Countering Council Cuts: Local Alternatives to Austerity
Photo courtesy of Guardian Edinburgh via flickr
While we’ve rightly been focussed so far national campaigns, defending welfare and education, we mustn’t overlook the fact that many of the cuts we are likely to face over the next few years will not be imposed directly from Westminster but by our own local councils.
Opposition to cuts at council level will be hard to coordinate nationally as those cuts will obviously be different in different places. There will, however, likely be common themes to which we can form common responses. Councils will undoubtedly claim they have no choice, they have to set balanced budgets, so if their funding is cut they have no choice but to pass that on.
To an extent that’s true but it isn’t the whole truth, either. They do have options, council tax, whilst regressive and in need of replacement, could be raised. Through a process called Tax Increment Financing (TIF) councils can borrow money to finance investment in infrastructure and capital projects. If projects are expected to stimulate the local economy, and hence increase the future tax take, that money can be borrowed against now, with the future income paying off the loan. Or councils could form their own energy service companies to raise revenue, increase renewables and reduce energy bills. New revenue streams and ways to leverage new money can be found if councillors are willing to think creatively.
Councils need to persuaded, too, of the necessity of longer term costs and benefits over the, apparent, short term requirements. They need to consider the wider impact of their spending decisions. Cuts in one place may lead to higher spending elsewhere, and not just in the future but right now. If youth centres are cut, for example, crime might increase, leading to higher overall costs. Costs not borne by the council perhaps, but still borne by tax payers.
Where cuts do have to be made, front-line services must be protected and spending on things like corporate branding could be cut. Edinburgh council, for example, spends hundreds of thousands of pounds every year on it’s ‘inspiring capital’ branding, to little obvious effect.
And if acceptable savings can’t be found, and tax increases or other revenue sources cannot cover the shortfall, real cost budgets could be produced, where the council refuses to implement cuts or set a balanced budget and instead sets one according to the needs of their area. Councillors who genuinely oppose cuts should not be forced to implement them and accept the responsibility and blame.
It’s often responded that if councils don’t set balanced budgets, central government will step in and the cuts will be far worse, but if councils do refuse to help implement cuts and force that take over that sends a very powerful message. If that stance can be coordinated with workers in the affected councils taking strike action or with occupations or good work strikes, it could be very difficult for the coalition to implement their policies. I accept that would require a great deal of cooperation and to happen on a large enough scale, but we need to think creatively and optimistically about our ability to resist. Simply trying to make awful cuts merely very bad risks reducing our power to oppose the broader issues and leaves us reliant on someone else forming that extra-parliamentary movement that must be essential if we want to have any real success.
As I say if we can make significant saving through efficiency then we should do that. I don’t know about England and Wales and Northern Ireland but I do know that here in Scotland councils have already been forced to find efficiency savings every year over the last few years and I don’t know how much more can realistically be found. I’m happy to cut pay a the top too, but how much does that really raise? If there’s not going to be a major difference between cuts we (as Greens and the broader left) impose and those central government would, then what’s the risk?
Of course, just as Westminster has passed much of it’s cutting onto councils, councils themselves may try to pass the buck for cuts further to local people. In Edinburgh we had a consultation from the council last year asking us to choose which cuts to make. And it was which cuts to make, there were very limited options, with very clearly leading questions, false dichotomies. Tax rises and outright opposition were not encouraged.
We need to ensure that there is real debate at a local level, that ordinary citizens are given a meaningful say in what happens to their communities. We need to take the opportunity to try out new forms of organisation. Methods like participatory budgeting, recently trialled where I live, in Leith, give people a direct say in how their money is spent. The first project was hugely successful, with a great turnout, lots of applications for funding and most people generally happy with the results. The trial only covered a small amount of money, and for community projects not core services but it shows genuine engagement and direct democracy is possible in our society.
We need to make these sort of schemes much more widespread. People will be looking for alternatives to austerity and cuts and the untrustworthy politicians enforcing them. We need to take the chance to show there are other ways to organise our economy and our society. Not just politics but economics can be democratised. As Adam pointed out at the start of the year, democratic reform needs to go far beyond electoral reform. Participatory economics won’t magically give councils more money to spend, but it would allow local people a real say over how what money there is spent. And if people have real control over how their money is spent and can see where it goes and how much it costs to provide the services they use that could be truly transformative.
“New revenue streams and ways to leverage new money can be found if councillors are willing to think creatively.”
Up to a point.
TIF isn’t available this year because it is being implemented in 2013/14. Energy service companies don’t generate much revenue and take time to set up, and councils lose funding equal to 2.5% of council tax if they put it up.
These are all worthy ideas, but basically irrelevant to the task of saving £50 million or so in the next financial year which many councils face.
Similarly, I agree about the point that cutting frontline services can impose greater long term costs, but there are laws about which services are mandatory and which are discretionary.
Participatory budgets could work well, but come with considerable risks – are people going to prioritise e.g. spending on road repairs or services for unpopular minorities? It also needs extra investment in ensuring that the “already empowered” don’t dominate.
Not setting a budget may “send a very powerful message”, but it will also mean deeper cuts to people who rely on council services.
In other words, there is a lot of good stuff here to consider for the long term, but none of this helps councillors who have to make a budget add up in the next few weeks.
Great article Alisdair, really useful ideas and analysis. I think this is a really important issue and one that there needs to be more discussion on, especially in the green party as we need to be putting forward a local alternative. I hope this is the start of much needed debate.
It’s vital to highlight the issue that councils will be making the cuts themselves and that there are alternatives, such as doing their job and actually representing the people they were elected to represent.
Anyway heres a wee report from the protest in glasgow today that fairly relevant to this.
Good stuff, thank you.