Last week it was announced that in April, council tax is set to increase by 10 per cent in Bradford, by nine per cent in Newham and in Windsor and Maidenhead, and by 7.5 per cent in Birmingham, Somerset and Trafford – well above the five per cent increase that most of the rest of us can expect.
These councils are just the tip of the iceberg: dozens of councils around England are in a state of collapse or near-collapse. Council funding from central government was cut by 50 per cent over the last decade – and as a result councils receive about £16bn per year less than in 2010.
People will have noticed how local services – from libraries and leisure centres to Sure Start centres – have been closed down in recent years. Your bin collections have probably moved from weekly to fortnightly, there are fewer street sweepers, park wardens and less gritting of roads and pavements.
My hometown of Croydon is the poster child for council collapse. A 10 per cent council tax hike? Pah! We’ve had 15 per cent. Cuts to services? Been there, done that. A Section 114 notice? One? Hah! We’ve had three (and a fourth may be imminent)!
Croydon has been there, done that, bought the T-shirt, sold it off, and is still more broken and bankrupt than ever. The council is currently begging the Government for a £136m bailout.
While there has been incompetence and mismanagement – under both Labour and Conservative administrations – that is not the real story. Even the best and most competent managers can’t make ends meet if the demand for services outstrips the resources allocated.
In 2013, the deputy leader of Croydon Council warned: “There is a time coming, and it’s not far off, when the costs of dealing with an ageing and increasingly deprived population will mean that there is literally nothing left in many councils’ coffers for anything but social care.”
Council tax in Croydon rose by 15 per cent in 2023/24 – the same year in which the adult social care budget was hacked back by £12m. In the last year, the Tory mayor closed four libraries (one in the poorest ward in the borough), and is now proposing more cuts to youth services.
All funding to the local voluntary sector has been stopped – slashing specialist support on mental health, homelessness, and even support for the local Citizens Advice – and this has all been accompanied by a fire sale of public assets on the cheap, with Croydon’s iconic Fairfield Halls now at risk too.
After years of pain – leaving Croydon residents paying the highest council tax in London with only threadbare services to show for it – the council finances are still getting worse. A similar story is emerging in Birmingham where council tax is rising by 7.5 per cent this year after it went up by 10 per cent last year, and another round of cuts to services and sell-offs of public assets is planned. Pay more, get less.
A decade of austerity hacked away local government finances, but demands on council services are rising due to an ageing population (social care), an unregulated housing market (emergency accommodation), and from increasing poverty (social services).
Pleas for more funding fell on deaf ears. In 2022, the Conservative council leaders of Kent and Hampshire wrote to the then Conservative government to say: “We have experienced more than 12 years of national austerity and cuts to our core budgets. Inflation continues to grow, along with demand for services such as social care for vulnerable adults and children”. This year, Hampshire asked the Government for permission to hike council tax by 15 per cent.
The lack of government housing policy has seen house prices and rents rocket in the last decade, and homelessness more than double. That leaves councils picking up the pieces: trying to prevent families being forced onto the streets, and having to fund expensive and often substandard temporary accommodation – with less resources to do so.
To give the new Labour Government some credit, they are increasing overall council funding by 6.8 per cent this year. But that comes after years of real terms cuts and rising demand from an ageing population (impacting social care), an unregulated housing market (emergency accommodation), and from increasing poverty (social services).
No one could reasonably expect Labour to resolve a crisis 15 years in the making in just six months, and Labour’s target to build 1.5 million homes over five years may help – although the Government still won’t say how many of those homes will be council homes.
Yet again our government is short-changing the North
Read MoreWithout their own capacity, councils will continue to rely on often rogue private landlords and B&Bs. To make matters worse, Chancellor Rachel Reeves announced in her Budget that local housing allowance would be frozen – meaning more housing will become unaffordable to tenants, resulting in more people presenting to councils in need of emergency accommodation.
In some council areas, the costs of emergency accommodation to homeless families (which councils are legally obliged to provide) are heading towards 50 per cent of council expenditure, and the Public Accounts Committee recently warned that local authorities were trying “to save a sinking ship with little more than a leaky bucket”.
As Local Government Association chair Louise Gittins said, council finances remain “extremely challenging” and the Government’s extra money “still falls short of what is desperately needed”. The crisis in council finances is far from over. At best it may be getting worse at a slower rate – and that’s not much of a winning slogan for Labour.
Meanwhile, people across England face another above-inflation council tax rise in April, on top of rising water, energy, bus and rail costs. The cost of living crisis is far from over.
Andrew Fisher is a former executive director of policy for the Labour Party
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