These councils are just the tip of the iceberg: dozens of councils around England are in a state of collapse or near-collapse. Council funding from central government was cut by 50 per cent over the last decade – and as a result councils receive about £16bn per year less than in 2010.
My hometown of Croydon is the poster child for council collapse. A 10 per cent council tax hike? Pah! We’ve had 15 per cent. Cuts to services? Been there, done that. A Section 114 notice? One? Hah! We’ve had three (and a fourth may be imminent)!
While there has been incompetence and mismanagement – under both Labour and Conservative administrations – that is not the real story. Even the best and most competent managers can’t make ends meet if the demand for services outstrips the resources allocated.
Council tax in Croydon rose by 15 per cent in 2023/24 – the same year in which the adult social care budget was hacked back by £12m. In the last year, the Tory mayor closed four libraries (one in the poorest ward in the borough), and is now proposing more cuts to youth services.
After years of pain – leaving Croydon residents paying the highest council tax in London with only threadbare services to show for it – the council finances are still getting worse. A similar story is emerging in Birmingham where council tax is rising by 7.5 per cent this year after it went up by 10 per cent last year, and another round of cuts to services and sell-offs of public assets is planned. Pay more, get less.
Pleas for more funding fell on deaf ears. In 2022, the Conservative council leaders of Kent and Hampshire wrote to the then Conservative government to say: “We have experienced more than 12 years of national austerity and cuts to our core budgets. Inflation continues to grow, along with demand for services such as social care for vulnerable adults and children”. This year, Hampshire asked the Government for permission to hike council tax by 15 per cent.
To give the new Labour Government some credit, they are increasing overall council funding by 6.8 per cent this year. But that comes after years of real terms cuts and rising demand from an ageing population (impacting social care), an unregulated housing market (emergency accommodation), and from increasing poverty (social services).
Yet again our government is short-changing the North
Read MoreWithout their own capacity, councils will continue to rely on often rogue private landlords and B&Bs. To make matters worse, Chancellor Rachel Reeves announced in her Budget that local housing allowance would be frozen – meaning more housing will become unaffordable to tenants, resulting in more people presenting to councils in need of emergency accommodation.
As Local Government Association chair Louise Gittins said, council finances remain “extremely challenging” and the Government’s extra money “still falls short of what is desperately needed”. The crisis in council finances is far from over. At best it may be getting worse at a slower rate – and that’s not much of a winning slogan for Labour.
Andrew Fisher is a former executive director of policy for the Labour Party
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