New Statesman Spolight’s latest policy report on economic growth and the regions, on news-stands this week, may be the last devolution-focused supplement we publish before a general election. If the polls are to be believed, Labour is on course to win a majority. But today, we’re heading into local and mayoral elections. This means some of the 280 English councillors who have responded to our nationwide poll will lose their seats, while some will be welcoming new colleagues to the benches of their town hall debating chambers.
But as we approach what are likely to be the twilight months of a 14-year Conservative reign, councillors are well placed to deliver their final verdict on the records of five prime ministers and 13 local government ministers, revealing how they have supported, or failed to support, perhaps the most frequently neglected arm of the state.
After more than a decade of squeezed council budgets (and austerity having eaten into a greater share of the Department for Levelling Up, Housing and Communities’ spending power than any other government department), the great majority of local authority revenues are being consumed by outgoings on adult social care, children’s services and temporary housing costs. Just 3 per cent of respondents to our poll said their local authority area was adequately funded. And this wasn’t just profligate Labour members: 82 per cent of Conservative councillors agreed.
Local governments aren’t simply meant to act as social care providers, even if this accounts for up to two thirds of many councils’ shrinking budgets. Nor is local government simply about “collecting the bins”. Councils run schools, nurseries, libraries, leisure centres, parks, social housing departments, local transport authorities, planning departments, museums, galleries and community centres. They organise road maintenance, cultural events and yes, of course, waste collection.
In terms of most people’s day-to-day lives, the average voter is far more likely to use or rely on services provided by a local authority than one provided directly by Westminster. Councils make up a large proportion of UK state capacity. They maintain a hefty chunk of our broader public realm. And today they are in a decrepit state.
Extreme inflationary pressures have combined with increased service-user demand, creating what one council officer described late last year as a “death spiral”. Many are “on the verge of collapse”, they warned. Indeed, six local authorities (including Birmingham City Council) have already issued so-called section 114 notices since 2021, declaring that they cannot balance their books while maintaining statutory services. Britain’s second city is bankrupt and cutting services to the bone. By contrast, between 2001 and 2019, only one local authority (Northamptonshire) issued a section 114 notice.
More than a fifth (21 per cent) of councillors who responded to our poll said it was likely or very likely that their local authority would declare bankruptcy in the coming five years. That is 3 percentage points down on the number who gave the same response in our last poll in October 2023. But having around a fifth of local authorities on the edge of financial collapse correlates broadly with similar data from the Local Government Association, collated from a survey of senior council leaders last year.
Should the fears of this cohort prove accurate, that would amount to around 70 total council bankruptcies across England’s 317 authorities, including those that have already been declared. If Birmingham’s programme of cuts is an indicator, that would mean 70 towns, cities, boroughs and counties with dimmed street lights, potholed roads, abolished arts and culture grants, reduced rubbish collections, closed libraries, mass redundancies, skeleton social care services, and much else besides.
More than two thirds (67 per cent) of our respondents report that they’ve already made cuts to parks and green spaces in their budgets, while 72 per cent have cut culture and leisure. It is perhaps unsurprising that these “non-essential” services are the biggest victims of fiscal tightening. But according to our polling, over a third (38 per cent) of councillors have made cuts to schools, and a similar number to the core, statutory services of adult social care (36 per cent), special educational needs provision (38 per cent) and children’s services (39 per cent).
In this context, it is hardly surprising that just 4 per cent of councillors said local government was in a better state now than it was in 2010. Conservative responses were congruent with the general sense of malaise: 82 per cent said the sector was either in the same state or worse after 14 years with their own party in government in Westminster (39 per cent and 43 per cent, respectively). When asked if their local authorities received adequate funding from central government, the councillors’ response was near-unanimous: 97 per cent, including 82 per cent of Conservatives, said no.
The mood among the Tory grassroots is dismal. Only 6 per cent think their party will form a majority government. Their verdict on Rishi Sunak and their own government’s record is dire. Just a third say their party’s policies have had a positive impact on their local areas.
“Councillors are at the coalface of deciding which services authorities might be required to scrap,” said Jack Shaw, a local government expert working at the Bennett Institute for Public Policy in the University of Cambridge. “Their casework has increased and they are face to face, on the doorstep… speaking with the communities they serve about their experiences of poorly funded services.
“It is unsurprising that there is a deeply held scepticism among councillors about the state of local government.”
It is 14 years since the election of David Cameron. The seemingly permanent application of Osbornomics since then has been characterised by a deliberate withering of government’s capabilities: at the local level, councils no longer have the personnel, institutional memory or expertise to deliver anything beyond the bare minimum.
Increasingly, any large project management is outsourced to consultancy firms that charge astronomical prices. Lack of capacity creates bottlenecks across the public sector: fewer places for social care is straining the NHS; short-staffed planning offices lead to reams of unread applications from developers; decimated environmental departments mean key bits of government legislation such as the Renters Reform Bill are unlikely to ever be adequately implemented by authorities without the experienced officers to enforce it.
If the country is going for growth, then it needs functioning public services and a government with the capacity to implement its own legislation in order to deliver projects. And yet we have created a funding model based on more than a decade-long pile-up of false economies. The result is that nothing works and everything is impossible.
At the same time, the Conservatives have unleashed a wave of English devolution, opening up a contradictory localist strategy caught between an immiseration of local government and empowerment of new regional executive mayors (albeit with limited funding themselves). First under the Northern Powerhouse, then the myriad schemes contained within the nebulous “levelling up” agenda, new combined authorities have been established across the country, with ten metro mayors (including three inaugural posts in the North East, East Midlands and North Yorkshire) being elected today (2 May).
These efforts are congruent with the vogue for economic “agglomeration” and clusters of skills, labour markets and single regional “functional economic areas”. The mayors act as ambassadors for their areas, trying to attract foreign and private investment, engaging in so-called place-making branding exercises on international junkets, and making endless applications for extra cash from Whitehall-controlled funding pots.
It remains to be seen whether this model for the mayoral role would continue under a Labour government – but certainly the mayors themselves, and their offices, seem here to stay. Labour has been reticent about committing to an improved local government funding package. The shadow levelling-up and housing secretary, Angela Rayner, has continued to focus more on her older policy area of workers’ rights and the party’s “New Deal for Working People” than on devolution. She has, however, promised to go “further and faster” than the Conservatives on decentralising powers, and has committed to longer-term funding settlements to improve local authorities’ ability to plan for the future.
But the shadow chancellor Rachel Reeves asserting that she would not bail out bankrupt councils has only exacerbated fears that a Labour government would fail to produce a sector-wide rescue package for authorities in crisis. One poll respondent wrote that life as a councillor felt “futile”, and that “Labour lacks the courage to do anything”.
“Without an adequately funded local government,” Shaw said, “ministers will not be able to achieve their national priorities.” The biggest task for whoever wins the election will be a reconstruction of some semblance of state capacity – and local government needs to be at the heart of that. Yet, if we take Labour at its word, the era of a two-pronged, incongruous model of austerity devolution could be set to continue.
This polling analysis will be published in full in a special issue of Spotlight on economic growth, available on news-stands with the 3 May issue of the New Statesman.
Charts designed by Harry Clarke-Ezzidio and Megan Kenyon.
[See also: Revealed: the £80bn hole in council finances]
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