Why the UK’s “Attlee moment” should include local government

Four local authority bailouts show that any “endemic recovery plan” requires proper funding of key services.

Boris Johnson and Rishi Sunak are reportedly planning to set out an “endemic recovery plan” in the 3 March budget, a “jobs first” stimulus package likely to entail “high state spending for a decade”, according to The Times. As the government looks set to dig even deeper into its coffers and set out its “levelling-up” agenda, this morning Keir Starmer will set out a similar stall in his “new chapter for Britain” speech on the post-Covid economy. As commentators on all sides of Westminster’s divides talk of an “Attlee moment” for the UK, there is recognition of a unique opportunity for an era-defining, transformational government once lockdown restrictions have eased. 

But while Treasury largesse on the furlough programme and business grants have been welcomed by organisations as disparate as the Trades Union Congress and the Confederation of British Industry, the spending splurge has not yet filtered down to the local authorities responsible for delivering many key services.

Last week it was announced that four English councils – Eastbourne, Bexley, Luton and Peterborough – had received emergency funding from the government after being unable to balance their books. Unlike central government, councils do not have the luxury of being able to run large deficits on day-to-day spending. The pandemic has added strain to local authority finances, which are already in tatters because of severe cuts to council budgets. Since George Osborne’s 2010 Spending Review, successive secretaries of state at the  Ministry of Housing, Communities and Local Government (formerly the Department for Communities and Local Government) have overseen a cumulative 50 per cent drop in funding, the largest of any government department. Research by the BBC last year found that, of 173 authorities surveyed, 148 predicted a budget shortfall for 2021.

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The House of Commons’ Public Accounts Committee has warned of the danger this poses. In January, the committee published a report saying that the “financial sustainability of some local authorities presents a significant risk to government”. The annual Whole of Government Accounts findings said the committee “expect[ed] that more local authorities will soon be unable to balance their books and will be forced to issue section 114 notices”.

These notices – effectively declarations of bankruptcy by local councils – will be a cross-party affair. Bailed-out Eastborne and Luton are run by Liberal Democrat and Labour administrations, while Bexley and Peterborough are Conservative. Communities Secretary Robert Jenrick has conceded that the financial difficulties of many councils are down to the deleterious effects of Covid-19 and lockdown, but he insists that in other cases “very poor management” is to blame. This narrative of deserving and undeserving councils implies that profligate authorities are piling up unsustainable and irresponsible levels of debt. 

Read more: “Whatever it takes”: Has the government broken its promises to local councils?

Just before the beginning of the first lockdown in March last year, Jenrick promised local authority leaders that the government …read more

Source:: New Statesman


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