How Labour councils can beat the Tories' cuts

Submitted by Matthew on 10 February, 2016 - 12:48 Author: Sacha Ismail

What are you advocating?

Firstly, that Labour councils and the Labour Party more generally campaign explicitly and actively for the restoration of the funding which local authorities have lost since 2010 and are going to lose in the years ahead. At the moment, the demand is not even being made.

Secondly, that instead of insisting that their decisions about spending and cuts are not up for discussion, councils and councillors encourage a process of discussion in the party and the labour movement more generally, helping to create a Great Labour Movement Debate about the way forward. Minimally and in the first instance, there should be open meetings of Labour members and affiliated trade unionists in each council area to discuss what is happening and how to respond.

Thirdly, that councils should seek to build and lead a local campaign to confront the government and win restored funding – involving the community and workers in mass demonstrations, strikes, and direct action.

Fourthly, that in order to be taken seriously in leading such a campaign, in order to boost it, and in order to ramp up confrontation with the Tories, councils should find way to avoid making cuts now – including scrapping wasteful spending like use of agency workers and consultants, cutting top salaries and perks, borrowing money, running down reserves, selling off non-service-providing properties, juggling between accounts and financial years, and so on. Councils are large organisations with complex finances which give them quite a bit of leeway – to buy time, and use that time to build a fightback.

Fifthly, that councils set budgets based on social need, not cuts.

You mean a deficit budget?

Not exactly. Councils can borrow money, but unlike central government, they cannot operate in a sustained way on the basis of a deficit, borrowing more or less at will or printing money. Cuts cannot be stopped just by super-clever budget-making. But, yes, I do mean a budget which preserves services and jobs, and fills the revenue gap by planning to get money back from the government.

Couldn’t council officials simply veto a budget like that?

No. Councillors can override top officials’ objections, after a period of delay. Recent legal changes make a defiant stance easier rather than more difficult. A council tax set by a council making a needs-based budget will be valid even if the budget is contested, whereas in the 1980s councils could not validly set or collect rates (the local property tax which councils then levied) until they set a legal budget.

The reason councils are not, at the moment, seriously, considering how to resist is not because nothing more is possible. It is because almost all Labour council leaders are stuck in a deeply conservative groove, and most councillors are not confident to or can't imagine challenging them. That is shown by the fact that many councils are pushing through, for instance, deeply unpopular cuts to library services, while they maintain high pay for top officers, wasteful spending on consultants, etc.

However you look at it, the sort of budget you want would break the rules. The Tories would just send in commissioners to take over!

They could. The Secretary of State has wide powers: if he doesn’t like what a council is doing, basically, he can act. He can do that even without an illegal budget, without any claim of illegality. But think. If the Tories send in unelected officials to impose decisions against an elected Labour council with strong local support and a defiant community, they will not be in a strong position to impose extra cuts. In Tower Hamlets, where the Tories sent in commissioners for different reasons, they did not impose cuts. Labour did, once it returned to office in the new mayoral election!

In fact, the most desirable situation for the Tories is the current one: having Labour councils act as their agents in imposing cuts on the local community. If we’re really fighting the cuts, then a move by the Tories to send in commissioners is not a disaster. To see it as a disaster is really to say, let’s not do anything that will upset the Tories. For that reason, probably the Tories would be slow about sending in commissioners. They would first try to play chicken, daring the council to continue with its budget until the council ran out of revenues and panicked, as Liverpool council did in late 1985. Then they would make their legal moves against the council, or councillors, after that. Budget-juggling could give the labour movement time to build a campaign.

For example the Tory/right wing independent council in Stoke, for its own reasons, is using ÂŁ15.5 million of reserves to ward off further cuts in 2016-17 - though of course they are not going to lead an anti-cuts campaign. Bromley Unite members, in their fight against cuts by their Tory council, have highlighted that it holds ÂŁ300 million in reserves. That is unusually high. But the 58 Labour-led English councils outside London hold ÂŁ4.5 billion in general reserves and ÂŁ1.3 billion in housing revenue and capital reserves. There is nothing to stop them pooling their reserves. And councils have extensive, though limited, borrowing powers.

That gives enough leeway to build a campaign, though not to avoid cuts for any long time. (If councils had begun to fight in 2010, they would have had more room for manoeuvre. On the other hand, the need to fight is greater now.) In fact, after a while, the council should actively seek to provoke the government to put itself on the front line by intervening: for instance, by transferring capital funds to expenditure without permission - normally you have to apply to do so - or withholding payments of VAT and PAYE.

So, one way or another, you’d end up with the government intervening. And then you’d be sure to lose!

Coordinated national campaigning is good, but that doesn't mean there is nothing that individual councils can do.

The only two Labour councils which have confronted Tory governments in the past, and stood firm to the last, Poplar in the 1920s and Clay Cross in the 1970s, both won victories, even though in their time they were isolated and other Labour councils were complying with government policy. The Labour councils which talked about confronting the Tories in the 1980s, like Lambeth and Liverpool, failed because they backed down, not because of legal action by the Tories. That legal action came after the councillors had retreated. So even one council defying the Tories could win. If a few big ones did, let alone a large range of Labour councils across the country, they would almost surely win. Many would be good. But one has to take the lead. And, if it comes to it, it can probably win on its own.

That is all very well, but the Poplar councillors were jailed. The Clay Cross councillors were disqualified and bankrupted. Lambeth and Liverpool councillors, in the 1980s, were heavily fined.

There are some risks to councillors, just as there are risks to workers every time we strike. The risks to councillors are much smaller than they used to be. Councillors can still be disqualified, but it is much harder; and they can no longer be jailed or heavily fined and bankrupted, as they could be in the past. Councillors should show some leadership! People’s lives are being ruined by the cuts. If you don’t want a fightback, then you don’t have to be a councillor.

Would people respond?

Many towns and areas have seen big mobilisations, for instance to save a local hospital — in Lewisham, more than twenty thousand on a local demonstration, and sustained mass campaigning, which saved the hospital. If councillors tried to take on the Tories, there would be a response. As there was to Jeremy Corbyn’s Labour leadership campaign, which at the start many people thought to be a hopeless token effort.

Is it worth the risks?

No struggle is guaranteed to win, or risk-free, but what’s the alternative? To let our public services be trashed – and very likely have councils break the law not by defying cuts, but by failing to provide statutory services! That is what it is coming to now. Workers and communities will fight the cuts anyway – on a bigger or smaller scale. The question is whether Labour at least tries to be part of that, or whether it opposes and, inevitably, denounces anti-cuts struggles.

Jeremy Corbyn’s Labour leadership disagrees with you, doesn’t it?

Yes, and we disagree with them. There should be open debate. The few Labour councillors who have made a stand against the cuts should not be victimised. Right now Haringey councillor Gideon Bull has been suspended by his Labour group for speaking out against cuts to services for vulnerable adults. The more our movement discusses its strategy and tactics in taking on the Tories, the stronger it will be. We can continue this debate while we fight to elect the largest possible number of Labour councillors across the country.

Comments

Submitted by AWL on Wed, 10/02/2016 - 15:16

Unite national housing workers' committee votes for no cuts budgets and defying the government
www.housingworkers.org.uk/readnews.html?con_id=280

For the motion they passed, see
www.housingworkers.org.uk/imgs/1452432700.pdf

Submitted by AWL on Wed, 10/02/2016 - 15:43

The letter setting out the policy we disagree with above can be read here.

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