Hackney Community Law Centre is facing a financial crisis brought on by a Labour council cutting its funds. Many law centres are going to face the same as central government slashes central grant funding to local government – most at the hands of Labour councils.
It is not just legal services and law centres that are facing the funding crisis. From libraries, to youth clubs, from care homes to other essential services, austerity has forced the pace. Let us make it clear these are Conservative cuts to local government finances, however Labour councillors with all the characteristics of a modern day Uriah Heep ‘ever so ‘umbly’ carry them out declaring ‘there is nothing we can do!’ This is cowardice and a dereliction of their current and historic duty. Labour was established by the trade unions and the working class to advance their interests not to represent the ruling class.
In 2018 the Public Interest Law Centre (PILC) through judicial action stopped the forced sale of Southall Town Hall. The home of many charities and community groups, the sale of the town hall would have made all of them homeless. Without a base, many of these vital community groups would have ceased to exist. The sale according to Ealing council Labour councillors was necessary to ‘plug the gap’ in the cuts expected in the council’s finances. Campaigners were told ‘there was no alternative’. Since the successful judicial review action the council have not re-visited the decision, and the sale (at least at this stage) has been stopped.
We’re all in this together?
Austerity, the brainchild of the Tory/Liberal coalition and nurtured by the current Conservative government, has been a disaster for every region in the UK. It was and is a political decision not an economic one, and as a result child poverty has exploded. It is a national scandal, The Independent last month reported: ‘The number of youngsters who fall below the poverty line rose to 4.1 million between 2010-11 and 2017-18… . More than half of youngsters are affected in some areas.’ It is estimated that by 2010 it will be 5.1 million. At the same time 17,000 benefit claimants have died waiting for benefits.
Libraries, the universities of the working class, have closed by their hundreds. A financial the banks has not resulted in criminal charges being brought against major institutions. On the contrary, we are witnessing a mushrooming of other types of banks; food banks. It is the poorest sections of the working class who have borne the brunt of the neo-liberal financial chaos that followed the 2008 meltdown. It is now reported that food banks provide 1.6 million food parcels per year.
As a tsunami of austerity cuts has devastated working class communities, for the City of London and its financial institutions it has been business as usual, City A.M reportedthat profits at the UK’s publicly listed companies jumped ‘nearly 14 per cent in the third quarter of the year, pushing total profits over the last 12 months to a record £217.9bn’. The financial crisis has brought levels of poverty unseen in modern times in the UK – employment levels maybe high, but having a job is no escape from poverty. Austerity has seen the Conservatives achieve record levels of poverty and a strategy of death by a thousand cutshas had a massive effect. Yet at the same time Philip Hammond the Chancellor claimed in a BBC Newsnight interview: ‘I reject the idea that there are vast numbers of people facing dire poverty in this country. I don’t accept the UN rapporteur’s report at all. I think that’s a nonsense. Look around you; that’s not what we see in this country.’
Cuts, cuts, cuts…
Local councils have been the frontline instruments of austerity for the past decade. No other area of government has been subject to the same financial squeeze. Over the past decade local councils have seen their funding cut by 37%. This is set to increase over the next five years. The scale of the financial cuts continue to be wide ranging, from bus services – used mainly by elderly, school children and the less well off, being cut by 25%. Leisure centres, swimming pools, and playing fields have been closed or sold off. Investment in arts and culture has seen a 20% cut, with at least 343 libraries closing since 2010. Library staff has been cut by 25%.
This gallery of ruin has seen housing services cut by 23%, with the number of homeless families increased by 42% in the same period. Women’s refuges have had drastic cuts with 32 specialist centres between 2010 and 2014 closing – with more to follow.
There is no doubt that local councils are caught in a whirlwind of obligations and financial constraints. Sadly, for Labour councillors the way to deal with this is to rationalise, carry out the cuts expected, and point at the lack of central government funding to renege on their responsibility. They cling onto the ‘only carrying out orders’ defence. As they diligently follow the Conservative spending targets they argue that ‘there is nothing that can be done.’ This is not only an abdication of duty, it is political cowardice.
Labour councillors: abdication and failure
This abdication of responsibility representing a failure to fight by Labour councillors, is politically criminal. It fails the people they claim to represent, and it ignores the history of local government generally, and that of socialist Labour councils more specifically.
Modern local government began with the 1835 Municipal Corporation Act (the 1833 Burgh Reform Act in Scotland), emerging as a site of struggle between the growing industrial capitalist class and the old aristocratic ruling elite. The rise of the organised labour and trade union movement brought new forces into play. Local government expenditure actually outstripped national expenditure for most of the 19th century and local councils expanded throughout the 20th century. That expansion also saw the expansion in the Labour party as the expression of the working class itself.
Indeed as local councils expanded, their ability to influence the national agenda also developed. For example the Housing Act 1919, which opened the way for large-scale council housing, was a direct response to the movement which took place against profiteering landlords during the first world war. The 1915 Glasgow rent strike involved 25,000 private tenants and saw supportive action organised by the Clyde Workers’ Committee in the city’s factories. The victory in the equalisation of ‘poor relief’ expenditure costs between richer and poorer boroughs in 1921 was the result, not of the generosity of central government but of the stand taken by socialist Labour councillors of the Poplar in East London. They were prepared to go to jail under the slogan ‘better to break the law than break the poor’. Local councils, and local democracy, subsequently developed over the next 50 years with council increasing their responsibilities in delivering services, and having considerable freedom to raise finances through local taxation or rates (the forerunner of the council tax)
The financial crisis fueled by increases in oil prices, signified the end of the post-war upswing. It also saw a shift in the attitude of central government towards local councils. Beginning with the Housing Finance Act introduced under Ted Heath’s Tory government of 1970-74, this was a prelude to reigning in local council spending. By 1975 the right-wing Labour Environment Secretary Anthony Crosland signalled the end of the post-war expansion of the public sector by directing his comments at local government, he declared that ‘the party’s over!’ From bad to worse.
The Conservative Thatcher government that came to power in 1979, fueled by neo-liberalism and Chicago school Reaganomics began a sustained and protracted assault on central government finances, it reeled in local council ability to raise its own money. The Thatcher Conservative government introduced 120 items of anti-local government legislation from 1979. The onslaught saw the abolition of the Metropolitan County Councils and the Greater London Council (GLC). It saw councils stripped of direct funding responsibility for many services. Thatcher herself famously remarked: ‘I must take more power to the centre to stop socialism.’
It wasn’t so much an attack on socialism as an attack on public services that ‘crowded out’ the private sector. The neo-liberal Thatcher government directly attacked public services – not just by cutting them, but crucially by outsourcing them to private companies to make profits from public need. Complicit in that programme was a failure of Labour councillors at the time to fight back, and also later ‘New Labour’ councillors continuing this process during the thirteen years of Blarite national domination office. Indeed the turnover of private companies running public services was, by 2008, 126% higher than 1995-96 under the previous Tory government.
Labour councillors – a recent history of retreat
Despite all of this, local councils retain enormous powers, responsibility, and good will from the electorate. Councils in England control budgets totaling £114 billion – spent on services from housing to schools, youth provision, adult social care, libraries, museums, crime reduction, local welfare assistance, sports centres, parks, transport, highways maintenance, recycling and refuse collection, and have legal powers over many non-council provided services.
Local councils retain, despite carrying out continued cuts since the Thatcher years, a wealth of support. Polls consistently show significant support for councils. A national government Citizenship Survey showed trust in local councils as almost twice as high as trust in parliament. (With the current Brexit chaos in Parliament this wealth of support has no doubt increased.) A 2014 IPPR Future of England survey found that 39% of people thought councils should have more powers, compared to 14% who thought their powers should be reduced. A separate ICM poll found 57% saying that councils ‘should keep responsibilities in relation to schools’, compared to 32% saying schools should ‘cut free of local councils’.
Local councils are in a powerful position to fight back. It is just not true, as the big majority of Labour councillors try to suggest, that there is ‘nothing they can do’ but implement the cuts.
In justifying the cuts to Hackney Community Law Centre the chief executive for instance advised ‘that the Town Hall is aspiring towards a new model of an integrated debt and advice service which helps people resolve their problems at the earliest stage and find ways to help people address wider issues to help them live a happier more fulfilled life’. It’s as if the council is unaware what the law centre does. It is technical language justifying a cut with no firm proposals of what the ‘new model’ would be.
Labour councillors – a way to fight and win
Let us make no mistake, local councils are facing major cuts from central government. However, there is room to manoeuvre. The Localism Act 2011 provides local councils with an inherent ‘power of competence [to do] anything apart from that which is specifically prohibited’. We argue that this presents the issue of cuts, or more specifically fighting cuts as one of political will.
Labour councillors who are prepared to resist austerity can use councils’ reserves and ‘prudential borrowing’ powers to avoid passing on government cuts. Such a step needs to be linked to empowering the community, building campaigns against cuts and crucially linking with the wider labour and trade union movement. A mass campaign of opposition must be built to central government. Such a policy is completely within a council’s legal powers. Council finance officers can challenge a budget they believe to be ‘knowingly unbalanced’. In other words, deficit budget but it is not unlawful to set such a thing if it can be balanced in other ways. Thus, the use of reserves to meet projected deficits and finance debt repayments is legally a ‘matter of judgement’ for councillors themselves to make. As The Times reports, local authorities were ‘sitting on £21.8 billion of non-ringfenced reserves last year, £5 billion more than they had in 2017 and £11 billion more than they had at the start of the decade’.
As stated there is a way out. Indeed between 2010-11 and 2013-14, according to the National Audit Office, councils increased their ‘unallocated reserves’ by 16% in real terms. It is possible for socialist Labour councillors to present legally compliant no cutsbudgets based on the use of these powers.
We accept that councils using reserves and selective borrowing to avoid making austerity cuts would in effect be buying time. There is an inevitable showdown to be had with central government for extra resources. There is, ultimately, no ‘clever tactic’ or legal principle that can avoid the need to build a mass campaign against the cuts.
Any legal tactic therefore needs to be linked to a campaigning strategy. Thus, the best way for Labour councillors to contribute to the mobilisation of a mass campaign, necessary to defeat the cuts and to take on the Tory government, is to argue for budgets that meet the needs of their local communities, without massive council tax hikes. They should call for Labour councils to come together to demand that the government makes up the funding shortfall. Such a deficit budget clearly highlights what is needed, andexposes government cuts. This is not a new tactic.
Labour councillors – fighting cuts
In 1984 the socialist Labour council in Liverpool employed such a tactic to great effect. Indeed they forced the then brutal Conservative government of Margaret Thatcher to concede extra resources to the city worth up to £60 million (£98 million today). The campaign in support of a Liverpool ‘needs budget / deficit budget’ began even before Labour won a majority in the council in 1983. In order to put pressure on the Liberal coalition in charge of Liverpool council at the time, and to galvanise support for a future socialist Labour council, the trade unions on Merseyside organised a 25,000-strong demonstration in November 1983. After a socialist labour council was elected, and with the support of those same councillors, the budget meeting in March 1984 took place against the backdrop of a city-wide one-day strike and a 50,000-strong march to Liverpool council town hall.
Today’s anti-austerity movement is in a new situation, both finding expression in a Corbyn revolution and given confidence by it, but the momentum of his campaign must be used to prepare the ground now, as the Liverpool councillors prepared for their battle in 1984.
Let’s face a number of issues head on. Firstly there is, of course, no guarantee in any struggle of victory – but if you don’t fight, you don’t have a chance of winning. Currently the overwhelming majority of Labour councillors are still creatures of the right wing Blairite transformation of the Labour Party. They are indistinguishable from the Tories in their actions to cut jobs and services. Sadly, even those Labour councillors who want to oppose the cuts still hesitate believing there is another way out of this – avoiding the ‘Liverpool road.’ Having defied the Thatcher Conservative government for four years, the Liverpool councillors won lasting gains for the city. It was only the cowardice of the then national Labour leader Neil Kinnock who failed to support the council which allowed for the Liverpool councillors to be surcharged and dismissed from office in March 1987.
It is important to recognise that the law has changed since the 1980s. The Local Government Act 2000abolished the power of surcharge (to fine councilors) except, for example, in cases involving councillors personal benefiting from their own actions. Therfore the often cited excuse to justify the cowardice of Labour councilors, that of a surcharge, is no longer in place. The threat of appointing district auditors, a fate that befell the 47 socialist Labour Liverpool councillors, has now been rescinded given that the Audit Commission has now abolished.
The advent of ‘localism’ under the Localism Act sought to place councils in control, not just of central government finances allocated to them, but in terms of their ability to make cuts. Thus powers were restored to local councils by central government, as the Labour party under Blair became ‘more responsible’. As a result both the pro-business New Labour and Con-Dem coalition saw the advantages of ‘devolving’ the responsibility of making cuts to local councils. Thus shifting the blame from central to local government. Yet this shift allows the opportunity to control the fightback if the Corbyn insurgency can be developed, such complacency could rebound against central government.
The state’s reserve powers to appoint commissioners to take over particular council functions remain, although only after a legal process – which in itself could also be challenged both in and outside the Court. Central Government moving against a local council and deploying commissioners to take over would be difficult – particularly if there was wide support in the community for an anti-cuts budget. That would be even more problematic if several Labour councils take the ‘Liverpool road’ simultaneously and are backed by a mass campaign.
In 1990 Margaret Thatcher – the so called ‘Iron Maiden’ resigned. She was brought down in the face of mass non-payment of the poll tax. In total 13 million people were organised in anti-poll tax unions and refused to pay the hated tax. This illustrates that even the most imposing government can be forced to retreat if it faces a sufficiently powerful mass campaign of opposition. That mass movement was not only able to remove Thatcher but to force the Tories, within weeks of her downfall, to put an extra £4.3 billion into local government funding (around £8 billion in today’s terms) to finance the abolition of the poll tax.
The Tories’ local government base in urban areas has since been decimated – with literally no councillors to lean on in cities like Liverpool, Manchester, Newcastle, and Sheffield, and just a handful elsewhere (including many London boroughs).
Labour councillors have a decade’s experienceof passing on cuts. They wring their hands: ‘there is nothing that can be done’. This is political cowardice and they should be organising with the anti-austerity and trade union movement. A new generation is prepared to fight. Councillors who are prepared to join them could play a historic role in that resistance, and given the potential should no longer be cowed by surcharge. They have more power than they realise. Only the political will, and a strategy linked to a wider movement, is lacking.
