Yesterday we clearly saw what ‘localism’ means for the coalition government: localising the bill for the financial and economic crisis caused not by government – central or local – but by the banks.
The cuts to local government budgets are front-loaded – we have known they would be since the Comprehensive Spending Review. Some have been saying that this ‘at least gets the pain over quickly’. Even a moment’s thought shows how daft that notion is – all front-loading means is that the pain starts earlier, and then carries on.
There seems to be a sort of collective denial taking place – an assumption that once these cuts are over things will get back to ‘normal’. They won’t. Even if economic growth returns to Noughties levels there is absolutely no guarantee that local government funding will ever return to past levels.
These cuts are, as far as we can tell, intended to be permanent. Certainly the cheers of some right-wing Tory backbenchers and media pundits indicate that is what they expect to see, and it is hard to think of how they are mistaken.
It is also pretty clear that the distribution of cuts is very uneven. Whether or not this is deliberate hardly matters – the effect is clearly that poorer areas are mostly suffering more – up to 17% cuts in the first year for some councils. The irony is that this is partly a result of the government’s ‘localism’ agenda.
Local government funding has been based on two principal ways of distributing money: a general support for councils that is based on a (usually flawed) formula; and multiple streams of ‘ring-fenced’ funding, which is often – indeed probably mostly – aimed at correcting problems with the general formula funding.
Scrapping most of these individual streams of funding and rolling them up into the formula funding stream has the perverse consequence of exaggerating the problems with the general formula. Hence the weird sight of a so-called ‘progressive’ and ‘localist’ system delivering the biggest cuts to places like Liverpool.
Ministers have been making themselves look faintly ridiculous by emphasising that sharing chief executives and paper-clip purchasing can wholly mitigate the effect of cutting more than a quarter of council funding over the next four years. It’s enough to make snake-oil salesmen blush.
Yes, councils can make some operational efficiencies, but they will come nowhere near meeting this level of rolling back of the local state. Some more radical efficiencies may help more, but they take much longer to achieve and, crucially, usually require at least some upfront investment to make them work. Not much chance of that happening in many cases. Some services may be radically restructured to produce serious savings over time – but they are likely to be the services that are left after others have been cut.
Let’s be absolutely clear – this settlement means the permanent closure of some council services and the permanent shrinking of others. Which will vary from council to council, but cuts to services there will be and no amount of bluster from ministers can hide that.
Again, rather ironically, it looks like the Localism Bill will make this easier for councils, as it removes many specific statutory duties. This will mean councils have a wider choice of what to cut than if they were constrained by specific duties embodied in legislation. ‘Post code lotteries’ will look positively egalitarian by the time this works its way through the system.
Bruce Springsteen sings in one of his laments for industrial America ‘those jobs are gone boy, and they ain’t coming back’. These local jobs and services are gone boy, and they ain’t coming back either.
Colin Talbot is professor of public policy and management at the University of Manchester Business School. This post first appeared on Whitehall Watch
