Frequently quoted examples comparing the impact of the new LG funding formula on Liverpool vs Windsor, Manchester vs Surrey, demonstrate the point graphically. Labour groups need to make people aware not just of this, but of the dichotomy which is inherent in much of the Tory and Liberal Democrat rhetoric. Certainly here in Blackpool, we were perpetual losers under the ‘floor and ceiling’ damping mechanism employed by the last Labour government. For those lucky souls who aren’t obliged to understand local government finance, this meant that (in a classic demonstration of ‘third way’ policy) the government worked out how much funding poor, urban areas needed, published the figure – then didn’t give us the money (instead, introducing a taper mechanism, so that better-off authorities didn’t lose huge chunks of funding suddenly, and that the redistribution would take effect gradually). Because we were (in a way) placated by considerable amounts of area based grant, and Working Neighbourhoods Fund monies, we limited ourselves to quiet ‘lobbying’ to get the tapering period shortened as much as possible. Crucially, however, Tory and Liberal Democrat councillors up and down the land, made a huge scene about the fact that the dastardly Labour government was ‘robbing’ councils of the funding that they were entitled to.
Bear in mind also the Tory and Liberal Democrat responses to the huge investments made by the last Labour government. I don’t recall many voices in local or national government arguing that we didn’t want new schools, new hospitals, more doctors, nurses, police officers, a stable financial sector in the midst of a global cash crisis – or any of the other hare-brained schemes that we are accused of ‘wasting’ money on.
Across the UK, Tories and Liberal Democrats were the boys who asked for more, not less. Therefore, their newfound critique of the deficit rings somewhat hollow.
How Labour groups respond to the challenges raised by severing the link between need and funds is worthy of a whole chapter, if not an edited collection by people a whole lot smarter than me – but consider three basic principles:
(1) What do people want their councillors, and their councils to do? Come at the top of the CAA star ratings? Be awarded Beacon Status for corporate embroidery? Become Pathfinders for an LGA pilot scheme on ‘Place-shaping’? Spend 100+ hours conducting a thorough review of corporate procurement strategies? I would venture not. Back-alleys, public toilets, clean, well maintained pavements, a good refuse service and a regular surgery will do you far more good than any of the above. When setting budget priorities, it is your electorate and your workforce who take priority, not the CLG / Audit Commission or, dare I say it, the LGA.
(2) Challenge the hypocrisy. Ask your Tory or Liberal Democrat opposite numbers which three major pieces of government funding your town or city should have been denied between 1997 and 2010. Ask them why they were always calling for more funding (ergo more borrowing) not less?
(3) Think to the future – we’re accused of making cuts for reasons of political expediency – which we all know is nonsense on stilt. However, we do need to think about the funding settlements for 2012-15.
Crucially, we need to be prepared for the day when we have to enter into PFI deals, and/or the bond market, in order to raise revenue (never mind capital) funding.
Finally, when Pickles turns round to us and says that the CLG will now fund local government on the basis of our ability to MEET need (rather than merely demonstrate need) – are our authorities in a position to respond? If not, they need to be. Because if, or rather, when this becomes formalised as the methodology for funding councils, then the risk of Labour areas falling finally and irretrievably into an underfunded underclass, unable to respond to the circumstances of its residents, becomes both very real, and very debilitating.
Read also… Lambeth Labour leader Steve Reed on how Labour can lead the way in campaigning against and managing the impact of the cuts