Budgets will be cut by an average of four percent (not the 1.7 percent that Eric Pickles, the Tory minister in charge of councils, suggested when he announced this year’s local government budget in the minutes before his office closed down for Christmas on 21 December).
The announced settlement will also mean vicious cuts in 2014-15. An additional average cut of nine percent will kick in for the financial year 2014-15.
These headline figures mask the scale of what will happen in some parts of the country. According to Local Government Chronicle, “Cuts to some council’s core grant allocations could be as high as 15 percent …potentially rising to almost 40 percent by 2014-15”
The hardest hit councils are, overwhelmingly, located in the north of England in some of the country’s poorest areas. Places such as Preston, Burnley, Barrow-in-Furness and Hastings will face reductions in their start-up funding assessment figure in excess of 20 percent over the next two years.
The scale of the cuts necessary to achieve such targets is almost beyond belief. There will be massive job losses. Services for all people will be devastated. Services for vulnerable people (including children’s services, older people’s services, provision for people with disabilities and a range of special needs) will be left in tatters. Libraries, sports centres, theatres and all matter of cultural events and services will be shut down.
What we are facing over the next two financial years is a “year zero” for local government services.
The government claims these figures will be offset by gaining access to a new “efficiency support grant”. To receive it councils must “improve services”. Now we all want better and improved services. But this is Toryspeak. What the government wants is a fundamental change to local government and local service delivery.
The “efficiency” grant will kick in when councils move towards shared services between councils or outsource vital services to for-profit organisations.
The Tory dream is to establish local “enabling” government. This means a local authority that “enables” services to be delivered by a range of providers, but does not provide the services itself.
They have been moving down this road since the mid-1980s. The outsourcing, PFI and academies programmes under Labour further deepened the trend.
The TUC estimated that before the 2009-10 spending review almost a quarter of the public sector budget of £334 billion went to privatised outsourcing companies
But the present crisis is being used as a cover to initiate the wholesale outsourcing and privatisation of services.
Alex Magni, analyst at HSBC, has estimated that the local government service market will grow to a potential £5 billion by 2015. “Contract activity has ramped,” he told the Financial Times. “The UK’s austerity programme is entering a more fruitful phase for outsourcing companies.”
These outsourcing companies are now massive. They include Serco, Compass, Capita, Atos, G4S and Veolia – a list of some of the most notorious companies working in Britain today. To get some idea of their size, look at some of the latest figures from Serco. Revenue in 2011 was £4,646 billion, up 7.4 percent on the year before, while profit before tax was £262.2 million (a rise of over 13.4 percent). No wonder share earnings were up by over 14 percent.
Some people and companies are doing very well out of the austerity policies of the coalition. But the Tory dream will be a nightmare for us. It will mean massive job losses. Permanent jobs in local government will be replaced by cheap, insecure jobs with outsourced, non-unionised delivery firms.
It will mean much poorer services, delivered by for-profit companies – more interested in the bottom line than meeting people’s needs.
And it will mean unaccountable services with local democracy completely marginalised as local government becomes a rubber stamp for service delivery contracts.
Given the scale of the devastation that is coming to local government surely we need to ask Labour councillors: How bad will things have to get before you resist the cuts? If not now, when?
Labour councils across the country are committing to cuts budgets. In the 1980s Labour’s leader Neil Kinnock, in the face of an earlier assault on local government by Thatcher and calls by some Labour councils to set illegal budgets, argued for what he called a “dented shield” strategy for Labour councils. He argued that Labour’s job was not to resist cuts, but somehow to protect services as best they could and show themselves fit for government. “Better a dented shield”, he argued, “than no shield at all”.
Such logic means that Labour councillors become the front-line cutters of services. But now it also means that they will enthusiastically outsource and merge services “to protect them”!
It means that, wherever possible, they are selling off “the family silver”. Councils are selling paintings and artworks, historic buildings and architectural sites of value.
In Preston the city council are going to sell off the bus station because we “need to protect services” – though they are going to merge and sell off services as well. But selling off our cultural heritage is a cut, just as much as closing a service. In the words of the Lawrence Strikers in the early 20th century “We want bread, but we want roses too”.
There are some (albeit small) signs that some Labour councillors are no longer willing to implement Tory cuts. The Labour Representation Committee councillors’ campaign is signing up councillors who have pledged not to make a cut (though, unfortunately they have so far not added my name to their petition!).
This is a welcome development. Local anti-cuts groups should pressure their councillors to join this, and other campaigns, against the cuts. But now we need more than weasel words.
We need councillors to join local community and union campaigns and be part of the fight to stop every cut and put our needs before the profits of Serco and their likes.
Michael Lavalette is an independent socialist councillor in Preston.
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