What must East Anglia’s local councils do to prevent a crisis in the future?
PUBLISHED: 06:00 08 February 2018
For nearly a decade finances have been very tight for local councils in this country – ever since the Labour government was voted out of office in 2010 Whitehall has put the squeeze on local authority spending.
The freedom to raise council tax has been curtailed and government grants have been slashed. They are set to disappear altogether by the beginning of the next decade.
That has left councils – of all political complexions – facing some very difficult choices about how to deal with the “Age of Austerity.”
Now government restrictions have been eased rather. This has not seen the amount of money given to local authorities by Whitehall increased. Rather it has seen central government “allowing” them to raise council tax bills by more than in the past.
That means council tax payers in Suffolk are facing rises this year of just under 5% on average – although the exact sum will vary from district to district and from parish to parish.
It’s easy to blame the local authorities for this – but the real villain of the piece (if you believe that raising taxes is villainous) is the central government that has mercilessly cut back on its support for councils in a bid to keep its own tax demands down.
It has underfunded councils (of all political persuasions) in a bid to transfer the blame for tax rises from itself to local authorities.
Councils can complain and beg for more money, but this has tended to fall on deaf ears – but they cannot afford to ignore the facts of life.
This week we’ve seen Northamptonshire County Council effectively running out of money. Quite what effect its “emergency cap” will have on services in that area is not clear.
But I suspect it will not be easy for people in that part of the country who want to visit their local library, get school transport for their children, or get their potholes filled.
That will cause a ripple of concern among councillors everywhere – and should be a wake-up call to those authorities who think they can ignore what the government is doing in the hope that in they end they will ride over the ridge with help like the US Seventh Cavalry!
Interestingly when I’ve questioned Suffolk County Council’s cabinet member for finance Richard Smith about why the authority hasn’t taken the opposition’s advice and spent more of its reserves he’s said he didn’t want to dip into them until absolutely necessary – giving Northamptonshire as an example of a council that could be heading into trouble.
What is also noteworthy about this is, of course, that Northamptonshire is not what most people would expect to be a “profligate” authority.
It is Conservative-controlled, and Tories are usually known for keeping a tight rein on finances, and as an occasional visitor to that part of the country I’ve never felt it is an area that displays massive local authority extravagance!
What it does show is that authorities and councillors need to be very aware of the difficulties they face when trying to juggle local government finances.
It is why increasingly we are seeing smaller authorities coming together and merging – giving them more economies of scale and making them more able to resist the difficult issues that can hit them.
It’s all too easy for people to regard councillors as well-meaning amateurs playing politics – but the operation of a local authority is a very important responsibility.
And let’s face it, the people who really must believe they are more than well-meaning amateurs playing politics are the councillors themselves.
It’s all very well to have strong principles – but the fact is you have to also understand what your decisions will mean in the real world.
We have recently seen Ipswich council investing heavily in property in a bid to boost its income – something other districts in Suffolk and elsewhere are also doing.
It’s perhaps not the most “Socialist” way for a Labour council to bring in extra money – but if it allows more money to be spent on services, is that such a bad thing?
I’ve been covering councils for several decades now and I don’t really remember a time when there hasn’t been a crisis – or at any rate a dramatic reorganisation – somewhere on the horizon. But I’m not sure that will stop our councillors looking over their shoulders at events in Northamptonshire this week.