Make local government funding campaign issue says SIGOMA chair

Posted on July 06, 2023

‘Labour must reverse council cuts and base funding on need, not local wealth’

As the saying goes, all politics is local. For all the spectacle and drama that Westminster politics brings, the reality is that most people’s everyday interactions with politics come at the local level.

Whether your bins are collected on time, anti-social behaviour and littering is dealt with, and whether your parents or children can receive the care they need: at their very core these are all questions of local public service provision.

These are not particularly glamorous issues but ensuring that local services receive the funding that they deserve goes to the heart of any functioning society and can only be achieved through properly funded local councils who are working day in and day out to address these areas.

Over the past 13 years, we’ve seen the effect that continuous cuts to local authorities have had up and down the country, and the devastating impact that this has had on people’s everyday lives. Yet even in an environment in which budgets have been cut across the board, the heaviest burden and effect of these has fallen on England’s most deprived regions.

Councils’ funding black hole is not sustainable – fixing it should be a Labour priority

Research published earlier this year by the Special Interest Group of Municipal Authorities (SIGOMA), which I chair, revealed that over the past decade, England’s most deprived council authorities have seen a cut in budgets almost three times as high as the richest areas.

Unsurprisingly, places such as Blackpool, Knowsley, Hull, Middlesbrough, Stoke, Hartlepool and Blackburn – among those targeted as part of this government’s levelling up agenda – have lost out the most and still continue to do so despite the Conservatives’ 2019 election manifesto pledge to ‘Level Up’ much of the country.

It is right that any conversation about levelling up begins with the question of public service provision. Yet far from levelling up, this government has engaged in a targeted and sustained effort to level down large swathes of the country.

With reports emerging that many more councils across England are at risk of insolvency and struggling to fill the £3bn black hole in funding through inflationary costs and ever growing demand for their services, it’s clear that the current system is not sustainable.

Fixing this system should be among the first priorities of an incoming Labour government, with considerable lessons to be learned from our successes, and failures, when we were last in government.

Morally, the case for action is clear. Giving public services the funding they need is crucial to underpinning a functioning society, while helping to tackle issues such as poverty, inequality and insecure housing goes to the very heart of our mission as a movement.

Naturally, local authorities – that ensure the delivery of these services in their community day in and day out – are best placed to know the amount of funding they require, which areas of priority require short-term funding and how best to invest in sectors that are likely to generate long-term growth across their authorities.

Failure to deliver for austerity-hit towns risks losing communities’ trust again

Politically, it makes complete sense for Labour to put this offer of local government reform at the heart of its domestic agenda too.

The route to power goes through towns like Blackpool, Hartlepool, Hull and Stoke and, if the party speaks to and tackles the genuine issues facing voters every single day with a bold, confident and most of all, competent, offer for real change to address inequality between authorities rather than accelerate it, then it builds for a decade in power rather than just one term.

Labour lost many of these voters in 2019, but the process of losing trust in these areas had been years in the making.

Recently, we’ve been given a second hearing by many of these areas, and it’s crucial that we deliver for them by showing what a transformative Labour government can deliver for their communities.

Failure to do so risks losing these communities again, and they may not be so generous in returning their votes next time.

Funding should tackle deprivation, not support wealthier councils’ gains

Should Labour enter government next year, it won’t just be enough to give a short-term increase in the pot for local government funding. Instead, we should deliver structural change which can’t just be washed away by another Conservative government enacting cuts across the board.

We must move back towards a revenue funding model that focuses on supporting the cost of delivering services rather than supporting the gains of wealthier councils who raise most from business rates and Council Tax.

Under the last Labour government, a needs driven formula underpinned the vast majority of council funding up to 2010; it now forms just over a third with the poorest councils losing as a result, with grant funding plummeting.

There is scope to incentivise councils to grow business rate income but the main priority should be funding for services in which the impact of deprivation is fully recognised. This is an opportunity to rebalance the system without costing the earth –this programme for change is well deliverable within our party’s own fiscal rules.

Labour has a once in a generation opportunity to deliver radical and lasting change for communities across the country. We must not let this slip.

Read the full piece in Labour List here.