Local Government in funding crisis

16 Sep 2023

Local councils are in crisis. Labour run Birmingham declares itself bankrupt with unmeetable salary payments due of £1 billion. Conservative run Woking Council ran up debts of over £2 billion, before it went into 'special measures' and voters kicked out the Conservatives and elected Liberal Democrats to clean up the mess. Conservative run Thurrock ploughed £650 million into dubious investments before also being forced into 'special measures'.

Here in Mid Devon the new Liberal Democrat administration has had to act swiftly to stem losses from the ill advised property developer, 3 Rivers Development, owned by the Council and set up by a Conservative lead administration. Losses are likely to be in the low £ millions rather than the £ billions, but still painful for residents.

And more councils will 'go bust' if the media reports are correct. Locally, speculation swirls around Conservative controlled Devon County Council and how long it can limp on without a Government bailout.

Of course there is a mixture of hubris and incompetence behind some of these stories. The Conservative Government would of course like to pretend this is nothing to do with them and all to do with local administration. This is just not the case.

Conservative austerity has cut council budgets by something like 60%. At the same time the Government has heaped on councils responsibilites that were never their's. It is no surprise that under these huge cost pressures local councils looked for ways to supplement council tax. Some fell for the charms of what now look like 'get rich quick' schemes, others thought they could set up subsidiary companies that could 'turn a profit'. That thinking was alas fatally flawed.

At the heart of this now massive (and costly) problem was a dereliction of duty by the Conservative Government, or, perhaps worse, a desire by them to see Councils stripped back to providing the bare minimum of services. As this crisis unfolds expect to see (further) cuts to council services such as libraries (Devon County already planning to scrap mobile libraries) and leisure services; potholes and roads will not get fixed; schools (where council controlled) going unrepaired; and pressures to move from weekly waste collection to fortnightly then three-weekly, then four-weekly, etc.!

Conservative ideology goes beyond just stripping back finances. It extends to stripping back control. Planning has largely been 'reformed' in a way that removes powers from local councils to intervene to ensure housing development meets the needs of local people. The power sits firmly now with property developers, who always seem to prioritise profit over local need. 

Liberal Democrats have always taken the view that the decisions on services and the expenditure on them, and on planning, should be taken as close to the users of those services, and residents, as possible. We believe that local government and democracy is a good thing. That is why many people turn to the Liberal Democrats to run their councils. The Conservative Government, however, prefer centralised control and have systematically starved local councils of the funding, and powers, they need to deliver those services that make life for local residents 'good' rather than merely 'bearable'.

Local government is in crisis. A crisis caused by the Conservative Government. It is yet another symbol of a 'Broken Britain'. Only a change of government can start to fix the problem local councils face. Councils on their own cannot resolve these problems.

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