Wednesday, 29 December 2010

Labour Must Oppose Tory Local Government Cuts

By Michael Burke

The Tory-led Coalition has announced its plans for funding of local government over the next 4 years. Tony Travers, LSE professor specialising in local government, described them as ‘apocalyptic’. Local government has already been in the firing line, shouldering £1.8bn of the first £6.1bn of cuts in the government’s ‘emergency’ measures announced shortly after taking office.

Now, in line with Comprehensive Spending Review, total spending on local government will fall to £24.1bn in 2014/15 from £29.8bn in the last year of the Labour government. This represents a fall of 31% in real terms (using the official forecasts of 13% inflation over the years Financial Year (FY) 2010-2015 from the Office of Budget Responsibility).

A comprehensive survey by the Chartered Institute of Public Finance & Accountancy prior to the latest announcement shows that councils expected cuts of 20% or more in a range of areas, from capital investment (where 44% of councils expected cuts of at least that magnitude), to both economic regeneration and community safety (28%) environmental health (14%), and despite 1.75m households on council waiting lists, housing is expected to be cut by 20% or more in some local authorities (8% of the total). There were even 3% of councils which expect children’s social care to be cut by 20% (4% of councils expecting that for adult social care). From the 40% of councils who responded to the survey, it was estimated that 73,500 jobs would be lost in the first year alone.

The cuts are closely targeted at the poorest, Labour-voting areas . In the South-East, Hackney, Newham and Tower Hamlets will each experience 8.9% cuts in the next Financial Year (FY), while Essex has just 1.3% cuts. Manchester, Rochdale, Knowsley, Liverpool -St Helens, Doncaster and South Tyneside are among the 36 local authorities that take the maximum cut of 8.9%. Meanwhile Dorset gets a 0.25% increase in funding and Windsor and Maidenhead, Poole, West Sussex, Wokingham, Richmond upon Thames and Buckinghamshire all get cuts of less than 1%.

But these represent only total revenue cuts. Once other income streams, such as Council Tax and other charges are taken into account the government proportion of those budgets has fallen by up to 17%, in some cases in the first year alone. In addition, it now includes a number of social care responsibilities formerly carried out by the NHS.

Within local authority areas, the poor are hardest hit. Not only are they obliged to use a greater number of the services now being axed, but will also be hit by the freeze on Council Tax. The Council Tax is a moderately progressive tax, mainly due to the waivers and exemption on the very poorest. Freezing the rate while slashing services will benefit the rich at the expense of the poor.

Political Attack

There is no accident that this ferocious attack singles out councils. In the first instance it can appear as if the cuts are not Tory cuts, as they will be carried out by a variety of political parties including Labour in office. Secondly, these councils can themselves sow confusion as to who is responsible - if they seek to justify or defend the cuts. Wherever that is the case, Labour councillors will be acting as stooges and mouthpieces for the most ferocious assault on the local welfare state since its effective establishment in 1945. The ‘localism’ of creating a dozen new Mayors is entirely fake as many will be appointed at first, and all increasingly operate under the dictat of central government.

At the very least, Labour elected representatives should continually explain that the source of the cuts is the Tory-led Coalition. In addition, where they are in office, every practical step should be taken to oppose the cuts, to minimise the effects on the poor and to ensure the preservation of services, jobs and non-managerial pay. In addition, a host of revenue-raising measures can be pursued - where these have the effect of helping to reverse the government’s transfer of incomes from the poor to the rich.

It is unlikely that any illegal budgets will be set. Without significant strike action by either local government workers or others, councillors can easily be picked off under current legislation. But that does not alter the obligation to work closely with local trade unions, especially as their members are often best placed to identify genuine waste and savings which harm neither services nor non-managerial jobs. Of course, all protests by either unions or local residents against the cuts should be supported. A government which claimed concessions were made to students after two militant demonstrations can be forced to make more substantial concessions by much larger, militant protest.

The key to the struggle is achieving the maximum unity around opposition to all damaging cuts, to services, jobs or pay. And ensuring lasting political damage is inflicted on those responsible- the Tory-led Coalition and its policy of stealing from the poor to give to the rich- Robin Hood in reverse.

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