Tory towns go bust

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One of the things that annoys me about brexit is how its allowed many important issues to sneak under the radar, without any serious debate, e.g. Fracking was quietly approved, without any real parliamentary debate last month, against independent advise to the contrary.

But one big story that has been swept under the carpet is how several towns with Tory run councils are basically going bust. Northamptonshire council for example is in dire straits. In the town of Corby (which incidentally voted overwhelmingly leave) public services are being cut back to the legal minimum. This means things like rural buses services have been cancelled (meaning anyone without a car in a rural location is now cut off from the rest of the country), public libraries are being shut, day care and medical centres are closing down, public parks are at risk from developers, street lights switched off, road repairs halted, bin collections are being curtailed and so on. Even Christmas related festivities are being cancelled (yes, the Tories are cancelling Christmas).

So how did it get to this stage? Well quite simply put ideology and the legacy of Cameron’s no-so-little helper “porky” Pickles. Many of these Tory councils went about privatising public services and outsourcing them to private firms (in many cases Tory party donors and allies, e.g. Richard Branson got £2 billion worth of the NHS). And rather that wait for the magic of the market to kick in, they also froze council taxes as an easy vote winner.

Of course, as has happened any time public services have been privatised, instead the costs actually went up considerably. And a freeze in council tax amounts to a cut in taxes over time thanks to inflation. And at the same time the Tory government has been cutting the amount of money it spends on local government, as part of its policy of austerity. And the rise in inflation brought on by the brexit effect has hardly helped. So councils found themselves squeezed from multiple directions.

Worse still, some councils have responded to this crisis by squeezing any source of income available to them, notably small businesses. Hence some smaller firms got hit with massive hikes in their rates or rent. While some were able to just cope with those (generally those in more affluent areas) others simply folded (and the drop in consumer spending thanks to brexit has probably not helped here either). Of course, this creates a law of diminishing returns and councils have hunted the golden geese to extinction, decimating town centres in the process.

On the one hand, as many of these councils are Tory run (and often in areas that voted overwhelmingly for brexit) you are tempted to say, tough titty. You voted for this, you got it, if you were dumb enough to vote Tory (they ain’t called the nasty party for nothing) that’s your own luck out. However, often the people who are feeling the worse of this aren’t the ones who voted for it. Pensioners have their benefits triple locked and ring fenced. Its usually the young or those on lower incomes who are going to feel the worst of it.

What happens next is unclear. The government could step in to bail councils out. However, the danger is that if they bail out one they have to bail out all of them. And that would unleash a tidal wave. The truth is that most of the local governments in England are up sh*t creek and just about managing and have been that way for quite some time.

If we were to transfer all of those debts run up by local councils onto the UK government’s books, suddenly HM treasury is massively in deficit, worse off than they were when the started this policy of austerity. And inevitably that would mean pressure would come to cut back in other areas. Does the UK really need aircraft carriers, nuclear submarines, HS2 (or a no deal brexit), when councils literally can’t afford to keep the street lights on? Because ultimately councils are in trouble because they are having to pick up the pieces that result from Tory policy of austerity (e.g. a single parent gets evicted because her benefits got cut, what happens? The council have to pay for emergency accommodation) yet they have limited means to raise money to cover those costs.

A more vital question is how to fix the problem and I would argue that goes back to how councils are funded. The UK’s council tax system basically makes no sense, its the tax equivalent of a drive by shooting. And worse given how much property prices have changed since the rates were last updated its not really related to income anymore. I’ve long argued that a local income tax would be a better idea.

Yes this would likely mean those on middle incomes (like me) might see our taxes go up a little bit, while those on higher incomes would seem them go up a lot. But I’d rather pay a bit more to get good public services than not get any at all. And, given the ease with which council tax can be avoided (just put any literature from the council in the bin!), its more of a tax on honesty. I suspect a local income tax would catch out those who don’t pay council tax and it might turn out to be not as expensive as thought.

Also it is deeply hypocritical for Westminster politicians to be promoting a brexit, to allow the UK to “take control” and not send money to Brussels. Then jealously guard its own powers and insist they alone should decide how money is allocated, even to the councils who are having to pay for the consequences of decisions made in Westminster. In essence brexit is little more than a power grab and a bank raid by the government.

If a post-brexit UK is to have any future it will only survive if there is a commensurate devolution of power from Westminster to both local authorities and local assemblies (e.g. the Scottish government). Otherwise the legacy of the current Tory government will just be the disorderly destruction of most of the UK’s public sector and local government.

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4 thoughts on “Tory towns go bust

  1. Pingback: The Founding Fallacies of Privatisation – University bankruptcies loom | daryanblog

  2. Pingback: Predatory finances – the shape of things to come | daryanblog

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