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Where have all the rebel councils gone?

Nottingham is the latest authority to issue a bankruptcy notice, signalling a broad crisis for local government. Why aren't councils resisting?

By Jack Shaw

One of the most remarkable dimensions of local government since 2010 is the absence of any concerted opposition from the sector in the face of the government’s austerity programme. Though partially offset by Covid-19 grants, the Institute for Government estimates that the government withdrew as much as 40 per cent of authorities’ grant funding over the last decade. This has pushed many councils to the edge of fiscal crisis, while for others it has compounded prior issues in governance and tipped them over the edge. Birmingham City Council, the largest local authority in the country, issued a section 114 bankruptcy notice in August, while Nottingham City Council followed suit last week. A New Statesman Spotlight poll of councillors published recently found that almost a quarter (24 per cent) of councillors thought it likely or very likely their authorities would run out of cash and be unable to balance their books.

And yet councils, by and large, have done little to respond to the government-imposed squeeze, beyond frequent bouts of complaints about the cuts they’re being forced to make.

By contrast, there is a long tradition of resistance that pre-dates 2010 – principally among Labour authorities. In the 1980s several Labour councils exercised significant autonomy, even at personal cost. When Margaret Thatcher’s government reduced investment in authorities and introduced the Rates Act of 1984 to prevent them from increasing the rates paid by businesses to compensate for their loss of income, Liverpool, Lambeth, Islington and Sheffield responded by refusing to set balanced budgets, which were required by law. It marked the first time since the Poor Law of 1601 that authorities hadn’t been allowed to set their own budgets. Islington, led by the future MP Margaret Hodge, campaigned on a slogan used by Poplar Council over half a century earlier: “Better to break the law than break the poor.”

[Read more: Exclusive polling – Tory councillors deliver a dire verdict on Rishi Sunak’s government]

Despite the newly emboldened Audit Commission – which had acquired powers to take legal action against councillors that it held responsible for “wilful misconduct” – Lambeth continued to defer the decision to set a budget. Thirty councillors were subsequently disqualified from holding public office and fined over £125,000 between them. Liverpool went on to set an illegal budget in 1985 too – the only authority to do so – but was forced to retreat later in the year when forty-seven councillors were also disqualified and fined.

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Similar resistance took place when Edward Heath was prime minister. In the town of Clay Cross, Derbyshire, when councillors refused to increase rents a housing commissioner was appointed to run their affairs. A dozen councillors were subsequently disqualified from office and charged £63,000 for the loss of rental income. It wasn’t until New Labour amended the Local Government Act in 2000 that elected councillors were no longer personally liable to refund lost income.

It was not only Labour authorities resisting Conservative-run government either. In the 2000s, South Cambridgeshire applied for a judicial review following the decision by New Labour to cap the rate of council tax. And in 2009 the politically neutral Local Government Association supported local authorities taking legal action against the government when it withdrew the decent homes fund at short notice.

New Labour also drew the ire of many authorities – including its own – when it did not abolish the right to remove councillors from office, which the Conservative-Liberal Democrat coalition later used when the mayor of Tower Hamlets, Lutfur Rahman, was found guilty of fraud and misconduct in office.

Though authorities have been loath to exercise resistance, it has not disappeared altogether. Resistance has evolved over time, taking new forms. In Domination and the Arts of Resistance, the anthropologist James Scott describes how the powerless exercise resistance through symbolism: false obsequiousness, veiled ignorance, the use of euphemism.

Through that lens, rejecting the government’s invitation to apply for competitive funding streams – as Surrey Heath admitted recently – is one way of signalling opposition to that kind of costly, resource-intensive, centrally managed allocative exercise. South Cambridgeshire’s decision to ignore non-statutory guidance from the government about its four-day working week arrangements may also be read in a similar vein.

And there remains at least one parallel: local authorities are no less litigious now than in previous decades. Barnsley recently threatened to take legal action against the government when, despite its high levels of deprivation, it was not a beneficiary of investment from the Levelling Up Fund. Scores of authorities have threatened or taken legal action against Home Office plans to re-house asylum seekers. The organisation Lawyers in Local Government has taken legal action against the government’s decision not to allow authorities to meet remotely.

The events of the 1980s might also in part explain the decline of resistance. The power imbalance between the government and authorities has only increased in recent decades, while the capacity of authorities to mobilise has been limited. Constraints are also psychological in nature. The lessons of the Thatcher era remain in the public imagination. Authorities have come to see resistance as futile and the prospect of securing concessions slim. Central government is unconstrained by the checks and balances a written constitution imposes, and has a track record for abolishing or re-organising authorities – as Thatcher did with the Greater London Council in 1986.

Resistance by Labour authorities has also been viewed as politically counterproductive. Professor Patrick Diamond of Queen Mary University of London suggests that the weaponisation of resistance by the Conservatives led to the stigmatisation of Labour authorities as the “loony left” – with electoral consequences. This image of Labour “irresponsibility” played a role in keeping Labour out of power until 1997.

Collectively, this confluence of forces has deterred the forms of resistance seen in the 1980s. It may explain why, despite the tradition of resistance being most prominent among Labour’s left, Jeremy Corbyn chose to write to Labour authorities in 2015 to discourage them from setting illegal budgets.

[See also: Half of councillors says social housing has not been upgraded since 2010]

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