Local authority finances are a problem for the new government. We’ve all seen news stories about Birmingham City Council’s ‘black hole’ in its budget, or Nottingham forced to withdraw and reduce essential services due to lack of funds.
While 5 July should have been a time of unrivalled celebration, too many Labour councillors across the country still face too much of an impossible challenge to balance budget shortfalls to celebrate unreservedly (although I’m sure had a night of jubilation nonetheless).
Prior to the election, Keir Starmer said that he would not be able to ‘turn the taps on’ to fix the council funding crisis. Rachel Reeves said that she would not be able to ‘fix all the problems straightaway’ when asked about struggling councils.
Those responses – expected, considering the importance placed on Rachel’s fiscal rules during the general election campaign – reveal something fundamental about the way we think about councils.
‘Councils are seen as a burden to be managed’
The way our leaders talk about council finances is significant. What they signal is that this government – same as the last one – views councils as a burden to be managed rather than an enabler of our economy. This is in no way unique to the Labour Party; it is a view that has become common over the past fourteen (if not the last forty) years with the reduction of councils’ powers and resources.
This ‘deficit’ view of councils places limits on what we might expect councils to have responsibility for. It’s a way of thinking that’s become normalised in the corridors of Whitehall and explains why Ministers were so surprised that councils were best placed to act on the pandemic.
Whether consciously or not, there’s a view across the political spectrum that sees councils as a problem, as deficient – not because we are one of the most centralised advanced democracies and that local authority’s powers and funding have been actively eroded in recent decades – but because of some perceived inherent failing to councils.
Precarious council finances are a problem to be handled – with a one-off funding injection here, multi-year financial settlements there – rather an being approached as a structural problem deserving of political priority to permanently overcome.
We can see this in how council funding is always discussed through the prism of to cut or not to cut. The unspoken worry all councillors have is whether multi-year funding settlements will rise with or above inflation, or whether we will be given the long-term stability of real-terms cuts to come. Multi-year funding settlements that are above inflation would indeed be welcome, but we also need to change the way councils are viewed.
Councils could transform the country, if the new government would let us
Local authorities can and should be driving the growth our country needs, leading the charge for decarbonisation and nature restoration, supporting and creating local businesses, and transforming our country from the bottom up. We need the government to view councils as partners to enable transformation rather than a burden, and to act to ensure we have the means to achieve that.
Power and funding is not easy for any government to give up, and perhaps seems less likely to happen at a time when the relationship between councils and central government is so incredibly unbalanced. But the idea that councils should not be trusted with a fairer funding settlement is driven by the constraints on what we can currently achieve.
Let me explain that: in Sheffield, where I am a councillor, one of the most common gripes we have is around the poor quality and irregularity of our bus service.
READ MORE: The 27 candidates running as CLP reps – and their statements in full
No matter how many times you tell people that “the council doesn’t run the buses” (or, my #LabourDoorstep line, “Thatcher forcibly deregulated our buses four years before I was born”), the reality of our declining bus services contrasted with how they used to be means people inaccurately associate our council with their failure.
That association cannot be overcome by tinkering around the edges. We can’t win back people’s trust while presiding over decline. Cities like mine, that have struggled under austerity – and, truth be told, been struggling since deindustrialisation – a ‘decade of economic renewal’ is sorely needed. However, the threshold of what it will take for people to believe they’re living under a decade of economic renewal is incredibly high.
Councils must be active partners in our decade of economic renewal
That decade of renewal will not be felt by making social housing less affordable for social tenants in order to pay for the affordable housing that renters like me so desperately need. It will come from upfront central investment in social housebuilding and reaping the rewards of the stronger economy that will build.
It requires local leaders to have the necessary levers to tackle problems as and when they arise, not hoping the government will legislate years down the line.
Local renewal needs councils to have the resources needed to tackle the climate crisis – to cut household energy bills, provide green and plentiful public transport, or create new parks and green spaces in nature-deprived communities.
I’m standing to represent councillors on Labour’s NEC alongside Soraya Adejare because we know too well the issues councils and councillors face and the pressures we are all under, but also that they can and must be overcome.
There’s an alternative future within reach, with local authorities building council housing, creating good green jobs, and providing publicly-owned buses and trams. Getting there begins with a fairer funding settlement for councils, and taking us for what we are: necessary partners in rebuilding our country and delivering on the promise of a decade of renewal.
We’ve finally gotten the Tories out. Now we must ensure councils have the tools needed to rebuild our communities – for good.
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