Without an urgent cash injection, sweeping cuts of 20% could be seen in local authorities right across England. So the Local Government Association has reported. In real terms, the net funding shortfall from the pandemic emergency is estimated at £10 billion.
Labour-held Stevenage Borough Council has been one of the first to break cover, reporting a £4.5 million black hole, expanding to £8 million by the end of year: see here. The council’s whole annual budget is £9 million.
Without a bail-out this deficit could force the council to declare bankruptcy and issue a Section 114 notice, allowing the authority to make cuts outside of the annual budget cycle and in statutory services. Stevenage isn’t alone, and will likely be followed by many more councils as the long-term financial implications of coronavirus start to bite.
Instead of calling on party members and rank-and-file worker activists in the council to prepare to fight back, however, the Labour Group leader made clear in the local press that their greatest priority — over and above the interests of Council staff and services — would be ensuring the financial stability of the Council.
In the next weeks and months emergency budget meetings are planned to explore where the axe could fall. Given the back-drop of an almost universal failure of Labour councils to fight cuts, this is hardly surprising, but does demonstrate the most-likely response of Labour-held councils now.
The Council leadership would prefer not contemplating cuts right now, but equally they won’t be organising worker resistance. The left in Stevenage have started considering this.
The local Momentum branch responded on Thursday 21 May with a motion calling on Labour councillors to coalesce the wider movement locally in united action to defend jobs and services, and for the full reinstatement of all post-2010 grant losses.
Any serious campaign to stop redundancies and save services needs more activity than statements in the local press and letters to ministers, but something built by our movement, and linked to a broader national struggle against austerity.