When Birmingham Council issued a Section 114 notice declaring itself bankrupt, it was all the fault of elected members and senior council officers, according to Michael Gove, who blamed them for: “Poor leadership, weak governance, woeful mismanagement of employee relations and ineffective service delivery.” He also launched an inquiry to determine the causes of this failure. George Osborne’s austerity policy would be a good place to start. According to Councillor John Cotton, Birmingham City Council leader, cuts in government funding of £1 billion in the last ten years have driven the council over the edge. And they are not the only ones.

Prior to the Tories taking power in 2010, only one council had ever issued a Section 114. Hackney in 2000. Since 2018 councils have been going bankrupt at a rate of one a year: Northamptonshire, Slough, Woking, Thurrock, Croydon and now Birmingham. Six others: Bradford, Devon, Guildford, Hastings, Kent and Southampton are making drastic cuts to avoid a similar fate. Others are not there yet but the average council budget deficit in England was £20 million two years ago and is projected to rise to £33m by 2025/26.

Austerity officially ended in October 2018, but for local authorities, that were more heavily cut than any other sector of public spending, it never really went away. The burden of cuts was also unfairly distributed. Cities were disproportionately affected, and the impact was also greater in the north than in the south.

The Centre for Cities reported cuts in local authority budgets in excess of 50% between 2009/10 and 2015/16. 74% of the cuts in day to to day spending by local authorities fell on the cities. This equates to cuts of £386 per person in cities compared to £172 per person elsewhere in Britain, even though, measured by unemployment and deprivation levels, cities were meeting the highest levels of need.

If cities overall were hard hit, the hardest hit were in the north. According to the Institute for Public Policy Research “Ten years after it was first introduced, new research (2020) finds that austerity has had
a disproportionately damaging impact upon the North of England’s resilience and
its capacity to deal with the social and economic impacts of the Covid-19
pandemic.” Northern Powerhouse, Levelling Up, HS2 have all been empty promises, as local authority jobs in the north have been lost to greater centralisation and a growth in civil service jobs in London.

The economic shocks caused by Brexit and COVID have increased the pressure on all local authorities. But the urban centres have suffered the most. And now they have to cope with high interest rates and inflation that is fuelling wage militancy And, although most pay settlements are below inflation, they are still stretching local authority budgets to the limit at a time when the cost of living crisis is increasing demand for services from the poorest in society.

For many on the left, local government has provided a reason to stay with Labour. The idea that Labour councils can act as a shield to defend communities from the worst ravages of capitalism has been severely dented, as central government has taken control of council finances; limiting their powers to increase council tax, setting business rates nationally and using government grants to favour more prosperous Conservative areas at the expense of poorer Labour voting councils.

Essential services like social care have been privatised or, as is the case of education, effectively nationalised by forced academisation of local authority schools. Councils still have a responsibility to provide these services but very little power to do so. Hence they get the blame for cuts that are a direct result of government policy.

Would things be better under a Labour government? The oft repeated claim to be the party of fiscal responsibility, combined with the authoritarian streak that has seen left wing councillors and even mayors like Jamie Driscoll deliberately sidelined by a party leadership that is totally committed to neoliberal economic doctrines and hostile to any expression of democratic socialism by local parties, suggest that the answer is No. As the Liverpool Independents have found, for many socialists it is impossible to defend your community while staying loyal to Labour. It is time to choose: Socialism or Labourism. You cannot have both.

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