Braving the storm: Liverpool town hall. Photo: Getty
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Cutting council funds: the government's ill-conceived rebalancing act

The government's local authority cuts will inhibit growth in the regions, rather than building a "northern powerhouse".

Imagine if the Ministry of Defence was forced to scrap one of its three major services. Would ministers choose to do without the RAF, the navy or the army? This is the type of impossible choice councils have faced as they have lost, on average, a third of their budgets since 2010.

Austerity has bitten hard and although local authorities have stepped up to the mark – innovating wherever possible to avoid losing valued services – the impact has been obvious enough. The pain has been felt by all non-ring-fenced areas of spending: libraries, home helps, roads, parks, playgrounds, waste collections and major events.

In Liverpool, we have lost 58 per cent of our budget. By 2017, we will have reduced our spending by £330m. These are not merely numbers on a spreadsheet. These cuts translate into fewer jobs (2,200 and counting), less investment and reduced spending power in our local economy. Yesterday’s local government financial settlement leaves Liverpool facing  a further 5.9 per cent cut to our budget – three times the national average of 1.8 per cent.

But the cuts we have undergone – and are set to endure for the foreseeable future – undermine what is claimed to be another key ministerial priority: rebalancing our local and regional economies away from an over-reliance on public money through developing a vibrant private sector.

We’re playing our part. We have had success over the past year in attracting large private sector employers like H2 EnergyAmey, BT, TNT Postand Seadrill to relocate here, creating 1,500 jobs. Meanwhile, the recent International Festival for Business in Liverpool has led to deals that will create around 10,000 jobs in the city-region over the next three years.

So, it could be argued, if we have had this success why do we need more funding from the government? It is not only because it is increasingly a struggle to provide vital statutory services like social care, but money lost through cuts to our Whitehall grants (which accounts for four-fifths of councils’ finance) stymies local growth and investment too. This makes it harder for cities like Liverpool to diversify our economic base, provide more and better job opportunities and build-in greater resilience to protect our economy in the bad times.

George Osborne says he wants a “Northern powerhouse” acting as a counterweight to London and the southeast. Nick Clegg says he wants rebalancing too, claiming, earlier this month, that capital investment for the government’s “roads revolution” will do just that. But the same logic about the importance of public investment in driving growth, escapes them when it comes to local authority spending.

Rebalancing our economy is something we all agree on. But if ministers are really serious about driving growth in the regions, then they need to understand that taking money out of our local economies through endless cuts to council budgets slows this process and, perversely, makes us even more reliant on public spending.

Joe Anderson is Mayor of Liverpool

Photo: Getty Images
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The buck doesn't stop with Grant Shapps - and probably shouldn't stop with Lord Feldman, either

The question of "who knew what, and when?" shouldn't stop with the Conservative peer.

If Grant Shapps’ enforced resignation as a minister was intended to draw a line under the Mark Clarke affair, it has had the reverse effect. Attention is now shifting to Lord Feldman, who was joint chair during Shapps’  tenure at the top of CCHQ.  It is not just the allegations of sexual harrassment, bullying, and extortion against Mark Clarke, but the question of who knew what, and when.

Although Shapps’ resignation letter says that “the buck” stops with him, his allies are privately furious at his de facto sacking, and they are pointing the finger at Feldman. They point out that not only was Feldman the senior partner on paper, but when the rewards for the unexpected election victory were handed out, it was Feldman who was held up as the key man, while Shapps was given what they see as a relatively lowly position in the Department for International Development.  Yet Feldman is still in post while Shapps was effectively forced out by David Cameron. Once again, says one, “the PM’s mates are protected, the rest of us shafted”.

As Simon Walters reports in this morning’s Mail on Sunday, the focus is turning onto Feldman, while Paul Goodman, the editor of the influential grassroots website ConservativeHome has piled further pressure on the peer by calling for him to go.

But even Feldman’s resignation is unlikely to be the end of the matter. Although the scope of the allegations against Clarke were unknown to many, questions about his behaviour were widespread, and fears about the conduct of elections in the party’s youth wing are also longstanding. Shortly after the 2010 election, Conservative student activists told me they’d cheered when Sadiq Khan defeated Clarke in Tooting, while a group of Conservative staffers were said to be part of the “Six per cent club” – they wanted a swing big enough for a Tory majority, but too small for Clarke to win his seat. The viciousness of Conservative Future’s internal elections is sufficiently well-known, meanwhile, to be a repeated refrain among defenders of the notoriously opaque democratic process in Labour Students, with supporters of a one member one vote system asked if they would risk elections as vicious as those in their Tory equivalent.

Just as it seems unlikely that Feldman remained ignorant of allegations against Clarke if Shapps knew, it feels untenable to argue that Clarke’s defeat could be cheered by both student Conservatives and Tory staffers and the unpleasantness of the party’s internal election sufficiently well-known by its opponents, without coming across the desk of Conservative politicians above even the chair of CCHQ’s paygrade.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.