SocialismToday           Socialist Party magazine

Issue 206 March 2017

Who’s killing local government?

A recent essay in the London Review of Books by Tom Crewe, The Strange Death of Municipal England, attracted wide interest with its detailed story of the remorseless attack on local councils. But it underplayed the fact that local government is still an alternative power which, if the will was there, could become a force for resistance, argues CLIVE HEEMSKERK.

Tom Crewe’s essay, which appeared in the 15 December edition of the London Review of Books, provides a valuable account of how local councils have been the frontline instruments of austerity since the 2008-09 great recession.

"No other area of government has been subject to the same squeeze", Crewe writes, than local government, which accounts for around 25% of total public spending. "Since the start of the decade spending by local authorities has been reduced by 37% and is scheduled to fall much further over the next five years". George Osborne, Tory chancellor from 2010 to the summer of 2016, successfully "transfer[ed] the burden of responsibility for deficit reduction onto councils", Crewe argues, with no let-up signalled by his successor Philip Hammond.

The scale of the assault on the wide range of public services provided by local councils is well catalogued by Crewe: "Bus services paid for by councils in England and Wales, and mostly used by the elderly, schoolchildren and the less well-off, have been cut by 25% since 2010". "Park budgets have been hit, with three-quarters of local authorities laying off staff, and more than half selling off green spaces or transferring ownership".

"Hundreds of leisure centres, swimming pools and playing grounds have been closed or sold off. Four out of five councils have reduced spending on public toilets since 2011; 1,782 facilities have been closed in the last decade". Meanwhile, "investment in arts and culture has fallen by 17% since 2010: one in five regional museums has closed, or is scheduled to; one in ten is considering entry charges… at least 343 libraries (of 4,290) have closed since 2010, with at least another 111 closures planned for this financial year… The overall number of library staff has shrunk by 25%".

The crisis in the NHS, Crewe explains, is part of a parallel crisis in adult social care provided by local councils. There are record numbers of patients fit enough to be discharged who remain in hospital because there is no social care provision to enable them to return to their homes safely. "Between 2010 and 2015, £4.6 billion was cut from adult social care budgets in England", Crewe notes. "By 2014, nearly 90% of English councils were unable to offer any support for people with ‘low to moderate’ care needs (which includes those unable to undertake ‘personal care tasks’, ‘work or educational roles’ or ‘social and family roles’). Around two million older people now rely solely on support from family and friends".

Housing services budgets have been cut by 23% since 2010, while "the number of families identified as homeless has increased by 42% in the same period… Women’s refuges have had their funding reduced: 32 specialist centres for victims of domestic violence closed between 2010 and 2014. The TUC found that the LGBT charity and voluntary sector took a ‘real and significant’ hit in the same period. The list could be extended almost indefinitely". Indeed. But the question is, what can be done?

Misdiagnosing the history

Tom Crewe argues that "councils today are caught in a web of obligations, helpless to fulfil them without outside help, and at the mercy of a government that might choose not to provide it". The situation is such, he asserts, that "councils have no choice but to reduce their expenditure (and so, services) in line with any fall in their income" from central government. There is nothing they can do.

He counterposes this alleged paralysis – "at the mercy" of central government – to an apparent golden era when local government pioneered the development of public provision, not only in health, housing, education and welfare, but municipal utilities (gas, electricity and water) and municipal transport. He sets up a further false dichotomy between municipalisation and nationalisation, ‘localism’ versus ‘centralisation’, when how far the ‘public realm’ advanced, locally or nationally, was actually the product of a clash of class forces. He thereby misunderstands both the history of local government and the potential that still exists for combative local councils to become a catalyst for a new movement of working class resistance – were there to be combative local councillors.

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 and commercial capitalist class and the old aristocratic ruling elite. The rise of the organised labour movement brought a new class force into play, even before the founding of the Labour Party in 1900 as an independent party of the working class. Trades union councils, for example, stood candidates for the school boards established under the 1870 Education Act. Local government expenditure rose faster than national expenditure for most of the 19th century and the ‘local state’ continued to expand in the 20th century, accompanied by the rise of the Labour Party.

But this did not unfold in the way that Crewe describes. He argues that "once experiments undertaken by individual local authorities proved effective… they were legally mandated across the country", referencing "public housing in Glasgow" as an example. On the contrary, the 1919 Housing Act, 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.

Similarly, winning the equalisation of ‘poor relief’ expenditure costs between richer and poorer boroughs in 1921 was the result, not of a dispassionate ‘experiment in municipalism’, but of the stand of the Poplar councillors in East London, prepared to go to jail under the slogan ‘better to break the law than break the poor’. This element of the redistribution of wealth through local council spending is now being reversed with the Tories’ move to 100% business rates retention and the abolition, by 2020, of centrally-distributed revenue support grant.

Friedrich Engels, Karl Marx’s great collaborator, remarked in 1892 that "there are town councils which recognise their dependence on their worker-electors only too well and which will oppose the demands feasible today – employment in public works, short working hours, wages according to the demands of the trade unions – even less when they see in them the only and best means for protecting the masses against the worse socialist – really socialist – heresies". (Letter to Bebel, 8 March 1892)

This is a far more accurate assessment of the class interests that lay behind the rise of the local state than Tom Crewe’s suggestion that it was a ‘project’ – "the creation of the British state was a municipal project, and the state is now being unmade by the collapse of that project" – an amicable agreement between the capitalist class and the working class. It also makes it clearer what needs to be done to save local public services today.

The Thatcher pathogen

The same mistake is made in Crewe’s otherwise succinct summary of Margaret Thatcher’s sustained attacks on local government, continued by Tony Blair and Gordon Brown’s ‘New Labour’ governments.

While municipal gas and electricity providers were nationalised by the 1945-51 Labour government, and the National Health Service replaced municipal hospitals, the post-war boom saw a massive expansion of local government, so that by 1979 it employed 8.5% of the national workforce (compared to 5.7% today). Not without opposition, but mollified by an economy still moving forward, the capitalists acceded to the encroachment on their profits to finance the ‘local social wage’; and their exclusion from what would otherwise be potential markets if the services were not provided by the state.

The end of the post-war upswing, however, brought a shift in the attitude of the ruling class towards the public sector, including the local state, beginning with the Housing Finance Act introduced under Ted Heath’s Tory government of 1970-74. The 1975 "the party is over" speech by the right-wing Labour Environment Secretary Anthony Crosland signalling the end of the post-war expansion of the public sector – delivered in Manchester Town Hall – was directed in the first instance at local government. Then Thatcher came to power in 1979 and began what Crewe correctly describes as a "sustained assault" on local government. The Tories introduced 120 items of anti-local government legislation from 1979.

Crewe is right when he identifies "powerful Labour councils with democratic mandates" as a potential counter-power that could have "thwart[ed] Thatcherism’s desire to impose monetarist discipline and liberate the economy from its social democratic baggage". Her goal in attacking councils was to achieve "simultaneously the destruction of local government as a potentially rivalrous state-within-a-state, and the marketization of nearly every aspect of public policy". Crewe is also right to say that Blair’s policy for local government was "to leave almost all the new restrictions in place, to encourage more outsourcing, and to place ever tighter controls on funding".

But he is off the mark when he argues that "the establishment of a neoliberal consensus in Britain has been, in its essence and by necessity, an anti-municipal project". If municipal politicians accept neoliberal policies – privatisation and cuts to public provision – they can be given power because those are the policies they will implement. In other words, there is no ‘necessity’ for ‘anti-municipal centralisation’ at all when there are willing agents of neoliberalism attacking local public services from within the council chamber.

Chief suspect Blair

Compare Britain to the United States. There are around 520,000 elected representatives in the US, including school boards, parks commissions and so on, one for every 620 people. Britain, by contrast, has one elected official for every 2,600 people. On the surface, measured by the number of democratically elected local representatives and their devolved powers, there is greater ‘municipalism’ in the US than in Britain. Yet public provision, even in its present beleaguered state, is far greater in Britain than in the US.

The difference is the legacy left by the existence in the past of a ‘capitalist workers’ party’ in Britain, the Labour Party. Despite its pro-capitalist leaders – like Anthony Crosland – its pre-New Labour structures enabled the working class, at least partially, to politically represent its interests, acting as a check on the capitalists. This included the Labour Party’s presence in the ‘local state’. In the US, in contrast, there has never been a mass workers’ party, giving the capitalists a freer hand.

The 1990s political and organisational transformation of the ‘capitalist workers’ party’ into the completely capitalist-controlled New Labour, however, effectively removed working class political representation from local councils. British politics were becoming ‘Americanised’. This enabled the 2010 Conservative-Liberal Democrat coalition government not to "follow the example of Thatcher and Blair", as Crewe argues, but to begin to reverse ‘centralisation’, under the banner of ‘localism’. The 2011 Localism Act, for example, not even mentioned in Crewe’s essay, gave local authorities an assumed power of competence to do "anything apart from that which is specifically prohibited".

And why wouldn’t national capitalist politicians pass on the ‘burden of responsibility’ when local capitalist politicians are willing to wield the axe? Crewe himself notes that Labour council leaders "have often found themselves echoing the ideological language of their Tory [government] overlords, referring to ‘tough decisions’ and the necessity of ‘living within our means’." But how does he know they are only ‘echoing Tory ideology’, presumably reluctantly? Where’s the evidence that they have an alternative, socialist, ideology, which doesn’t accept the austerity agenda demanded by capitalism and seeks to use the local state to defend the interests of the working class?

As The Economist magazine commented, while "Thatcher clipped local authorities’ wings after far-left councils splurged public money" in the 1980s, "devolving budgets [now] to municipal leaders is astute" politics as it "spreads the blame" (8 November 2014). It approvingly quotes a Leeds Chamber of Commerce director arguing that municipal authorities "have ‘grown up’ since the chaotic clashes of the 1980s".

Osborne said much the same in a 2015 Guardian interview, arguing that "Thatcher took control nationally" in the 1980s because of "the nonsense that was happening with Militant in Liverpool" (27 April 2015). "But we have moved on from that", he continued, with more "level-headed leadership" in local councils. The ‘nonsense’ in Liverpool was the mass movement behind the Liverpool 47 Labour councillors, with Militant, the predecessor of the Socialist Party, at its core. Thatcher was forced to concede £60 million in extra resources to the city (£98 million in today’s values). It was the triumph of Blairism in transforming Labour into New Labour that is responsible for the critical condition, if not yet the death, of local government – and the failure to date of the Corbyn movement to reverse that transformation.

Recovery hopes fading…

Jeremy Corbyn was carried to victory as Labour leader in September 2015 at the head of an anti-establishment, anti-austerity wave which had the potential to become an organised mass movement. This breakthrough created an historic opportunity to overturn the policies and structures of New Labour and transform the Labour Party into a genuine anti-austerity, workers’ socialist party.

If such a battle had been launched it would have had profound reverberations for local government. As the Corbyn insurgency began to look unstoppable, the Guardian columnist and Blairite apologist Polly Toynbee fearfully asked "what will happen when Labour councils have to set budgets imposing 40% cuts? Will some local parties, encouraged by Corbyn, demand illegal budgets – as in Liverpool and Clay Cross? What would Corbyn say?" (4 August 2015) Councils, once again, could have become a force of resistance.

But 18 months on, and despite the boost of decisively seeing off last summer’s leadership coup, the opportunities have not been seized. Despite Jeremy Corbyn’s leadership there have now been two rounds of council budget-setting with Labour councils still implementing the Tories’ austerity agenda. Instead of a call for councils to refuse to sack workers or cut services, and an appeal to his supporters to deselect Labour councillors who went ahead with cuts, Jeremy Corbyn issued a circular letter with John McDonnell in December 2015 to council Labour groups which, whatever its intentions, effectively condoned their continuation of austerity policies.

This was compounded when, with no public opposition from Corbyn, a constitutional amendment was agreed at the 2016 Labour Party conference making it a disciplinary offence for a Labour councillor to "support any proposal to set an illegal budget" or to "vote against or abstain on a Labour group policy decision on this matter". Complying with Tory laws is not a principle of the labour movement, on the contrary. But the references to an ‘illegal budget’, by both Polly Toynbee and the constitutional amendment, are deliberately obfuscating the issue. So too, unfortunately, was the idea raised in the Corbyn and McDonnell letter that if councils "don’t set a budget, a council officer will do it for them".

Nobody is proposing not setting a budget or setting a deliberately ‘unbalanced budget’, which would immediately precipitate a legal challenge. But ‘balancing’ a no-cuts budget by the use of prudential borrowing powers and reserves is a different matter. This is the strategy pioneered by the Trade Unionist and Socialist Coalition (TUSC), in which the Socialist Party plays a leading role, which has won growing support particularly in the local government workers’ unions.

This would not avoid an eventual confrontation, with council chief finance officers likely to dispute such budgets and even issue Section 114 notices (see box on page 20 on the legal position). The alternative budgets that have been presented by TUSC-supporting councillors in Southampton, Hull, Leicester and Warrington, and the example they were based on – the budget moved in 2008 by the two Lewisham Socialist Party councillors, Ian Page and Chris Flood – were not recommended by council officers. But they were not ruled as ‘illegal’ either. The use of borrowing powers and reserves to meet projected deficits is a ‘matter of judgement’ for councillors to make, which could at least be legally defended while a mass campaign of opposition to the cuts is built.

… but not yet terminal

The outcome of a struggle cannot be determined in advance. The fundamental weakness of Tom Crewe’s premature obituary for local government is that he doesn’t even see it as a site of struggle. He mentions, for example, the poll tax as one of the ‘cause of death’ measures introduced by Thatcher against local government. But not its defeat at the hands of a mass movement of non-payment, and her consequent dethronement. This became the biggest civil disobedience movement in British history – with Militant, once again, at its core. Thatcher’s replacement, John Major, was forced to inject an extra £4.3 billion into local government to fund the abolition of the poll tax.

In today’s terms that is £7 billion, more than the £4.6 billion Crewe identifies as being cut from adult social services since 2010. If Corbyn was to call for councils to make no more cuts and mobilised his supporters in a mass campaign, is it really inconceivable that the current Tory government could be forced to retreat?

The poll tax enforcement laws, of course, were totally on Thatcher’s side. The then Scottish Secretary Malcolm Rifkind infamously dismissed the prospect of opposition with a quote from the poet Hilaire Belloc: "Whatever happens, we have got the Gatling gun, and they have not" (revelling in the government’s legal authority, not threatening to use guns!). Only a small minority of councillors supported poll tax non-payment and there were possibly fewer supporters of non-payment in parliament – they included the three Militant MPs, Dave Nellist, Terry Fields and Pat Wall, and Jeremy Corbyn – than there are parliamentary supporters of Corbyn today. But they were prepared to struggle and played their part, using their positions as elected public representatives, to build a movement of resistance.

Tom Crewe exaggerates greatly rumours of the death of local government. There is, it is true, no prospect of a new rise of British capitalism equivalent to its 19th century ascent, which gave room to the municipalism of that era. On the contrary, this is an era of capitalist stagnation, with anaemic boomlets at best, in which workers and growing sections of the middle class face an ever bleaker future. But local government is still a potential alternative power that could be utilised in a struggle for a socialist programme. It will only be revived, however, as the working class creates a mass vehicle for its political representation, whether that is through a reconstituted Labour Party or, if that avenue remains blocked off, a new formation.

Illicit prescriptions?

Jeremy Corbyn and John McDonnell’s December 2015 letter said that "councils must set a balanced budget under the Local Government Act 1992. If this does not happen… then the council’s Section 151 Officer is required to issue the council with a notice under Section 114 of the 1988 Local Government Act. Councillors are then required to take all the necessary actions in order to bring the budget back into balance. Failing to do so can lead to complaints against councillors under the Code of Conduct, judicial review of the council and, most significantly, government intervention by the Secretary of State".

This is an accurate summary of the legal position. But even just from a legal viewpoint it actually shows that the Tories do not have the draconian powers they are usually portrayed as having by right-wing Labour councillors seeking to excuse their refusal to fight.

Where for example is the power of surcharge, which the Blairites still raise and which actually was inflicted on the Liverpool and Lambeth councillors in the 1980s? As TUSC has consistently explained, it was abolished in the 2000 Local Government Act. Equally, there is no prospect of imprisonment, as the Poplar councillors were faced with in 1921. Instead, as the Corbyn and McDonnell letter admits, today’s rebels would have to confront... "complaints against councillors under the code of conduct"!


Even that sanction is no longer as potent as it was. Before 2011 breaches of the code of conduct were dealt with under the national Standards Board regime, and could lead to a councillor being disqualified from office for a maximum of five years. Suspension or disqualification were the ultimate sanctions faced by Ken Livingstone, then the independent mayor of London, when he was brought before the board in 2005 for comments about an Evening Standard journalist.

But the Standards Board was abolished by the Con-Dem coalition’s Localism Act. Now a complaint would have to be considered by the council itself "in any way the authority sees fit" – hardly a fearsome block to a Labour council committed to resisting the cuts. Would they disqualify themselves? The code of conduct mechanism is really for individual instances of misconduct, not collective defiance.

What about a judicial review? The Con-Dems also abolished the Audit Commission, the body that had previously appointed district auditors with the power to seek a judicial review of particular items in a council budget. Councils are now moving to a position similar to NHS trusts who appoint their own auditor. Significantly, despite two-thirds of English NHS trusts ending the last financial year in deficit, the accountancy companies seeking to retain their audit contracts – and not wishing to antagonise their clients – have issued no ‘public interest reports’ against them.


Nevertheless, and separate from any judicial or audit process, last autumn the Health Secretary, Jeremy Hunt, put three NHS trusts into ‘special measures’ for running persistent deficits. This was "to warn others", in the words of Polly Toynbee, that "their heads will be on Whitehall spikes" if they don’t make cuts (Guardian, 18 October 2016). For once, however, she didn’t urge compliance with government dictates. "There’s safety in numbers, he can’t sack them all". Exactly, and the same applies to councils!

For it is true, as the Corbyn and McDonnell letter says, that the government does have reserve powers, after an investigatory process, to appoint commissioners who can take over particular council functions which can be shown to have suffered a ‘governance failure’. These powers were used most recently in February 2015, after a report found Rotherham council to be ‘not fit to handle child sexual exploitation’.

Winning public support for commissioners to intervene in the Rotherham scandal was one thing. But deploying commissioners to take over Labour councils, backed by the Leader of the Opposition and mobilising popular support in a national campaign against the cuts, is another matter entirely.

This is what Jeremy Corbyn and John McDonnell should have been stressing from day one of Jeremy’s leadership victory not, however inadvertently, adding to the chorus that there is nothing councillors can do but go along with austerity.

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