Did you ever see the comedy show Little Britain and the famous sketch ‘the computer says no?’
No matter how many questions someone asks the receptionist they always get the same answer. It is a funny sketch.
And the government’s approach to austerity has taken the same path. No matter how much evidence is produced on the unfairness of public expenditure cuts the response from ministers is always ‘government says fair’ only this time it is not so funny. The most vulnerable people and the most deprived placed are paying the biggest price as the chancellor attempts to balance the books.
The latest review of government spending reductions from the Institute of Fiscal Studies tells us a familiar story: it is the poorest who are being hit hardest and its local government and local services bearing the brunt.
Over the last five years many councils have seen expenditure cuts of up to 40 per cent with the threat of more to come. Yet those reductions have not been evenly spread.
As the IFS indicates it is grant dependant authorities with low council tax and business rate bases who suffer most. They do not have the economic strength to replace their lost income. The gap between more prosperous places and poorer ones this continues to grow and as well as losing services, poor people have also seen many of their benefits reduced – a double whammy. Generally, the further north you go the worse the position becomes but London and particularly those east London boroughs who were grant dependant has also taken more than its fair share.
Of course, the government has tried to hide the damage by talking about reductions in spending power rather than budgets. This measure takes in other public services spending such as the National Health Service, but even here the position remains the same. When confronted with the evidence not just from the IFS but parliament’s own public accounts committee and the cross party Local Government Association, government still says ‘fair’ and those in the north being pushed to the brink are branded as whingers.
There is no doubt local government is also a victim of its own success. Despite the challenges councils have adapted, innovated and rethought themselves to try to protect vital services such as protecting children and adult social care, but after five years even these services are creaking. Staff are under huge pressure, sickness levels are rising and statutory responsibilities struggling to be met.
We cannot go on meeting like this – something will have to give.
Tell this to the Tories and the reply is they will keep cutting even when the accounts are in balance. It is not that they do not know or understand the problem is they simply do not care.
But will Labour be any better? Concentrating on the current account deficit rather than total debt means less cuts overall going forward but what about local government and the thorny issue of distribution? An incoming Labour government will have to have broad appeal across the country, particularly if it is in some kind of coalition, to survive. But if it forgets to help those in need, particularly in the north who is to say they will not face the same problems there, as they now do in Scotland?
The IFS make it clear ‘If a future government wanted to ensure that future cuts to local authority spending did not fall disproportionately on those authorities that have already experienced the largest cuts in this parliament – that is, those that were initially most grant reliant and had higher levels of population growth and deprivation – it would need to reform the current funding arrangements’.
They are right of course but what does an alternative look like? The LGA and the Society of Local Authority Chief Executives recently published a report on devolution to local councils and new financial arrangements to support it.
The report has much to commend it but it requires significant legislative change and is a ten-year strategy. Many councils do not have that long left.
We need short and medium term changes not to protect councils but their services.
My own organisation, the Special Interest Group of Municipal Authorities, has produced a workable, fair and balanced alternative to the current model. It allows for both incentives to councils and government from tax receipts but crucially is based upon equalisation across core services.
For too long the nonsense of 100 per cent localisation of business rates and all councils becoming self-sufficient has led to flawed thinking in the sector and Labour has been as guilty at the Tories on it.
Consequently, the localisation of business rates away from revenue support grant has made the cuts worse for those who need help most.
People in poorer places have a right to dignity in old age, as those in prosperous ones. They have the right to know their children are safe and their communities safe to live in.
We will only get that through well informed and costed equalisation of services based upon need.
It is called redistribution! Is that not what Labour is fundamentally about?
Devolution is a laudable objective to ensure money is better spent and communities more engaged in their futures but is not a substitute for fair funding of public services. Without a balanced financial framework underpinning it devolution – particularly fiscal devolution – will only widen those gaps between people and places. The Tories may be happy with that but Labour should not be.
——————————
Stephen Houghton is leader of Barnsley council