, about a quarter of total local government spending, has been cut by 25% in real terms overall. But you can find local authorities in prosperous areas of (e.g.) Berkshire and Surrey which have increased those services. Metropolitan authorities outside London and some unitary authorities have suffered most.

The government has very largely reduced the grants that once sought to equalise resources, so some places have lost the provision they had eight or nine years ago.

The Financial Times today (3 December) reports on East Sussex council as having cut all bus subsidies, scrapped school bus services, reduced support for the elderly, disabled, and families; it now plans to close most of its remaining libraries...

That’s typical of the country councils who have found themselves in difficulties..

The noisiest complaints to central government have come from Conservative county councils. The Institute for Fiscal Studies has recently done a report about the government’s proposal that local authorities retain 100% of extra business rate income from their areas (existing business rate income is redistributed), saying that it will lead to divergences in funding without promoting growth. Overall, risk has been shifted downwards. The centre no longer takes backstop responsibility.

An example is council tax benefit. It used to be 100% for everyone on means-tested benefits. That was brought in by Heseltine and Major as part of the deal to replace the poll tax. Since 2013 it has left to councils to decide how much council tax support to pay to the worst-off. While banks are de¬risked by the taxpayer, in local government the risk has been transferred downwards. If a large workplace in a local authority area closes, the local authority picks up the tab.

Before 2013, this wasn’t the case. The council administered CTB but in the end the bill was picked up by central government. There is and will be more more area¬by¬area inequality, though there will be ad hoc rescues, as in Surrey and Northamptonshire.

Since at least 2011 it’s been said again and again that “local government is on the edge”. For the most part it has not fallen off. Only a full¬scale financial crash could cause a council to collapse completely. And most of the cuts have been through voluntary redundancy. Councils are losing expertise and resources. They have very little flexibility or opportunity to plan or to think strategically, rather than trying to cope day to day. Capacity and know¬how is being destroyed. We’re losing the social¬democratic state.

This aspect of it is less visible, because many of the local government services are scarcely visible to the majority. Most people don’t notice the worst cuts.

In 2010-11, several councils agitated to demand restoration of central government funding. But as the cuts have got worse, that agitation has disappeared. And, despite all its other redistributive measures, Labour’s 2017 manifesto said nothing about restoring local government spending.

I am very struck by how apolitical local government has become. In my work I can be in a room full of Conservative and Labour council leaders, and it’s not always obvious which is which.

Three things have led to the quiescence. The public is not kicking off, on the whole. Local government has been very attracted by the idea of “localism” promoted by George Osborne. And London, overall, including its most deprived bits, is in a different place from other metropolitan areas. Scottish and Welsh are now focused on Edinburgh and Cardiff.

Whatever political unity there was among Labour councils is much weaker. London has benefited relatively because it’s more prosperous, it has increased business rates, and, in areas like Camden anyway, the population has shifted to include a smaller number of older pensioners. And London is more granular than other cities. Rich and poor live very near to each other.

The Labour manifesto’s lack of interest in local government comes (in part) from the fact that local government has not pushed hard. But in fact historically Labour Party leaders have shown little interest in poverty. Labour Party manifestos over the years have very little mention of poverty until 2001. “Poverty” is on the whole not a term working-class people use to describe themselves. It is more used by upper-class people concerned about what they see as social issues.

I remember people in Glasgow saying to me: “This is normal for us. We don’t call it poverty”. Since poverty is an inherently relative concept (it being about not inability to maintain at least a minimum socially acceptable standard of living), there is no answer to that.

Poverty is not the same as low pay. Pay rates feed into it, but also working hours, how many people in a household work, child care, and so on. People who are short of money are also often short of time. “Poverty” opens up a different world from just pay rates. It raises questions of public services, access, and affordability. Marrying the issues is a challenge.

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