After savage Tory austerity cuts local control is basic common sense says Tom Miller
Alongside the landslide secured by the Labour Party in the 2024 General election, it is worth remembering that this was preceded by a Tory collapse in the local and mayoral elections just a couple of months beforehand. The Conservatives now only control six councils, having lost ten during that election. Labour controls 51, having gained eight, and all of this in the face of a one percent swing against the party.
Labour councillors have spent fourteen years campaigning against the ruinous austerity policies carried out against local government by Tory Westminster. A recent report from Kate Ogden and David Phillips from the IFS lays out the scale of the damage done. Funding fell in real terms by 26% on average, but the total fall in funding from central government was 46%, the remainder being offset by annual increases in Council Tax. Tory cuts to local government dwarf those suffered by central government departments, whose services are themselves often seen as being in collapse. I should add that the above statistics are only an average; poorer areas were hit considerably harder.
Over a thousand Labour councillors now find themselves confronting austerity with a Labour government in office, itself elected on a platform of fiscal conservatism. Money can be found to ease up on local government, but without new ways of raising funds, Labour’s fiscal conservatism will hold back action that is desperately needed to fix the country for some time, if not indefinitely.
The authored response to this self-imposed and widespread manifesto limitation does seem to be a welcome concession. Instead of relying on the politics of spending or investment, Labour seems most ready to tilt things leftwards where there are inexpensive “quick wins”, or in addressing the politics of ownership and control.
This latter element is crucial and a welcome move, despite the party’s fiscal conservatism. Labour has committed to lifting the Tory ban on municipal control of busses and bus routes, and to give mayors the power to create integrated transport systems – something that Labour led cities across the country have shown can work far better for passengers and the people working to keep them moving.
There are less specific commitments to deepen local devolution deals, and expand them into new areas. It would be helpful if the underpinnings of these were made more uniform, and the decision making giving rise to them made more transparent than the “secret lottery” we saw under the Tories.
Where the manifesto falls short is its pledge to introduce “new powers over transport, adult education and skills, housing and planning, and employment support.” Sadly, these are areas where devolved and local government are already largely in control of the brief, except perhaps in the question of how schools are governed and funded (a must for return to local democratic control). Important areas with huge local impact are missing from the list.
Recent years have seen water companies torn to pieces for their appalling treatment of the environment and public, and failure to invest in anything like an adequate level of long term infrastructure. Thames Water has suffered an investment strike as the holes in the profit-making business model became clear, along with unmet liabilities, and the scope of action that would be required of government if it folds is recognised in Whitehall as a strategic national risk.
“What kind of government would let this happen?” is a question that the public have already answered. However, if Labour allow itself to be limited to the fairly unambitious terrain in its manifesto, it will fail to deal with the answer to why this happened; utilities have been divorced from the people who rely on them and hitched to shareholders instead, under the assumption that the market will allocate money and work rationally. The result has been rivers of effluence and financial collapse.
Of course, a social democratic government needs to stand for more than this. To do so, we need to move beyond our manifesto, which represents a limit on our ability to carry out basic common sense.
Like rail, water supply and management is still largely carved into regional domains by the architecture of the initial privatisation process. Even those utilities which are not still serve definable regions and run into particular local concerns, like broadband speed and coverage in rural areas.
There is a clear case that they should be overseen by those who rely on them and potentially those who work within them, provided that this is on a not for profit basis. In most cases, there is a clear case for local control over the delivery side of the business. Whether it is done through local government collaboration or via cooperative means, the case for publicly controlled utilities is strong, and lacks a real alternative. Greater ambition is the only sensible answer.