Your support keeps us publishing. Follow this link to subscribe to our print magazine.

Saving Local Government

Nine years of Tory cuts have left local government in Britain on its knees with budgets decimated by 60%. Labour's manifesto should commit to radical plans to rebuild our councils.

Labour’s election campaign is well underway, and our policies are some of the most exciting and transformative that I have ever seen in my time as a party member. From renationalising rail, mail and utilities to a Green Industrial Revolution delivering warm homes for all across the UK’s 27 million homes and the institution of a National Education Service, this manifesto could transform our country on a scale not seen since the 1945 election.

But notwithstanding our fantastic array of policies, as a local authority leader one of the areas I still feel could be further developed is our approach to local government. Labour councils up and down the country are struggling – nine years of Tory austerity has taken its toll, hollowing out and disempowering this critical delivery arm of the state, with vital services and functions of local government barely surviving.

But treated correctly, I believe that a strong local government manifesto could help utilise local authorities to become a hugely influential arm in the delivery of Labour’s 21st century socialist agenda. Here are nine points I think we should implement on day one of a Labour government.

1. Fair funding for local authorities, based on a serious methodology for assessing relative need rather than crude per capita models, arbitrary ring-fenced targets, and competitive bidding processes.

We need to revise the methodology for funding local government in this country, genuinely accounting for the services that are provided at a local level. At present, the methodology for calculating council’s share of the ‘Revenue Support Grant’ (RSG) is not robust and has become the subject of political cronyism with the advent of ‘transitional’ grant funding and sweetheart deals on social care.

Since 2010, the RSG has been salami-sliced each year to make savings for the Treasury, while councils are forced to increase council tax and precepts to try and make ends meet. Government also finance councils through ring-fenced grants and competitive bidding processes, both of which have their methodology skewed towards wealthier Tory areas at the expense of impoverished Labour areas. In one instance, 80% of grant funding for housing and infrastructure was spent in London and the South East because the methodology favoured areas with the highest land values.

A new methodology should be drawn up which accounts for local incomes, health and social care needs, demands for truly affordable housing and other vital indications of poverty and inequality.

2. More funding for local authorities. The Local Authority budget needs to be significantly increased. Since 2010, local authorities have lost over 50% of their funding – we have been among the most extensively cut area of public spending, with the Local Government Association (LGA) finding that local government has lost 60p in every pound. We need to be funded to the best standards of practice, measured against the most proficient systems of service delivery and care anywhere in the world. 

3. Local government pay reform. Unlike other areas of the public sector, local government pay and the annual pay bargaining that takes place following the submission of the trade unions’ pay claim are not financed by government. This means pay increases for staff comes directly out of the council’s budget for services, taking even more from local residents.

There is no need for this – all local authorities should be paying decent terms and conditions to set standards as agreed between unions and government through representative bodies. Bring councils in line with the rest of the public sector!

4. Revision of the council-tax system. We need to reverse the centralisation seen since the introduction of the Poll Tax in 1980, and subsequent hybrid models of council tax and business rates which emerged afterwards.

Council tax and business rates are regressive forms of taxation – much worse than the flexibility of the previous rates system where local authorities chose how to value contributions from ratepayers locally. We need a return to a more flexible model for collecting local tax which is more sensitive to resident and household affordability, as well as responsive to local demand and need.   

5. Reform of planning powers. We desperately need a reversal of national regulation as prescribed within the National Planning Policy Framework, particularly the loopholes which allow developers to refuse to contribute to local infrastructure and affordable housing by claiming such contributions make their schemes non-viable. Planning powers and resources need to be weighted back towards local authorities on issues from planning stipulations to powers of compulsory purchase.

In addition to this, the National Planning Policy Framework needs to be updated to close other loopholes which allow financial speculation on the value of land, driving up prices and contributing to our national affordability crisis.

6. Housing. Only Councils building millions of new homes can solve our housing crisis – but Right to Buy makes it impossible for them to do this at the necessary scale by removing the security and confidence they have in their investments.

We need to end Right to Buy (as they have already done in Scotland) and give councils the power and resources to build for social rents. Councils also need more powers to regulate the private rented sector – selective licensing schemes with real teeth, the ability to control local rents and more powers to fine landlords found to be renting substandard properties.

7. Municipal services. The municipalisation agenda is incredibly important for Labour’s local government ambition on many levels:

Localised, decentralised energy systems can play a hugely important role in the low-carbon agenda, promoting affordability and renewable energy sources.

Local transport franchising powers for local authorities would allow for the strategic planning of transit systems, integrating modes of transport, promoting walking and cycling, whilst reducing costs.

Commercial and development powers for local authorities can be an excellent source of income as well as tools for regeneration and redevelopment. Not to mention that council-owned and managed services provide the most efficient and effective model for the provision of neighbourhood services in almost every area, from roads to parks and schools. 

We need to give powers to councils to explore a range of municipal service delivery options, such as regional energy companies, better transport franchising powers (trains, buses and metro systems) and development companies to intervene in their local housing, regeneration and commercial property markets.  

8. Devolution of health powers. The integration of child and adult social care with NHS provision has been very effective – however, clearer safeguards must be put in place to ensure democratic oversight of services, while also protecting the profession of social work.

9. Education. We need to reverse academisation, bringing schools back into local authority control – this is the only route back to the comprehensive education system that transformed this country for the better after the Second World War.

Taken together, these nine steps alone could help Labour transform the country for the better. If we commit to real change at a local government level and undoing the damage done by Tory cuts, councils could be at the forefront of Labour’s agenda for widespread social transformation, delivering a Britain for the many and not just the few.