The Big Picture
Recently my local newspaper challenged me and my neighbouring Conservative MP to come up with some answers after a feature on council cuts which are being made in our area. I had pointed out that with inadequate funding from central government the council had their hands tied and we should lay the blame with the Conservative Government at Westminster.
My neighbouring MP had said the council had plenty of money but didn’t manage it well. I imagine he was left fuming when our local Conservative councillors wrote to Theresa May saying the council wasn’t being funded adequately enough to fund local services!
So the local MPs were challenged to bring forward their solutions to the funding crisis facing our local authorities. We are still waiting to hear a fleshed out explanation from my neighbour but I set out exactly what we could do differently, because these cuts aren’t economically necessary, they are political choices.
There are two simple things Government could do which would see local councils not having to make the kind of cuts they have been forced to do: a fair funding settlement for local authorities and allowing local authorities to take action to mitigate the impact of Government cuts.
First we need to be clear about the scale of the challenge facing our local authorities. Take Lancashire County Council as an example. Due to Government cuts
it has been pushed into an impossible situation.
Over the next five years the council needs to make savings of £262 million, more than a third of its current budget. This is on top of the 60% reduction in the money it receives from the Government since 2010, which will rise to an 80% cut by 2020.
We need a fair funding settlement for local authorities. One which, unlike the current settlement, doesn’t discriminate between those run by the Tories and those run by Labour.
While Tory councils see an average fall in spending power per household of £68, the equivalent cut for Labour councils is more than £340 per household – five times higher. Surely this is no
Proper funding of our local authorities should be a priority of this Government rather than tax cuts for the wealthy such as the abolition of the 50p tax rate and cut to capital gains tax. I want to see a genuinely progressive funding system for local government, based on the needs of
Government is about choices. Instead of choosing to make cuts to HMRC staff who collect taxes, investing in HMRC would give them a fighting chance of collecting the £16 billion a year the National Audit Office estimates is lost to tax fraud every year. Funds raised here could be used to support our local services.
There are other steps which could be taken by Ministers immediately which would allow local authority to take action to mitigate the impact of Government cuts.
For instance, local authorities should be given greater power to regulate the bus services in their area. This would allow them to take decisions on routes, fairs and services so that profitable services could be used to subsidise those which are less well used but a lifeline to those that use them.
There is also no reason why local authorities should not be able to set up their own bus company and run the bus services in their area if this is what the community decide is right for them. It is estimated that such an approach could unlock £500 million across England.
We should also be giving local authorities the freedom to borrow money against their housing stock in order to build more homes.
These are sensible measures which any Government genuinely committed to localism would be proud to introduce. This Government however is putting its ideological opposition to council housing and publicly owned transport ahead of the needs of local communities. Unless it radically changes course in the very near future things will get worse before they get better.
Finally, there is no doubt that there is a north-south divide in this country. I see it when I travel down to London every week. I’m pleased that Labour would set up a national investment bank and regional development banks to help unlock £500bn of investment and lending.
The regional focus of development banks – including Labour’s “Bank of the North” – will enable the government to make sure investment and lending is spread around the country.
It’s perfectly possible to fund bus services, libraries and children’s centres. After all, we were the fifth largest economy in the world. To fund these services it comes down to choices. Political choices.
I say we call time on the Conservatives’ so-called economic plan which lies in tatters now after they have abandoned their discredited surplus target, and instead value the important public services which we all rely on.